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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-15755
________________________
D.C. Docket No. 1:11-cv-00412-WS-C
MAX LEROY REED, JR.,
ELIZABETH REED,
individually and on behalf of all similarly
situated individuals,
Plaintiffs - Appellants,
versus
CHASE HOME FINANCE, LLC,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
________________________
(July 29, 2013)
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Before MARTIN and FAY, Circuit Judges, and GOLDBERG, * Judge.
PER CURIAM:
Max Elroy Reed and Elizabeth Reed (the Reeds) sued Chase Home Finance
(Chase), claiming that Chase did not comply with the disclosure requirements in
the Truth in Lending Act (TILA), 15 U.S.C. § 1641(g),1 when Chase did not
inform them that it had been assigned an interest in their mortgage. The district
court granted summary judgment in favor of Chase. The district court ruled that as
servicer of the loan, Chase fell into the “safe harbor” exception of 15 U.S.C. §
1641(f), which provides that a servicer is exempt from the § 1641(g) disclosure
requirements when the assignment is “solely for the administrative convenience of
the servicer in servicing the obligation.” 15 U.S.C. § 1641(f)(2). The Reeds
appeal. Having had the benefit of oral argument, and after careful consideration,
we affirm.
I.
In November 2006, the Reeds refinanced their mortgage. They signed a
promissory note to Pensacola Guarantee Mortgage (Pensacola), and the mortgage
named Pensacola as the lender. The mortgage named Mortgage Electronic
*
Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting by
designation.
1
Section 1641(g) provides in relevant part: “[N]ot later than 30 days after the date on which a
mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the
new owner or assignee of the debt shall notify the borrower in writing of such transfer.” 15
U.S.C. § 1641(g)(1).
2
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Registration Systems, Inc. (MERS) as the nominee for the lender, and the lender’s
successors and assigns. The mortgage also identified MERS as the mortgagee.
Shortly after closing, Pensacola transferred ownership of the promissory
note to SunTrust Mortgage (SunTrust). SunTrust in turn transferred ownership of
the note to Fannie Mae in early 2007. Also shortly after closing, Pensacola
transferred servicing responsibilities for the loan to SunTrust. SunTrust then
transferred servicing of the loan to Chase in September 2007.
As servicer of the loan, Chase gave the Reeds notice of intent to foreclose
after the Reeds missed several mortgage payments. On September 3, 2010, Chase
announced it would foreclose. Four days later, MERS executed an “assignment of
Mortgage” (the Assignment), transferring to Chase “all right, title and interest of
[MERS] in and to that certain Mortgage executed by [the Reeds].”
II.
The Reeds contend that the Assignment made Chase the new owner of the
debt, and triggered Chase’s obligation under § 1641(g) to inform them that it was
the new owner of the debt. In response, Chase argues that MERS assigned its
interest in the mortgage so that Chase could service the loan, because Chase could
not have foreclosed—“a core servicing duty”—without assignment of the
mortgage. Chase claims the assignment “was solely for the administrative
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convenience of the servicer” within the meaning of § 1641(f), so it was not
required to inform the Reeds of the assignment.
We review the district court’s grant of summary judgment de novo. Whatley
v. CNA Ins. Cos., 189 F.3d 1310, 1313 (11th Cir. 1999). With that in mind, and
even if we assume—without deciding—that Chase would otherwise be subject to
the § 1641(g) disclosure requirements as the new owner of the debt, we conclude
that Chase was exempt from § 1641(g)’s disclosure requirement because the
assignment was made “solely for the administrative convenience of the servicer in
servicing the obligation.” See § 1641(f)(2).
In deciding whether the Assignment was an “administrative convenience”
under § 1641(f), we must first consider the meaning of the term. Because TILA
does not define “administrative convenience,” we look to the ordinary meaning of
the words. United States v. Silvestri, 409 F.3d 1311, 1333 (11th Cir. 2005)
(“Courts must assume that Congress intended the ordinary meaning of the words it
used.” (quotation marks omitted)). To determine the ordinary meaning of a term,
“courts often turn to dictionary definitions for guidance.” Id. (quotation marks
omitted). The word “convenience” is defined by Merriam-Webster as “fitness or
suitability for performing an action or fulfilling a requirement.” Merriam-Webster
Online Dictionary, http://www.merriam-webster.com/dictionary (last visited July
23, 2013). The word “administrative” connotes the act or process of managing or
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supervising. Id. Thus, the ordinary meaning of “administrative convenience” is
that which allows performance of a managerial action or requirement.
It is not disputed in the record before us that the purpose of the Assignment
was to allow Chase to foreclose on the Reeds’ property. It is also undisputed that
Chase could not have foreclosed on the property without the Assignment. Thus,
we conclude that the Assignment was an “administrative convenience” within the
meaning of § 1641(f) because the Assignment allowed Chase to perform
foreclosure, a requirement of servicing the loan. For these reasons, Chase was not
subject to § 1641(g)’s disclosure requirements. 2
III.
The district court’s grant of summary judgment is AFFIRMED.
2
The Reeds argue that if we consider anyone who provides, in some part, an administrative
convenience to fall within the § 1641(f) exception, then the disclosure requirement will be
toothless. However, the Reeds have conceded that the purpose of the Assignment was to allow
Chase to foreclose and Chase has explained that servicing of loans can require foreclosing. This
being the case, the Assignment constituted an “administrative convenience” within the meaning
of § 1641(f).
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