Memorandum
Date:
February 26, 2002
To:
All Clients
Re:
Origination Fees on Home Equity Loans
On
December 27, 2001, the United States Federal District Court in Austin in Larry
J. Thomison, et al. v. Long Beach Mortgage Company ruled that a lender origination
fee on a Texas home equity loan was a "fee" to be included in the
3% expense cap. We have attached a copy of the case for your review. We have
talked with the attorney for the lender and have been informed that the case
will be appealed to the Fifth Circuit.
This
case was remanded by order of the Fifth Circuit and a take nothing judgement
was entered withdrawing the prior opinion.
We
still reccomend that a Lender designate any interest charge as "interest"
and not refer to such charge as a "fee".