[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
MAY 26, 2006
No. 05-14678 THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 04-02317-CV-2-IPJ
DENNIS HARDY,
HENRIETTA HARDY,
Plaintiffs-Appellants,
versus
REGIONS MORTGAGE, INC.,
Defendant,
CENDANT CORPORATION,
REGIONS BANK,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_________________________
(May 26, 2006)
Before HULL and WILSON, Circuit Judges, and GOLDBERG *, Judge.
HULL, Circuit Judge:
Dennis and Henrietta Hardy (the “Hardys”) appeal the judgment entered
against their complaint. The district court granted a judgment on the pleadings on
the ground that no private right of action exists under § 10 of the Real Estate
Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2609. The Hardys do not
dispute that, after obtaining their mortgage, they enrolled in a retail shopping
discount program and authorized defendant Regions Mortgage, Inc. (“Regions”) to
add five dollars to their mortgage payment each month as payment for the
program. Instead, the dispute here involves the Hardys’ allegation that Regions
violated RESPA and its corresponding regulations by failing to list their monthly
five-dollar payment on their escrow account statement. See 24 C.F.R.
§ 3500.17(o). Because the Hardys’ complaint involves a violation of RESPA § 10,
for which no private right of action exists, we affirm.
I. BACKGROUND
In 1996, the Hardys refinanced their home with Regions. Later that year, the
Hardys received information from Cendant Corporation about “Shoppers
Advantage,” a program that provided discounts at participating retailers to
*
Honorable Richard W. Goldberg, Judge, United States Court of International Trade,
sitting by designation.
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members of the program. Mrs. Hardy consented to have five dollars a month
added to the Hardys’ mortgage payment to enroll in the program. Over the next
seven years, the Hardys forgot about their membership in “Shoppers Advantage.”
In 2003, the Hardys discovered that a five dollar monthly fee had been paid out of
their escrow account but was not listed on their mortgage statements. The Hardys
filed suit. They alleged that Regions had violated § 3500.17(o) of regulations
under RESPA and that Regions had conspired with Cendant to violate RESPA.
The Hardys also requested certification of a class action.
On a motion for judgment on the pleadings, the district court found that thte
Hardys failed to allege a violation of RESPA § 6, for which Congress created a
private right of action, but had instead alleged a violation of RESPA § 10, for
which no private right of action exists. The district court entered a judgment on the
pleadings against the Hardys.
II. STANDARD OF REVIEW
We review de novo the grant of judgment on the pleadings by the district
court. Moore v. Liberty Nat’l Life Ins. Co., 267 F.3d 1209, 1213 (11th Cir. 2001).
In reviewing a judgment on the pleadings, “[w]e must accept all facts in the
complaint as true and view them in the light most favorable to the plaintiffs.” Id.
(quotation marks omitted).
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III. DISCUSSION
The Hardys argue that the district court erred by entering judgment against
their complaint, in which they alleged that Regions violated § 3500.17(o) of the
regulations implementing RESPA and conspired with Cendant to violate
§ 3500.17(o). The Hardys contend that § 3500.17(o) was promulgated under
RESPA § 6. Because § 6 provides an express private right of action, the Hardys
conclude that a private right of action exists for the alleged failure by Regions to
disclose the monthly five-dollar payments on their escrow account statements. We
disagree.
RESPA is a consumer protection statute that regulates the real estate
settlement process. See 12 U.S.C. § 2601(a). Sections 6 and 10 of RESPA
regulate two different aspects of mortgage lending. The Hardys’ complaint
involves a violation of § 10, not § 6.
RESPA § 6 provides that “[e]ach person who makes a federally related
mortgage loan” must disclose to loan applicants that “the loan may be assigned,
sold, or transferred” while the loan is outstanding. 12 U.S.C. § 2605(a). Because a
lender who “fails to comply with any provision of [§ 6] shall be liable to the
borrower,” § 6 provides an express private right of action. Id. § 2605(f)(1). The
Hardys did not allege that Regions either transferred or failed to disclose a transfer
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of their mortgage loan.
RESPA § 10 states that lenders must provide annual escrow account
statements that clearly itemize “the amount of the borrower’s current monthly
payment . . . the total amount paid out of the escrow account during the period for
taxes, insurance premiums, and other charges . . . , and the balance in the escrow
account at the conclusion of the period.” Id. § 2609(c)(2)(A). Under § 10, no
private right of action exists because “the Secretary shall assess to the lender or
escrow servicer failing to submit the statement a civil penalty.” Id. § 2609(d)(1).
The Hardys’ complaint alleges facts that involve a violation of § 10.
The Secretary promulgated additional regulations for escrow account
statements. See 24 C.F.R. § 3500.17. Under § 3500.17(o) of the regulations,
“[a]ny borrower’s discretionary payment . . . made as part of a monthly mortgage
payment is to be noted on the initial and annual statements.” Id. § 3500.17(o). A
failure to comply with the requirements under § 3500.17 “shall constitute a
violation of section 10(d) of RESPA.” Id. § 3500.17(m)(1). Section 3500.17 of
the regulations also states that “the Secretary shall assess a civil penalty” for
violations. Id. The parties do not dispute that the five-dollar monthly payment is a
“discretionary payment” within the meaning of the regulations and that the Hardys
joined the “Shoppers Advantage” program and agreed to that “discretionary
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payment” being added to their monthly mortgage payment.
The Hardys argue that Regions’ failure to note the five-dollar monthly
payment on the escrow account statements, and, thus, its failure to comply with
regulation § 3500.17(o) is a violation of RESPA § 6. We disagree. First, the
regulations explicitly state that failure to comply with § 3500.17 is a violation of
RESPA § 10, not a violation of RESPA § 6. 24 C.F.R. § 3500.17(m)(1).
Regulation § 3500.17 and RESPA § 10 both detail the items that a lender must
disclose in an escrow account statement. See, e.g., id. § 3500.17(a), (g)-(j), (o); 12
U.S.C. § 2609(c)(1)(A), (c)(2)(A). Section 6, on the other hand, does not address
the requirements of escrow account statements. See generally 12 U.S.C. § 2605.1
No private right of action exists for the harm alleged by the Hardys. Failure
to comply with regulation § 3500.17(o) is a violation of RESPA § 10, and RESPA
explicitly states that the Secretary of Housing and Urban Development enforces
1
We note that RESPA § 6 does contain a subsection addressing escrow accounts and the
timing of payments from escrow accounts. See 12 U.S.C. § 2605(g). The Hardys argue that the
Secretary’s assertion that 24 C.F.R. § 3500.17 “establishes escrow accounting procedures under
Sections 6(g) and 10” of RESPA demonstrates that § 3500.17(o) was enacted pursuant to
RESPA § 6. See 59 Fed. Reg. 53890, 53890 (Oct. 26, 1994). This argument is misplaced.
Section 3500.17 addresses a range of regulatory concerns, most of which fall under RESPA §10,
but one of which falls under RESPA § 6(g). Notably, § 3500.17(k) addresses the timing of
escrow account payments as set out in RESPA § 6(g). By contrast, § 3500.17(o) regulates the
disclosure of discretionary payments in escrow account statements, a matter detailed in RESPA
§ 10(c)(2). Congress unambiguously designated authority to the Secretary to enact disclosure
regulations under RESPA § 10, not § 6(g). Therefore, the Secretary’s authority to promulgate
§ 3500.17(o) necessarily must come from RESPA § 10.
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violations of § 10. 12 U.S.C. § 2609(d)(1). The regulations also provide that “the
Secretary shall assess” the penalties. 24 C.F.R. § 3500.17(m)(1). “The express
provision of one method of enforcing a substantive rule suggests that Congress
intended to preclude others.” Alexander v. Sandoval, 532 U.S. 275, 290, 121 S.
Ct. 1511, 1521-22 (2001); see also Collins v. FMHA-USDA, 105 F.3d 1366,
1367-68 (11th Cir. 1997) (finding no “implied private civil remedy” under 12
U.S.C. § 2604(c) because, among other reasons, other provisions of RESPA
explicitly provided for private civil remedies but § 2604(c) did not, and stating
“[t]hat . . . indicates Congress did not intend such a remedy for § 2604(c)
violations.”).
The Hardys also allege that Regions and Cendant conspired to violate
§ 3500.17(o) of the regulations. Because no private right of action exists for the
substantive claim that the Hardys allege, their conspiracy claim also necessarily
fails.
IV. CONCLUSION
For the above reasons, we affirm the district court’s grant of judgment on the
pleadings against the Hardys.
AFFIRMED.
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