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Real Estate – Foreclosure – TILA – Title Exam Fee

Although a borrower says she has an expert witness to back her claim that she was charged an unreasonable fee for a title examination, a magistrate judge in the Richmond U.S. District Court dismisses the borrower’s claim under the Truth in Lending Act, with leave to amend.

Defendant bank argues plaintiff’s TILA claim is based on a single conclusory allegation that the amount she was charged for a title examination exceeded the reasonable charge for a title examination by more than $35. Plaintiff argues she has provided notice of an expert witness, whom she expects will testify that the going local rate was approximately $100, approximately $150 less than the $250 charge imposed on her by Saxon Mortgage in this loan.

Plaintiff must allege facts sufficient to make plausible the belief that the title examination fee was not reasonable or bona fide. Although there is a scarcity of cases construing this particular provision, courts construing § 226.4(c)(7) have typically given the terms their plain meaning and looked to whether the services billed were rendered in good faith, whether the fees indirectly augmented the creditor’s yield or were comparable to the prevailing practices of the industry in the locality.

In Hudson v. BOA [VLW 010-3-310], the plaintiff attempted to allege a TILA violation based on a title insurance fee charged that was over $300 more than the prevailing local market rate. The court held plaintiff failed to plead sufficient facts to support his claim. This court cannot distinguish this plaintiff’s complaint from the Hudson complaint and must dismiss it for failure to adequately and sufficiently state a claim.

The court finds plaintiff’s allegations regarding the unreasonableness of the title examination fee to be naked assertions of wrongdoing without some further factual enhancement within the complaint to cross the line between possibility and plausibility of entitlement to relief. Although the bank argues two other grounds for dismissal, the court need not reach those arguments because the first ground provides an appropriate avenue for dismissal.

The court dismisses the complaint with leave to amend.

King v. Deutsche Bank Nat’l Trust Co.
(Lauck, J.) No. 3:10cv41, Sept. 21, 2010; USDC at Richmond, Va. VLW 010-3-482, 14 pp.

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