Archive for Loan Modification

DC Cir. Upholds Dismissal of False Claims Act Action Arising Out of 2012 Nat’l Mortgage Settlement

The U.S. Court of Appeals for the D.C. Circuit recently affirmed the dismissal of a federal False Claims Act lawsuit alleging a lender’s violation of the 2012 National Mortgage Settlement and violation of the Home Affordable Modification Program through the lender’s alleged false certifications of compliance. A link to the opinion in U.S. ex rel.

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Calif. App. Court (3rd Dist) Holds Servicer May Owe Borrower Duty of Care as to Loan Mod Efforts

Adding to the growing split of authority among California’s various state appellate courts, and among various federal courts in California, the Court of Appeal of the State of California, Third Appellate District, recently held that a loan servicer may owe a duty of care to a borrower through application of the “Biakanja” factors, even though

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9th Cir. Holds Temporary Stay of Foreclosure Not Enough to Satisfy Diversity ‘Amount in Controversy’

The U.S. Court of Appeals for the Ninth Circuit recently held that the trial court did not have subject matter jurisdiction based upon diversity over claims which sought a temporary stay of a foreclosure sale pending the review of a loan modification application because the amount of controversy did not exceed $75,000. In so ruling,

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NJ Supreme Court Enforces Modification Settlement Made Through Residential Mortgage Foreclosure Mediation Program

The Supreme Court of New Jersey reversed the decision of the Appellate Court, and held that a settlement that a borrower and a lender reached during mediation pursuant to the Residential Mortgage Foreclosure Mediation Program was enforceable because the borrower fulfilled all contingent terms making the agreement permanent. A copy of the opinion is available

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1st Cir. Rejects Borrower’s Loan Modification Fraud Allegations as Untimely

The U.S. Court of Appeals for the First Circuit recently held that a borrower cannot invoke the discovery rule to assert an otherwise untimely Massachusetts UDAAP claim (Chapter 93A) relating to a loan modification agreement, because the alleged harm was not “inherently unknowable” at the time of its occurrence. In so ruling, the Court determined

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Illinois App. Court (3rd Dist) Holds Third Refiled Foreclosure Not Barred

The Appellate Court of Illinois, Third District, recently rejected a mortgagor’s argument that the Illinois single refiling rule barred a third attempt at foreclosure where the intervening foreclosure complaint was premised upon an alleged default under a loan modification agreement. A copy of the opinion in Wells Fargo Bank, N.A. v. Norris is available at:

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8th Cir. Affirms Ruling in Favor of Servicers Due to Plaintiffs’ Misrepresentations in Loan Mod Application

The U.S. Court of Appeals for the Eighth Circuit recently affirmed summary judgment against a former husband borrower and his ex-wife on their claims under the Missouri Merchandising Practices Act (MMPA) and for tortious interference with contract. In so ruling, the Court held that the foreclosure of the plaintiffs’ home loan was justified due to

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8th Cir. Holds Borrower’s Post-Foreclosure Modification Allegations Not Time-Barred

The U.S. Court of Appeals for the Eighth Circuit recently reversed the dismissal of a borrower’s lawsuit against his mortgagee for failing to restore his title after a non-judicial foreclosure and subsequent execution of a loan modification agreement, holding that the borrower’s claims were not time-barred and accrued only when he tried to sell the

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Calif. App. Court (3rd Dist) Holds Loan Mod Denial Letter Allowing Only 15 Days to Appeal Was ‘Material Violation’ of HBOR

The Court of Appeal of the State of California, Third Appellate District, recently held that a mortgage servicer violated California’s Homeowner Bill of Rights (HBOR), Civ. Code § 2923.6(d), when it sent a borrower a loan modification denial letter stating that the homeowner had only 15 days to appeal the denial. In so ruling, the

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Calif. App. Court (2nd Dist) Holds Res Judicata Did Not Bar TILA Action Based on Prior Contract Action

The Court of Appeal of California, Second District, recently held the dismissal of a borrower’s breach of contract claim in a prior lawsuit did not bar a claim in a subsequent lawsuit for violation of the federal Truth in Lending Act, 15 U.S.C. § 1601, et seq., even if the breach of contract and TILA

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3rd Cir. Holds HPA’s Auto-Term Date for PMI Uses Original Value, Not Modification Value

The U.S. Court of Appeals for the Third Circuit recently held that the calculation of the private mortgage insurance (PMI) automatic termination date under the federal Homeowners Protection Act, 12 U.S.C. § 4901 et seq., for modified loans is tied to the initial purchase price of the home, not the updated property value used for

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9th Cir. Holds Servicer May Have Violated UDAP by Soliciting Trial Mod Payments After Determining Borrower Ineligible

The U.S. Court of Appeals for the Ninth Circuit recently reversed an award of summary judgment in favor of a mortgage loan servicer, holding that the evidence could support a verdict that the servicer engaged in an unfair business practice by accepting trial modification plan payments when it had previously determined the borrower was not

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