excess of 8% and is secured by residential real estate. 815 ILCS 205/4.1a. The IIA specifically
excludes charges for “hazard, mortgage or life insurance premiums, survey, credit report, title
insurance, abstract and attorneys’ fees, recording charges, escrow and appraisal fees, and similar
charges” from the 3% cap on charges. 815 ILCS 205/4.1a(a). Excluding these categories, Mann

paid the following charges on the loan in question:

Payee Description

Equicredit Processing Fee $270.00
Equicredit Underwriting Fee $135.00
Fidelity National Flood Determination Fee $11.00
Inventive Mortgage Corp Broker Fee Financed $2,112.50
First American Courier Fees $40.00
First American Settlement or Closing Fee $235.50

$2,804.00

Mann’s loan amount was $140,250. The 3% cap on fees imposed by the IIA for this loan would
be $4207.50. The charges Mann paid on this loan clearly did not exceed the cap imposed by the
IIA. Mann argues that all mortgage broker fees, including YSPs, are considered charges for
purposes of the IIA and thus that the $2805.00 YSP paid to Inventive must be added to the
charges listed above, resulting in a total charge to Mann far in excess of that permitted under the
JIA. This reasoning ignores the plain language of the ITA, which limits “a charge in addition to
the stated rate of interest payable directly or indirectly by the borrower and imposed directly or
indirectly by the lender.” 815 ILCS 205/4.1a (emphasis added). Although a YSP could
reasonably be found to be a charge payable indirectly by the borrower by way of a higher
interest rate, it is not a charge in addition to the stated rate of interest. The same line of
reasoning that would permit the YSP to be considered an indirect payment through a higher
interest rate presupposes that the YSP is part of the interest rate and not a charge in addition to it.
Accordingly, the court finds that EquiCredit did not violate the IIA and grants BNY’s motion for

summary judgment as to Mann’s second counterclaim.

13



financial transaction that was taking place.” (Mann Dep. part 1, p. 42.)3 The details from the

HUD-1 statement are as follows:

Settlement Charges (line 1400)

Appraisal- DHM Appraisal
Credit Report- Transunion
Broker Fee- Inventive Mortgage

Originator fees
Processing Fee- EquiCredit
Underwriting Fee- EquiCredit

Flood Ins. Determination - Fidelity

Attached Addendum (lines 812 A,
B,C)

Tax Service Fee- Transamerica
Courier Fee- Airborne

YSP to Inventive from EquiCredit
POC 2805

Settlement- 1st American Title
Title Ins - Citywide Title

Recording Fees
Mortgage
Release

Overnight delivery fees- First
Amer.
Total Settlement Charges

Payoff Fleet Mortgage (line 104)
Gross amount due from borrower (Line 120)

$275.00
$3.53
$2,112.50

$270.00

$135.00

$405.00
$11.00

$53.00
$24.50

$0.00

$77.50

$235.50
$335.50

$47.00
$23.50
$70.50

$40.00

$3,566.03

Total Paid for Borrower/ Principal amount of new loan (Line 220)

Cash to Borrower (Line 303)
(Ex, F.)

$119,070.3
5

$122,636.38

$140,250.00
$17,613.62

> Mann’s deposition was taken over two days. Each day’s testimony begins on page | of the respective transcripts.
The court will identify the testimony of the first day as part 1 and the testimony of the second day as part 2.


York state chartered financial services company and a corporation incorporated in the state of
New York with a principal place of business in New York City. (Mancuso Aff. {ff 6,7.) The
matter in controversy exceeds $75,000.00. (Ex. A JJ 1-2; Ex. B §§[ 1-2.) As a New York
corporation with a principal place of business in New York, BNY is diverse from Illinois citizen
Mann. Even if BNY were a national bank with branches in Illinois, it would be diverse from an
Illinois citizen unless Illinois were listed on its organizational certificate or it maintained its
principal place of business in Illinois, neither of which has been shown to be the case here. See
Firstar Bank, N.A. v. Faul, 253 F.3d 982, 994 (7th Cir. 2001)(“[A] national bank is ‘located’ in,
and thus a citizen of, the state of its principal place of business and the state listed in its
organizational certificate.”). Consequently, the location of BNY’s branches has no bearing on
the issue of diversity. Mann has submitted no evidence to contradict BNY’s assertion of
diversity. Thus, this court has proper subject matter jurisdiction over this controversy.

Turing to the merits, Mann’s affirmative defense and first counterclaim allege that
EquiCredit, as the loan originator, violated TILA by understating the actual finance charge on
Mann’s loan in the corrected TILA disclosure Faas sent to Mann and, therefore, Mann is entitled
to rescind the loan as provided for in TILA. TILA permits a borrower to rescind after the
initiation of a judicial foreclosure on the principal dwelling of the borrower, which secures the
loan, if the finance charge disclosed is more than $35.00 less than the actual finance charge
required to be disclosed under TILA.” 15 U.S.C. § 1635(a) & (i)(2). TILA generally defines a
finance charge as “the sum of all charges, payable directly or indirectly by the person to whom
the credit is extended, and imposed directly or indirectly by the creditor as an incident to the

extension of credit. The finance charge does not include charges of a type payable in a

715 U.S.C. § 1635(f) limits a borrower’s right to rescind to three years from the date of the consummation of the
joan transaction. This action was initiated within that time limitation.


was only $40 and consisted of $25 for sending the loan documents to Equicredit and $15 for

sending the prior loan payoff to Fleet. (Id. {{[ 36-37.) EquiCredit required First American to

mail overnight the loan documents but did not require First American to mail overnight the

payoff of the previous loan to Fleet; First American made the decision to mail overnight the

payoff based on its own policy and Fleet’s suggestion. (/d. {{[ 38-39.)*

The original TILA disclosure states that the amount financed is $137,358.50. (Ex. H.)

This amount equals the prepaid finance charge of $2891.50 subtracted from the note amount of

$140,250.00. Prior to the loan closing, EquiCredit provided First American with the following

estimate of disbursements and payments:

Hold From
Proceeds

Paid Receipt (POC)

Wire Funds

Disbursement Paid To

Description of Disbursement

EquiCredit
EquiCredit
Transunion
Transamerica
Airborne
Fidelity National

Inventive Mortgage

Mary Clara Mann
inventive Mortgage Corp
Fleet

1st Installment 00 taxes

Processing Fee
Underwriting Fee

Credit Report Fee

Tax Service Fee

Courier Fee

Flood Determination Fee

Yield Spread Premium

Proceeds to Borrower
Broker Fee Financed
Creditor
Creditor

First American/ Courier Fee Creditor

Release Fee/ First
American

Clerk of County Court
First American

DHM Appraisal

First American

Creditor

Recording Fees-Mortgage
Title Insurance

Appraisal Fee

Settlement or Closing Fee

$270.00
$135.00
$3.53
$53.00
$24.50

$11.00

$497.03

$2,805.00

$16,966.13
$2,112.50
$119,070.35
$620.99
$50.00

$40.00
$47.00
$335.50
$275.00
$235.50
$139,752.97

5 Mann asserts in her Local Rule 56.1 statement that BNY has not produced any communication from Fleet
corroborating Bragg’s testimony. This assertion is incorrect. Exhibit J contains documents Bragg submitted during
her deposition, which include Payoff Remittance Instructions from Fleet stating, “When sending payoff funds, we
suggest sending via overnight mail in order to avoid additional interest charges.” Additionally, Mann attempts to
exclude any such document as impermissible hearsay. Once again, documents kept in the normal course of
business, such as the payoff instructions from Fleet, are exceptions to the hearsay rule under FRE 803(6).


Mann also received an original and a “corrected” TILA disclosure.’ (Pl. L.R. 56.1 14.)
Jennifer Faas (“Faas”), a post-loan closing processor at EquiCredit, prepared the corrected
disclosure and sent it to Mann after the closing. (Id. { 43.) The original TILA disclosure listed
Mann’s total finance charge as $309,464.86 and the corrected TILA disclosure listed the total
finance charge as $309,414.86, fifty dollars less. (Id. J] 15-16, 42.) Both TILA disclosures list
a payment schedule of 359 payments of $1241.17 and one payment of $1243.33, totaling
$446,823.36. (Ex. H, 1.) When the loan principal amount of $140,250.00 is deducted from the
total payments, the remaining $306,573.36 equals the interest amortized over the anticipated life
of the loan. When the $306,573.36 interest figure is deducted from the total finance charge of
$309,464.86, as listed in the original TILA disclosure, the remaining $2891.50 equals a prepaid
finance charge. The prepaid finance charge included in the original TILA consists of the

following individual charges:

Broker Fee to Inventive Mortgage $2112.50
Processing and Underwriting Fees to EquiCredit $405.00
Flood Certification Fee to Fidelity $11.00
Settlement/ Closing Fee to First America $235.50
Tax Service Fee to Transamerica and courier $77.50
Courier Fees to First America $50.00

Total $2891.50

(PL LR. 56.1 J 47, 51; Def. Memo. p.3.) The $50 difference in the two TILA disclosures
resulted from Faas’ excluding from the corrected disclosure the courier charge paid to First
American. (PI. L.R. 56.1946.) This $50 charge was an estimate of courier fees to mail
overnight the loan package to EquiCredit and to mail overnight the payoff of the prior mortgage

to Fleet Mortgage (“Fleet”). (Id. | 35.) First American’s actual charge for the two courier fees

* In Mann’s response to BNY’s Local Rule 56.1 statement of material facts she objects to the use of the term
“corrected” to describe the revised TILA disclosure she received on the basis that the description is argumentative.
Because the parties have consistently referred to the revised TILA disclosure as the “corrected” disclosure and
because Mann originally applied this label herself in her Rule 26(a)(1) disclosure, the court will continue to use this
label to maintain clarity; however, the court does not use the label to automatically imply that the revised TILA.
disclosure was more accurate than the original.


is added together, the sum equals the additional $26.50 payment to Mann in excess of the
estimate, computed above.

Inventive Mortgage (“Inventive”), Mann’s mortgage broker, received a total fee of
$4917.50. (Ex. J, Check #010966.) This fee consisted of $2112.50 paid out of Mann’s loan
proceeds from EquiCredit and $2805.00 paid directly by EquiCredit and outside of closing as a
Yield Spread Premium (“YSP”). (Ex. D, sub-Ex. 12.)

Mann did not question any of the expenses detailed on the HUD-1 statement she was
given at the closing and, apart from a discussion she had weeks prior to the loan closing with
Darnell Calhoun, her broker at Inventive, Mann never discussed canceling or rescinding her loan
from EquiCredit. (Mann Dep. part 1, pp. 61,64.) She commenced repayment of the Joan and
continued until August of 2002 when she made her last payment, (Pl. LR. 56.1 4 13.)
EquiCredit later assigned Mann’s mortgage to BNY. (id. 57.) On December 20, 2002, BNY
filed a Complaint against Mann seeking foreclosure.

DISCUSSION

Before addressing BNY’s motion for summary judgment on Mann’s counterclaims, the
court pauses to address Mann’s statements regarding this court’s jurisdiction over this action. In
her response to paragraph six of BNY’s Local Rule 56.1 statement, Mann states that BNY is a
chartered bank and has indicated neither where it maintains branches, nor where the situs of the
instant trust is located, and has therefore not shown that diversity of citizenship exists. Mann
goes on to state that she will seek dismissal of this action for lack of subject matter jurisdiction
based on diversity at a later date.

In its Complaint, BNY asserts jurisdiction on the basis of diversity of citizenship

pursuant to 28 U.S.C. § 1332(a). Mann is an {Minois citizen. (Pl. L.R. 56.1 J 2.) BNY is a New



Minute Order Form (

United States District Court, Northern District of Minois

ame of Assigned Judge Sitting Judge if Other
or Magistrate Judge Joan H. Lefkow than Assigned Judge
CASE NUMBER 02 C 9265 DATE 8/17/2004
CASE The Bank of New York vs. Mary Clara Mann
TITLE
{Un the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.)
DOCKET ENTRY:
qd) im Filed motion of [ use listing in “Motion” box above.]
(2) Q Brief in support of motion due
@) Oo Answer brief to motion due . Reply to answer brief due.
(4) aq Ruling/Hearing on set for at
(5) go Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on _ _setfor at :
(©) a Trial[set for/re-set for} on at
8) O [Bench/Jury trial] [Hearing] held/continued to at.
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) CO) Local Rule 41.1 OFRCP41(a)(1) [J FRCP41(a)(2).
qo) sol [Other docket entry) | Enter Memorandum Opinion and Order. For the reasons stated in the
Memorandum Opinion and Order, plaintiff Bank of New York’s motion for summary judgment [21-1]
is granted. Judgment is entered in favor of plaintiff Bank of New York and against defendant Mary Clara
Mann.
ai [For further detail see order attached to the original minute order.]
No notices required, advised in open court. T
5
No notices required, umber of nties
o { Notices maited by judge’s staff, UG 8 20
Notified counsel by tclephone. date docketed 04
Docketing to mail notices
oS | Mail AO 450 form. Hoc abe inate
Copy to judge/magistrate judge.
8/17/2006
courtroom 2355 Fa LA VY N02 fate med nie
MD deputy’s vgs uo
initials at
Date/time received ** 7
central Clerk's Office, trailing deputy initials



In her memorandum opposing summary judgment, Mann states that BNY has not offered
any evidence to prove that the $15.00 courier charge for sending the prior loan payoff to Fleet,
which composed the remainder of the $40.00 courier charge collected by First American, was
properly excluded from the corrected TILA disclosure. This is incorrect. Bragg testified in her
deposition that First American paid this charge and that the decision to use a courier was based
on First American’s policies and Fleet’s suggestion. Additionally, the record includes a copy of
a Federal Express airbill showing that First American sent a package to “Payoff, Fleet
Mortgage” on May 11, 2001.° (Ex. J.) Because this charge was imposed by a third-party agent,
was not required by EquiCredit, and EquiCredit did not retain the charge, the $15.00 courier
charge was properly excluded from the corrected TILA. See Cowen v. Bank United of Texas,
FSB, 70 F.3d 937, 943 (7th Cir. 1995) (citing 12 C.F.R. § 226.4). It is Mann who has not offered
any evidence to prove her argument on this point.

The second charge that Mann argues was improperly excluded from the corrected TILA
disclosure is the $2805.00 YSP that EquiCredit paid to Inventive. Mann cites McGee v. Kerr-
Hickman Chrysler Plymouth, Inc., 93 F.3d 380, 383 (7th Cir. 1996), in an attempt to support this
contention. However, McGee states that borrower-paid mortgage broker fees must be included
in a TILA disclosure. The record clearly demonstrates that Mann did not pay this fee;
EquiCredit paid it. As noted above, First American issued check # 010966 for $4917.50 to
Inventive. This amount was the sum of the $2112.50 broker fee that Mann paid from the loan
proceeds, which was included in the corrected TILA disclosure, and the $2805.00 YSP that
EquiCredit paid directly. The mortgage broker agreement Mann signed with Inventive further

supports this conclusion. It states that Mann was obligated to pay $2112.50 to Inventive and the

® The closing occurred on May 7, 2001, but Mann had to return on May 11, 2001 to execute more documents.
(Mann Dep. part ] p. 10.) All disbursements in the record are dated May 11, 2001.

il


comparable cash transaction.” 15 U.S.C. § 1605(a). Mann argues that three specific charges
fitting this description were excluded from the $309,414.86 in finance charges disclosed on the
corrected TILA disclosure: (1) $35.00, composed of a courier fee and an unaccounted-for
charge; (2) a $2805.00 YSP; and (3) a $3.53 credit report charge. BNY argues that the corrected
TILA disclosure under-disclosed by only $25.00, an amount falling within the tolerance
permitted by TILA section 1635(i)(2), and that BNY is therefore entitled to summary judgment
on Mann’s affirmative defense and first counterclaim.

The parties agree that First American charged Mann a $25.00 courier fee to send the loan
documents to EquiCredit, that it did so upon EquiCredit’s instruction, that TILA therefore
required that the $25.00 fee be included in the finance charge and that the corrected TILA
disclosure did not include this amount. Mann attempts to add an additional $10.00, which she
refers to as an “unaccounted charge” to this undisclosed courier charge. Mann computes this
charge by comparing the $50.00 charge for courier services included in the original TILA
disclosure and absent from the corrected disclosure to the $40.00 actual charge for courier
services listed on the HUD-1 and confirmed in Bragg’s deposition testimony. While the former
charge certainly is $10.00 more than the actual charge, the $10.00 difference is not unaccounted-
for. As computed above through simple arithmetic, and by drawing the only reasonable
inference possible, the $10.00 difference between the estimated courier charge and the actual
courier charge was added to Mann’s loan proceeds and included in the $17,613.62 check
provided to her after completion of the closing, just as was the $16.50 difference between the
estimated prior mortgage release fee and the actual fee. Consequently, the only portion of the
$50.00 estimated courier fee that TILA required to be disclosed was the $25.00 charge required

by EquiCredit, upon which the parties agree.

10


Total Disbursed $140,250.00

Total Prepaid Finance Charge $2,891.50
Amount Financed $137,358.50

(Ex. J p. 24, Ex. K.) Actual disbursements varied from this estimate in three respects. First,
Mann was issued check #10964 for $17,613.62; second, First American retained a total fee of
$346.00; and third, no payment was withheld for the first installment of 2000 property taxes.°
(Ex. J, Escrow Ledger and check copies.)

By comparing the actual disbursements to the HUD-1 statement, the court can determine
the cause of these variances, The payment direct to Mann of $17,613.62 was $647.49 more than
the $16,966.13 estimated by EquiCredit. This was in part because Fleet paid the $620.99 year
2000 tax installment prior to closing and the amount estimated for this escrow payment was
therefore paid directly to Mann. (Ex. J. Inventive Fax.) Subtracting the $620.99 tax estimate
from the $647.49 difference between the actual and estimated payments direct to Mann leaves a
remaining amount of $26.50 paid to Mann but not directly accounted for. However, the source
of this $26.50 can be reasonably inferred from examining the funds retained by the closing
agent, First American. First American was entitled to its closing fee of $235.50, and to fees for
recording and courier services, which it provided. The estimated and actual mortgage recording
fee was $47.00. However, while the estimated fee for release of the prior mortgage was $40.00,
First American only paid and collected $23.50 for this service, $16.50 less than estimated. (Ex.
F.) Furthermore, as Bragg testified, the actual amount First American collected for courier fees,
$40.00, was $10.00 less than estimated by EquiCredit. (PI. L.R. 56.1 9 36-37.) When the

$16.50 overestimate related to recording fees and $10.00 overestimate related to courier charges

§ Although the $335.50 payment for title insurance was made directly to Citywide Title Company, rather than to
First American, the amount of the charge did not vary from the estimate prepared by EquiCredit.


affidavits, parts of the record, and other supporting materials relied upon ....” Mann has

neglected to cite to the record in support of a substantial number of her disagreements with

individual facts in BNY’s statement. Furthermore, many of record citations that Mann does

include neither support her denials nor provide grounds for disagreeing with BNY’s facts.

Accordingly, because Mann has not properly contested certain of BNY’s facts, the court must

accept those particular facts as true. See Jupiter Aluminum Corp. V. Home Ins. Co., 225 F.3d

868, 871 (7th Cir. 2000) (“An answer that does not deny

the allegations in the numbered

paragraph with citations to supporting evidence in the record constitutes an admission.”).

Specifically, the court treats Mann’s unsupported denials
paragraphs of Mann’s Local Rule 56.1 response to BNY’

37,38, 39, 46, 47, 51, 60.

as admissions in the following

s statement of material facts: 21, 35, 36,

On May 7, 2001, Mann entered into a home loan transaction with mortgage lender

EquiCredit. (Pl. L.R. 56.198.) Mann executed a mortgage on her home at 7715 S. Paxton Ave.

Chicago, IL 60649 and a note for $140, 250.00. (Jd. 119

-10.) First American Title Company

(“First American”) acted as the settlement agent for EquiCredit at Mann’s loan closing on May

7. (Id. [ 26.) First American branch manager Dawn Bragg (“Bragg”) was the loan closer for

Mann’s loan. (Jd. {{ 27, 30.) Bragg prepared a HUD-1 settlement statement for Mann’s closing,

which listed the various charges paid from the loan proceeds, and provided a copy to Mann at the

closing. (Id. (9 11, 21, 31. Mann testified that she recognized that the HUD-1 “detailed the

ee

2 Although Mann cites to Exhibit D, pp. 60-61 in support of her denial of BNY’s statement of material fact in
paragraph 21 of its Local Rule 56.1 statement, the cited testimony of Mann does not dispute the accuracy of the fact
BNY asserts in paragraph 21. Furthermore, Mann argues that the HUD-1 statement is hearsay that must be excluded
from consideration according to Federal Rule of Evidence 802. This assertion ignores the exception to the hearsay
rule found in FRE 803(6) that permits the admission into evidence of business records kept in the course of regularly
conducted business activities if it is the regular practice of that business activity to make the record, which

circumstance applies to the HUD-1 statement.



ORDER

For the reasons stated above, BNY’s motion for summary judgment is granted [#21].

ENTER: steno [heghe gp ben

JOAN HUMPHREY LEFKOW
Dated: August 17, 2004 United States District Judge

14


SUMMARY JUDGMENT STANDARDS

Summary judgment obviates the need for a trial where there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).
To determine whether any genuine fact exists, the court must pierce the pleadings and assess the
proof as presented in depositions, answers to interrogatories, admissions, and affidavits that are
part of the record. Fed R. Civ. P. 56(c) Advisory Committee's notes. The party seeking summary
judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In response, the
non-moving party cannot rest on bare pleadings alone but must use the evidentiary tools listed
above to designate specific material facts showing that there is a genuine issue for trial. Za. at
324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir.2000). A material fact must be
outcome determinative under the governing law. Insolia, 216 F.3d at 598-99. Although a bare
contention that an issue of fact exists is insufficient to create a factual dispute, Bellaver v.
Quanex Corp., 200 F.3d 485, 492 (7th Cir.2000), the court must construe all facts in a light most
favorable to the non-moving party as well as view all reasonable inferences in that party's favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

FACTS

The facts as set forth herein are taken from the parties' Local Rule 56.1 statements of
material facts and supporting materials. In many instances the facts are undisputed because
Mann has failed to respond to BNY’s statement of material facts in the manner dictated by Local
Rule 56,1. Local Rule 56.1 states that a party opposing summary judgment must file “a concise
response to the movant’s statement that shall contain a response to each numbered paragraph in

the moving party’s statement, including, in the case of disagreement, specific references to the


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
THE BANK OF NEW YORK, acting solely in)
its capacity of Trustee for EQCC Trust 2001-1F, )
Plaintiff, )
v. )
MARY CLARA MANN, )
Defendant, ) No. 02 C 9265
) Judge Joan H. Lefkow
MARY CLARA MANN, )
Counter-Plaintiff, )
v )
THE BANK OF NEW YORK, acting solely in)

its capacity of Trustee for EQCC Trust 2001-1F, ) HOCKETED
Counter-Defendant, ) AUG 4 ;
2004

MEMORANDUM OPINION AND ORDER

Plaintiff, The Bank of New York (“BNY”), filed a complaint on December 20, 2002
seeking to foreclose its mortgage on the property commonly known as 7715 S. Paxton Ave.
Chicago, IL 60649, which is owned by defendant, Mary Clara Mann (“Mann”). The Complaint
alleges that Mann is in default on the note secured by the mortgage. Mann filed an Answer to
the Complaint asserting an affirmative defense and two counterclaims. The affirmative defense
and first counterclaim allege that the mortgage is subject to rescission under the Truth in
Lending Act (“TILA”), 15 U.S.C. § 1601 et. seq., on the grounds that the loan originator,
EquiCredit Corporation of America (“EquiCredit”), under-disclosed the finance charge in
violation of TILA.! Mann also seeks damages. Mann’s second counterclaim alleges that the
loan violates the Ilinois Interest Act (“SIA”), 815 ILCS 205/4.1a, on the grounds that the interest
rate on the subject loan exceeds 8% and the lender imposed fees exceeding 3%. Before the court
is BNY’s motion for summary judgment on Mann’s affirmative defense and counterclaims. For

the reasons set forth below, BNY’s motion is granted.

' EquiCredit assigned the loan to BNY.


lender was required to pay an amount equal to 2% of the loan to Inventive.? (Ex. D sub-Ex. 12.)
The $2805.00 YSP was not a broker fee paid by Mann and, therefore, was properly excluded
from the corrected TILA disclosure. See generally Kolle v. SGB Corp., No. 01 C 5708, 2002
WL 31133183, at *2 (N.D. Ill. Sept. 25, 2002) (describing a YSP as lender-paid, rather than
borrower-paid, compensation of the mortgage broker).

The third charge that Mann argues was improperly excluded from the corrected TILA
disclosure is the $3.53 credit report fee charged by EquiCredit. Although TILA generally
requires a fee for a credit report to be included in a finance charge disclosure, 15 U.S.C. §
1605(a)(4), credit report fees charged in conjunction with the extension of credit secured by real
property are clearly exempted from disclosure and “shall not be included in the computation of
the finance charge,” 15 U.S.C. § 1605(e)(6). Consequently, the credit report fee in this home
loan transaction was properly excluded form the TILA disclosure.

In summary, the finance charge of $309, 414.86, disclosed on the corrected TILA
disclosure, was $25.00 less than the actual finance charge that TILA required to be disclosed.'°
Per TILA a variance of $35.00 or less “shall be treated as being accurate for purposes of
[rescission].” 15 U.S.C. § 1635(i)(2). Accordingly, the court finds that Mann has no right to
rescind the loan in question and grants BNY’s motion for summary judgment as to Mann’s
affirmative defense and first counterclaim.

Mann’s second counterclaim alleges that BNY has violated provisions of the ILA because
EquiCredit imposed charges in excess of 3% on Mann’s loan.'! The ILA prohibits lenders from

imposing charges in excess of 3% of the loan principal if the loan carries an interest rate in

9 2% of the $140,250 loan amount is $2805.00.

'° The parties make arguments about whether or not EquiCredit was obligated to include the $11.00 flood insurance
determination fee in the finance charge disclosed on the corrected TILA disclosure, as it did. Because the court
finds EquiCredit’s under-disclosure to be within the tolerance set by TILA, there will be no discussion of this issue.
'' Although the parties make extensive arguments about whether or not the IIA has been preempted by federal law or
implicitly repealed by Illinois law, the court finds the ILA has not been violated and does not address these issues.

12