## Facts

- Donald and Joan Brophy applied to Chase Manhattan for a 30-year, fixed-rate VA-insured residential mortgage to purchase a home.
- At application, Chase provided a Good Faith Estimate of settlement charges and an initial Truth in Lending/Regulation Z disclosure using estimated figures.
- The Good Faith Estimate listed (among other items) a 1% loan origination fee, no loan discount, and an estimated mortgage insurance premium.
- The Brophys signed and returned the initial disclosures.
- At closing, Chase provided a HUD-1 Settlement Statement and a final Regulation Z disclosure showing higher and additional charges, including a higher loan origination fee and a loan discount fee not shown on the earlier estimate.
- The Brophys sued Chase and its loan officer, alleging the estimates were not made in good faith and were used to induce them to proceed, asserting federal claims under RESPA and TILA plus Pennsylvania statutory and tort claims.

## Issues

1. Whether RESPA’s good-faith estimate provision, 12 U.S.C. § 2604, creates a private right of action for borrowers.
2. Whether TILA and Regulation Z impose liability when initial estimated disclosures differ from final closing charges absent proof the estimates were not made in good faith.
3. Whether the court should retain supplemental jurisdiction over remaining Pennsylvania statutory and tort claims after resolving the federal claims.

## Decision

- Granted summary judgment to defendants on the RESPA claim because § 2604 does not authorize a private suit.
- Granted summary judgment to defendants on the TILA/Regulation Z claim because plaintiffs did not present evidence that the initial estimates were not made in good faith based on information available at the time.
- Declined supplemental jurisdiction over the state-law claims and dismissed them without prejudice.

## Legal Principles

- A statute’s inclusion of express private remedies in some provisions and omission in another is strong evidence Congress did not intend a private right of action for the omitted provision; RESPA § 2604 provides no private cause of action.
- Under TILA/Regulation Z, required estimates are not guarantees of final charges; differences between estimated and actual charges, by themselves, do not establish a disclosure violation.
- To establish liability based on estimates under TILA/Regulation Z, a borrower must show the lender failed to make the estimate in good faith when issued, not merely that the closing numbers were higher.
- When all federal claims are resolved before trial, a federal court may dismiss remaining state claims under 28 U.S.C. § 1367(c), leaving them for state courts.

## Conclusion

The court entered summary judgment for defendants on RESPA and TILA because § 2604 does not permit private enforcement and the record did not support a finding that the lender’s initial estimates were made without good faith; it then dismissed the Pennsylvania claims without prejudice after declining supplemental jurisdiction.


Brophy v. Chase Manhattan Mortg. Co., 947 F. Supp. 879 (E.D. Pa. 1996)