In a noteworthy ruling this month, a federal judge in Maryland has approved a motion for class certification in a suit that was filed by several homeowners against their lender, MBA Mortgage Services. The homeowners allege that they were overcharged for title and settlement services as part of a clandestine kickback arrangement between MBA Mortgage Services and All Star Title. Notably, All Star Title, despite its pivotal role in the lawsuit, has not been named as a party.
According to court documents, fourteen plaintiffs, led by one Matthew S. Remsnyder, closed on residential mortgage loans between 2009 and 2015 with MBA as the lender and All Star as the provider of settlement services. The suit posits that All Star Title excessively invoiced MBA’s borrowers and used a significant portion of the resulting funds to covertly cover MBA’s marketing expenses through payments to third-party marketing companies.
The case took an interesting turn when MBA Mortgage Services attempted to draw on an earlier ruling in a case involving hotel chain Marriott. The ‘Marriott’ ruling, which had earlier been cited as precedent, was overturned by the U.S. Court of Appeals for the Fourth Circuit in August, undermining MBA’s defense. Accordingly, the judge declared that the “predominance analysis on which MBA relies is no longer good law”. The ramifications of this decision are yet to be fully appreciated as the case progresses, but one thing is certain – legal professionals should monitor these developments closely as they have the potential to impact the handling of similar cases in the future.