Court Throws Out Fraud Suit but Keeps Tax-Escrow Claims Alive
An Illinois federal court dismissed borrowers' fraud allegations against a loan servicer while allowing claims under RESPA and unjust enrichment to move forward over alleged escrow overcharges.
Borrowers argued that a loan servicing firm inflated their escrow accounts with property-tax amounts they did not owe, ignored more than 100 attempts to correct the mistake, and refused a reduced payment. The court found the fraud claims insufficient because the plaintiffs could not point to specific false statements. However, the judge allowed the RESPA and unjust enrichment claims to proceed, finding the borrowers' allegations plausible.
Why it matters
It shows courts may enforce escrow transparency even when fraud accusations lack specific evidence.
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