Drakopoulos v. U.S. Bank National Ass'n

Summary

The Massachusetts Supreme Judicial Court held that U.S. Bank, as assignee of a potentially high-cost mortgage loan, was not shielded from liability as a matter of law for claims arising from the loan's origination. The court concluded that disputed material facts precluded summary judgment on claims under the Predatory Home Loan Practices Act, G. L. c. 183C, G. L. c. 93A, the Borrower's Interest Act, and unconscionability. Summary judgment for the loan servicer was affirmed, while judgment for U.S. Bank was vacated and the matter remanded.

Holdings

1. An assignee of a high-cost home mortgage loan may be subject to all affirmative claims and defenses that the borrower could assert against the original lender, including claims under G. L. c. 93A and the Borrower's Interest Act and the defense of unconscionability. U.S. Bank did not establish as a matter of law that it was protected from such liability.
2. Summary judgment for the servicer was properly affirmed because the record did not show that the servicer was an assignee or establish another basis for its liability.
3. Summary judgment for the bank was improper because a genuine dispute existed over whether the loan's points and fees exceeded the statutory threshold.
4. A fixed-rate mortgage is not categorically outside the scope of predatory-loan liability under G. L. c. 93A. The relevant question is whether the lender should have recognized at origination that the borrowers were unlikely to repay the loan, and disputed facts required trial rather than summary judgment.
5. Summary judgment on unconscionability was improper because the record contained material factual disputes concerning oppression, unfair surprise, bargaining disparity, the borrowers' circumstances, and the unaffordability of the loan.
6. Summary judgment for the bank was improper because the record presented a triable issue whether refinancing a home loan obtained approximately nine months earlier, with payments exceeding the borrowers' total income, was in the borrowers' interest.
7. The court declined to decide the jury-trial issue because no Superior Court judge had yet ruled on it and appellate review was premature.

Questions Presented

1. Whether U.S. Bank, as assignee of the mortgage loan, was shielded as a matter of law from liability for claims arising from the loan's allegedly predatory origination.
2. Whether disputed facts existed as to whether the loan was a high-cost home mortgage loan under the Predatory Home Loan Practices Act.
3. Whether disputed facts existed as to whether the lender's origination of the loan violated G. L. c. 93A.
4. Whether disputed facts existed as to whether the mortgage transaction was unconscionable.
5. Whether disputed facts existed as to whether the refinancing violated the Borrower's Interest Act.
6. Whether the plaintiffs were entitled to a jury trial on the surviving claims at that stage of the proceedings.

Disposition

reversed_and_remanded