ILLINOIS COURT DISMISSES | Key Points

1. The Northern District of Illinois recently dismissed an action filed by mortgagor Jason Roberts (“Roberts”) against his servicer (“Carrington”) for alleged violations of state law and the Fair Debt Collections Practices Act (“FDCPA”). Roberts v. Carrington Mortgage Services, LLC, 19-CV-2355, 2020 WL 6565247 (N.D. Ill. Nov. 9, 2020). Roberts alleged that Carrington was prohibited from charging multiple property inspection fees under HUD because Carrington knew Roberts occupied the property.

2. The Court found Carrington properly conducted and charged Roberts for the property inspections based on the plain language of the mortgage which expressly permitted the servicer to “‘do or pay whatever is necessary to protect the value of the Property and [the mortgagor’s] rights in the Property.’” This included property inspections upon default. The Court rejected Roberts’ position that references within the mortgage to HUD (or “the Secretary”) trumped the parties’ contract terms and limited what could be charged to Roberts.

3. The Court dismissed Roberts’ complaint without prejudice noting Roberts could move to amend if he could allege Carrington passed on expenses that it did not actually incur. If such an allegation could be proven, the expenses would no longer be considered “necessary” and passing them on to Roberts could ostensibly provide the basis for a breach of contract claim.