The U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of a federal False Claims Act (FCA), 31 U.S.C. §§3729-3733, lawsuit brought by private citizen plaintiffs against various mortgage lenders and servicers for supposedly making false certifications regarding loans sold to Fannie Mae and Freddie Mac. In so ruling, the Court held that Fannie Mae and Freddie Mac were not federal instrumentalities for purposes of the FCA, 31 U.S.C. § 3729(b)(2)(A)(i). A copy of the opinion in U.S. ex rel. Adams et al. v. Aurora Loan Services Inc. et al. is available at: Link to Opinion. The plaintiff…
Posts published in February 2016
The U.S. Court of Appeals for the Third Circuit recently affirmed summary judgment against a putative class of borrowers who were allegedly victims of a captive reinsurance scheme by a lender and its affiliated reinsurance company. In so ruling, the Court held that the plaintiff borrowers’ claims were barred by the applicable statute of limitations, and the doctrine of equitable tolling did not apply because the plaintiff borrowers had not exercised reasonable diligence in investigating their potential claims. A copy of the opinion in Judith Cunningham v. M&T Bank Corp. is available at: Link to Opinion. The plaintiff borrowers financed the purchase…
In a case limited to nonjudicial foreclosures, the Supreme Court of California recently held that a borrower may maintain an action for wrongful foreclosure based on an allegedly void assignment. More specifically, the Court held that, “because in a nonjudicial foreclosure only the original beneficiary of a deed of trust or its assignee or agent may direct the trustee to sell the property, an allegation that the assignment was void, and not merely voidable at the behest of the parties to the assignment, will support an action for wrongful foreclosure.” The Court clarified that: “[w]e hold only that a borrower…
The Supreme Court of Tennessee recently affirmed judgment on the pleadings in favor of a tax sale purchaser, holding that although a party challenging the validity of a tax sale for lack of notice does not have to tender the amount owed before filing suit under the Tennessee tax sale statute, MERS had no protected interest in the property arising from the deed of trust’s designation of MERS as beneficiary and nominee for the lender or it being the alleged holder of bare legal title for the purpose of enforcing the lender’s rights. The Court held that, because MERS was…
The federal Consumer Financial Protection Bureau (CFPB) recently issued its final policy regarding “no action letters.” A copy of the final policy is available at: Link to Policy. The final policy establishes a process to apply for non-binding statements from the CFPB as to whether it has any “present intention to recommend initiation of an enforcement or supervisory action against the requester with respect to a specified matter” involving “innovative financial products or services that promise substantial consumer benefit where there is substantial uncertainty whether or how specific provisions of statutes implemented or regulations issued by the [CFPB] would be…
The U.S. District Court for the Eastern District of New York recently granted summary judgment in favor of a debtor in his claim that a debt collector violated the FDCPA when the debt collector, in attempting to reach the debtor by telephone, left a message with a third party providing the debt collector’s callback information. The Court held that because the undisclosed nature of the call may induce the debtor to contact a debt collector when he does not wish to do so, the debt collector must refrain from leaving callback information and attempt the call at a later time…
The District Court of Appeal of the State of Florida, Fourth District, recently affirmed a final judgment of foreclosure in plaintiff mortgagee’s favor, holding that the plaintiff mortgagee was not required to send a second notice of default after it voluntarily dismissed its first foreclosure action before filing the second foreclosure action. A copy of the opinion in Michael E. Sill a/k/a Michael Sill v. JPMorgan Chase Bank, National Association is available at: Link to Opinion. In April 2007, the borrower signed a promissory note and mortgage securing the loan, but defaulted on July 1, 2009. Pursuant to paragraph 22 of the mortgage, the mortgagee sent…
The U.S. Court of Appeals for the Ninth Circuit recently held that, under California law, a two-year delay in failing to investigate the facts entitling a party to rescind a foreclosure sale transaction barred that equitable remedy, even though there was a genuine issue of material fact as to whether the plaintiff foreclosure buyer could have discovered material defects before the foreclosure sale. A copy of the opinion in DM Residential Fund II v. First Tennessee Bank is available at: Link to Opinion. A mortgagee (“lender”) initiated a non-judicial foreclosure of residential real estate in California, and sold that property at a foreclosure sale to…
The District Court of Appeal of the State of Florida, Fourth District, recently affirmed the dismissal of a mortgage foreclosure action because the mortgagee failed to present competent, substantial evidence that it had standing to foreclose, due to lack of conformity between the name of the plaintiff mortgagee and the names in the transactional documentation by which the plaintiff mortgagee claimed an interest in the note at issue. A copy of the opinion in Bank of New York Mellon Trust Company, N.A. v. Dennis M. Conley, et al. is available at: Link to Opinion. A mortgagee filed a foreclosure action. The promissory note contained…
The U.S. Court of Appeals for the Seventh Circuit recently upheld the dismissal of allegations that two letters sent to the consumer’s counsel violated the federal Fair Debt Collection Practices Act (FDCPA), reiterating that its “competent attorney” standard applies regardless of whether a statement to the consumer’s counsel is false, misleading or deceptive. A copy of the opinion in Bravo v. Midland Credit Management, Inc. is available at: Link to Opinion. In a prior action, the debtor sued a debt collector for alleged violations of the FDCPA. The case settled with the collector settling and releasing two of the debtor’s debts. After settlement,…
The U.S. District Court for the District of Oregon recently granted summary judgment in favor of a debt collector, ruling that the collector’s voice mail messages for the debtor did not unlawfully communicate with a third party under the federal Fair Debt Collection Practices Act (FDCPA) and related state law, because the collector could not “reasonably foresee” that debtor’s boyfriend and manager would overhear the voicemail messages left on her cell phone. A copy of the opinion in Peak v. Professional Credit Service is available at: Link to Opinion. A debtor’s unpaid account was referred to a debt collector. The debtor negotiated a…
The U.S. Court of Appeals for the Sixth Circuit recently held that a bankruptcy court clearly erred in its finding that a debtor proposed a Chapter 11 plan in good faith, when the secured mortgagee would be paid only in part and very slowly after 10 years with no obligation by the debtor to maintain the building and obtain insurance, while a second class would be paid in full in two payments of $1,200 each over 60 days. In so ruling, the Sixth Circuit held that the artificial creation of an “impaired” class under section 1124(1) of the Bankruptcy Code,…