The U.S. District Court for the Middle District of Georgia recently held that when a mortgagee makes some affirmative misrepresentation or action that renders a foreclosure sale unfair, a claim for wrongful foreclosure may stand independently of a claim for fraud. The Court also held that the statute of limitations on a claim under a security deed is 21 years, if the security deed is a sealed instrument under Georgia law. A copy of the opinion in Malone v. Federal Home Loan Mortgage Corporation is available at: Link to Opinion. On Aug. 26, 2007, in connection with a refinance mortgage…
Posts published in July 2016
The U.S. Court of Appeals for the Eleventh Circuit recently reversed in part a trial court’s ruling granting summary judgment in favor of a debt buyer, its affiliated debt collector and their parent company, holding that a reasonable jury could find that the defendants willfully violated section 1681s-2(b) of the federal Fair Credit Reporting Act when they reported two charged-off debt accounts as “verified” without obtaining sufficient documentation that the debts in fact belonged to the plaintiff consumer. In so ruling, the Court held that a jury could find that because the buyer retained the right to seek account-level documentation…
The Appellate Court of Illinois, Second District, recently held that a foreclosure judgment was void, where the foreclosing first mortgagee did not properly name a second mortgagee in its summons. A copy of the opinion in U.S. Bank National Association v. Johnston is available at: Link to Opinion. In 1997, the defendant borrowers executed a mortgage and note against their rental property. The mortgage conveyed a lien interest in the property as security for the note to the first mortgagee. This first mortgage was recorded. On Jan. 28, 2005, the defendant-borrowers executed a second mortgage and note against the property. The…
The U.S. Court of Appeals for the Eighth Circuit recently held that “[a]n accurate and complete proof of claim on a time-barred debt is not false, deceptive, misleading, unfair, or unconscionable under the FDCPA.” In arriving at this holding, the Court declined to follow the Eleventh Circuit’s rulings in Crawford and Johnson. A copy of the opinion in Nelson v. Midland Credit Management, Inc. is available at: Link to Opinion. As you may recall, in Crawford v. LVNV Funding LLC, the Eleventh Circuit held that a debt collector violates the FDCPA when it files a proof of claim in a bankruptcy case…
The U.S. District Court for the Eastern District of New York recently granted summary judgment in favor of a debt collector, holding that the debt collector did not violate the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq., by reporting a debt as “deleted” rather than “disputed,” and by asking probing questions in response to a call from the consumer disputing the debt. In addition, the Court denied the plaintiff’s motion for class certification on ascertainability grounds, holding that trying to decipher the debt collector’s summaries of its calls with the putative class members would not be…
The U.S. Court of Appeals for the Seventh Circuit recently held that as a matter of federal procedural law, a judgment of foreclosure is not a final and appealable judgment, even if state foreclosure law might provide otherwise. Here, the Court held that a Wisconsin judgment of foreclosure was not final and appealable when obtained in a federal district court, even though Wisconsin law treats a foreclosure judgment ordering a sale as final and appealable. A copy of the opinion in Bank of America, N.A. v. Martinson is available at: Link to Opinion. A mortgagee filed suit to foreclose a residential…
The U.S. Court of Appeals for the First Circuit recently held that the cancellation of a foreclosure sale prohibits a borrower from obtaining a permanent injunction to bar a foreclosure, as they would not suffer irreparable harm. A copy of the opinion in Frangos v. Bank of America, N.A. is available at: Link to Opinion. In 2005, the plaintiff borrowers obtained a refinance mortgage loan on their home. The borrowers defaulted on their mortgage in 2007 and again in 2009. The loan was modified but the borrowers still had not made a mortgage payment since 2009. Between 2011 and 2013,…
The District Court of Appeal of Florida, Second District, recently reversed a final judgment of foreclosure, instead directing the trial court to enter judgment in favor of the borrower. In so ruling, the Appellate Court rejected and disregarded the current servicer’s evidence that the loan modification documents had not been received, because the borrowers introduced evidence that they had returned their signed loan modification agreement materials to the prior servicer, the prior servicer received the materials, and the prior servicer accepted the modified payments. With this evidence, the Appellate Court held that the loan had been modified. A copy of…
The Federal Communications Commission (FCC) recently clarified “that the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government’s instructions.” A copy of the FCC’s Declaratory Ruling 16-72 is available at: Link to Declaratory Ruling. As you may recall from our prior update, Congress amended the Telephone Consumer Protection Act (TCPA) in the Bipartisan Budget Act of 2015 to allow autodialed calls “made solely to collect a debt owed to or guaranteed by the…
The federal Consumer Financial Protection Bureau (CFPB) recently issued its “Supervisory Highlights – Issue 12, Summer 2016” report, focusing attention on automobile origination, debt collection, mortgage origination, small dollar lending, fair lending, and remedial actions, reflecting supervisory activity generally completed between January 2016 and April 2016. The CFPB reported deficiencies in Compliance Management Systems and other software-related systems in various industries. The Bureau also emphasized the ECOA “special purpose credit programs” found at various lenders, noting that it “generally takes a favorable view of conscientious efforts that institutions may undertake to develop special purpose credit programs to promote extensions of…
The Court of Appeals of California, Fourth District, recently held that a homeowner who has been foreclosed on by one with no right to do so — by those allegations alone — sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure. Citing Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, the Appellate Court also held that, because the plaintiff properly alleged the foreclosure was void and not merely voidable, tender was not required to state a cause of action for quiet title or for cancellation of instruments. A copy of the opinion in Sciarratta v.…
Interpreting the Supreme Court of the United States’s ruling in Campbell-Ewald Co. v. Gomez, the U.S. District Court for the District of Minnesota recently held that a defendant cannot moot a putative class action against it, even by tendering the full amount claimed to the named plaintiff and before a motion for class certification is filed. A copy of the opinion in Ung v. Universal Acceptance Corporation is available at: Link to Opinion. Beginning in June 2014, an auto finance company allegedly repeatedly called the plaintiff’s cell phone in an attempt to reach an individual who allegedly listed the plaintiff as a…