La Throp v. Bell Federal Savings & Loan Ass'n

The plaintiffs, Ernest and Mary La Throp, sought to represent a class of mortgagors whose mortgages from the defendant, Bell Federal Savings and Loan, are insured by the Federal Housing Authority (FHA) or the Veterans Administration (VA) and whose contracts, on FHA- or VA-prescribed forms, provide that the mortgagee will hold certain tax and insurance funds “in trust to pay” tax and insurance obligations of the mortgagor. They claim that, under the terms of their mortgage contract, an express trust for the benefit of the mortgagors was created as to such funds, in violation of which the…