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Posts published in May 2016

NY High Court Holds Consolidated Mortgage/CEMA Retains Priority of First Mortgage

The New York State Court of Appeals, the highest court in the state, recently held that a consolidated mortgage — often called a “Consolidation, Extension, & Modification Agreement” or “CEMA” — qualifies as the first mortgage of record under New York Real Property Law where there is no intervening lien. A copy of the opinion in Plotch v. Citibank, NA is available at:  Link to Opinion. In 2000, the defendant lender extended a mortgage to a condominium unit owner for $54,000 and recorded the mortgage. The following year, the lender extended another mortgage for $38,000 and entered into a consolidation agreement…

11th Cir. Holds Failure to Disclose Disputes Must Be ‘In Writing’ Violates FDCPA

The U.S. Court of Appeals for the Eleventh Circuit recently held that a collection letter sent to the consumer’s attorney is a “communication with a consumer” within the meaning of §1692g of the federal Fair Debt Collection Practices Act (FDCPA). Additionally, the Court held omitting a statement that disputes must be “in writing” in a disclosure under 15 U.S.C. §1692g does not amount to waiver of that requirement by the debt collector, and is instead an omission of a material term in violation of the FDCPA. A copy of the opinion in Connie Bishop v. Ross Earle & Bonan, P.A., et…

11th Cir. Finds No Irreconcilable Conflict Between FDCPA and Bankruptcy Code

In a much-anticipated follow-up to its 2014 decision in Crawford v. LVNV Funding, LLC, 738 F.3d 1254 (11th Cir. 2014), the U.S. Court of Appeals for the Eleventh Circuit recently held that there is no irreconcilable conflict between the federal Fair Debt Collection Practices Act (FDCPA) and the Bankruptcy Code. In so ruling, the Court reversed the dismissal of two FDCPA cases filed against debt buyers that submitted proofs of claim on debts that were subject to a statute of limitations defense. A copy of the opinion in Johnson v. Midland Funding LLC and Brock v. Resurgent Capital Services, L.P. is available…

FCC Issues NPRM as to Calls ‘Made Solely to Collect a Debt Owed to or Guaranteed by the United States’

The Federal Communications Commission (FCC) recently issued a Notice of Proposed Rulemaking (NPRM) regarding recent amendments to the federal Telephone Consumer Protection Act (TCPA), seeking comment on among other things: (1) which calls are covered by the phrase “solely to collect” under the amendments; (2) the meaning of the phrase “a debt owed to or guaranteed by the United States” in the amendments; (3) how the FCC should restrict the number and duration of covered calls; (4) whether consumers should have a right to stop covered calls at any point the consumer wishes; and (5) whether callers should be required…

Nevada Supreme Court Holds HOA Superpriority Lien Does Not Include Atty Fees, Collection Costs

The Supreme Court of Nevada recently held that a superpriority lien for common expense assessments pursuant to Nevada Revised Statutes (NRS) 116.3116(2) does not include collection fees and foreclosure costs incurred by a homeowners’ association. In so ruling, the Court also held that an HOA’s covenants, conditions, and restrictions (“CC&Rs”) that purport to create a superpriority lien covering a different period of time than allowed by NRS 116.3116(2) is superseded and negated by the statute. A copy of the opinion in Horizons at Seven Hills Homeowners Association v. Ikon Holdings, LLC is available at:  Link to Opinion. The HOA recorded its…

Illinois App. Court Holds Pleading Plaintiff is ‘Mortgagee’ Sufficient Under Illinois Mortgage Foreclosure Law

The Appellate Court of Illinois, First District, recently held that an allegation that the plaintiff is a “mortgagee” under the Illinois Mortgage Foreclosure Law (IMFL) is sufficient to plead its capacity to sue. A copy of the opinion in Wells Fargo Bank, N.A. v. Mundie is available at:  Link to Opinion. The plaintiff mortgagee filed a complaint alleging defendant borrowers were in default, and that it was the “mortgagee” under the IMFL, 735 ILCS 5/15-1208. The plaintiff attached copies of the mortgage and the note indorsed in blank to the complaint. The defendants subsequently filed a motion to dismiss and requested…

Maurice Wutscher Opens Atlanta Office, Adds Attorney D. Sharmin Arefin

National financial services law firm Maurice Wutscher LLP has opened a new office in Atlanta, hiring financial services attorney D. Sharmin Arefin to lead the firm’s Georgia litigation and regulatory compliance matters. Arefin will practice in the firm’s Consumer Credit Litigation, Regulatory Compliance, Employment Litigation, and Commercial Litigation groups. She joins Maurice Wutscher’s skilled team of litigators who specialize in appellate matters, business formation and transactions, class action litigation, commercial litigation, construction litigation, consumer credit litigation, contested bankruptcies, contested foreclosures, employment and civil litigation, insurance recovery and advisory services, intellectual property litigation, and regulatory compliance, in offices throughout the United…

7th Cir. Holds Data Breach Plaintiffs Alleged Enough for Article III Standing, but Ruling May Not Hold Up Under Spokeo

Reversing the trial court’s ruling dismissing the action for lack of standing, the U.S. Court of Appeals for the Seventh Circuit recently held that the increased risk of fraudulent credit or debit card charges and possible identity theft due to a data breach that already occurred was “certainly impending future harm” and was sufficient for Article III standing. In addition, the Court also held that time and money the plaintiffs allegedly spent resolving fraudulent charges and possible identity theft also were sufficient injuries for Article III standing. However, this opinion was issued prior to the Supreme Court of the United…

3rd Cir. Rejects Attempt to Distinguish Campbell-Ewald, Holds Rule 68 Offer of Judgment Did Not Moot Claims

The U.S. Court of Appeals for the Third Circuit recently upheld a trial court’s ruling that an unaccepted offer of judgment under Fed. R. Civ. Pro. Rule 68, made before a plaintiff files a motion for class certification, does not make the case moot. The copy of the opinion in Weitzner v. Sanofi Pasteur, Inc. is available at:  Link to Opinion. The named plaintiff filed a putative class action against the defendants for alleged violation of the federal Telephone Consumer Protection Act (TCPA). The plaintiff alleged that the defendants transmitted more than 10,000 facsimiles to the plaintiff and other members of…

11th Cir. Reverses Dismissal of RESPA ‘Notice of Error’ Servicing Claim

The U.S. Court of Appeals for the Eleventh Circuit recently held that a borrower properly pleaded a “notice of error” claim under the federal Real Estate Settlement Procedures Act (RESPA), reversing the lower court’s grant of the servicer’s motion to dismiss. A copy of the opinion in Renfroe v. Nationstar Mortgage, LLC is available at:  Link to Opinion. In 2006, a borrower refinanced her mortgage with a lender, with monthly payments of $998.68. Several years later, servicing of the loan was transferred.  The borrower’s payments allegedly increased by about $100 after the transfer. The borrower claimed that she repeatedly contacted the…

Illinois App. Court Rejects Borrower’s Constitutional Challenge to Illinois Statutory Form Foreclosure Complaint

The Appellate Court of Illinois, First District, recently held that the form foreclosure complaint provided by the Illinois Mortgage Foreclosure Law (IMFL) complies with procedural due process guarantees of the Fifth and Fourteenth Amendments of the United States Constitution, and does not violate the Illinois Constitution’s separation of powers doctrine by usurping the Illinois judiciary’s rulemaking power. A copy of the opinion in Wells Fargo Bank N.A. v. Bednarz is available at:  Link to Opinion. A mortgagee foreclosed on the defendant borrower’s residential property.  The mortgagee’s complaint tracked a form complaint set forth in section 1504(a) of the IMFL.  Section 15-1504(c)…

6th Cir. Rejects Borrowers’ Attempt to Invalidate Deed of Trust Based on Faulty Acknowledgement

The U.S. Court of Appeals for the Sixth Circuit recently held that two borrowers lacked standing to challenge the validity of a deed of trust in a lien priority dispute interpleader action filed by the foreclosure trustee, as the borrowers did not dispute that they executed the deed of trust, the lien placed on the property was valid, or that they were in default. In so ruling, the Court rejected the borrowers’ argument that an alleged defect in the acknowledgement invalidated the deed of trust, because a validly recorded instrument that was not properly acknowledged shall nevertheless place “all interested…