The U.S. Court of Appeals for the Fourth Circuit recently concluded that lender-paid mortgage insurance (“LPMI”) disclosures under the federal Homeowners Protection Act are only required if LPMI is a condition of the borrower obtaining the loan. In affirming the trial court’s dismissal of the borrowers’ claims, the Fourth Circuit dissected the specific language of the provision in the HPA addressing disclosures related to mortgage insurance, 12 U.S.C. § 4905. Specifically, the Fourth Circuit determined that the disclosures are only required if LPMI is a condition of the loan at the time of closing. In this case, the lender did not…
Posts published in April 2018
The U.S. Court of Appeals for the Eighth Circuit recently joined with the Third, Fourth, Sixth, Seventh, and Ninth Circuits in applying a materiality standard to section 1692e of the federal Fair Debt Collection Practices Act (FDCPA). In doing so, the Eighth Circuit affirmed the trial court’s order granting judgment in favor of a debt collector and against a borrower. A copy of the opinion in Hill v. Accounts Receivable Services, LLC is available at: Link to Opinion. On Oct. 30, 2015, a debt collector filed suit in Minnesota state court against a borrower for unpaid medical bills and statutory interest under…
In an action against a Florida consumer plaintiffs’ firm that also functions as consumer bankruptcy debtors’ counsel, the U.S. Court of Appeals for the Eleventh Circuit recently held that a bankruptcy attorney violates section 526(a)(4) of the Bankruptcy Code if he instructs a client to pay his legal fees using a credit card. In so ruling, the Court held that there is no requirement under the statute that the advice be given for an invalid purpose designed to manipulate the bankruptcy process. A copy of the opinion in Loyd P. Cadwell v. Kaufman, Englett & Lynd, PLLC is available at: Link…
The U.S. Court of Appeals for the Ninth Circuit recently held that calls from a survey company that received the called party’s contact information through an intermediary did not violate the federal Telephone Consumer Protection Action (TCPA) because the called party provided prior express consent. In so ruling, the Court held that “a party that receives an individual’s phone number indirectly may nevertheless have consent to call that individual,” and it did not matter that the defendant, rather than the entity that actually obtained the called party’s consent, placed the calls. A copy of the opinion in Fober v. Management and…
The U.S. Court of Appeals for the Seventh Circuit recently held that the minor child of a credit card account holder was not bound by the arbitration clause in the cardholder agreement because she did not become an authorized user of the account by using the credit card. The Seventh Circuit also held that the doctrine of estoppel did not bind the minor to the arbitration clause because the minor did not “directly benefit” from her parent’s use of the credit card. A copy of the opinion in AD v. Credit One Bank, NA is available at: Link to Opinion. In…
The Supreme Court of Florida recently denied a pro se borrower’s petition to invoke the jurisdiction of the Court, and imposed sanctions against him for filing numerous meritless and inappropriate petitions for relief pertaining to trial court foreclosure proceedings to which he is a defendant. In so doing, the Supreme Court barred the borrower from filing any future pleadings, motions or requests for relief in the Supreme Court related to his foreclosure proceedings, unless filed in good faith by an attorney in good standing. A copy of the opinion in Rivas v. Bank of New York Mellon is available at: Link…
The U.S. Court of Appeals for the Eighth Circuit held that, under the federal Real Estate Settlement Procedures Act, because the borrower did not prove actual damages he also could not prove he was entitled to ‘additional’ statutory damages, and therefore failed to prove an essential element of his RESPA claim. In so ruling, the Eighth Circuit also held that “[a] borrower cannot manufacture a pattern or practice by sending multiple requests in quick succession involving the same subject matter,” and “that two instances of noncompliance are not enough.” Accordingly, the ruling of the trial court granting summary judgment in…
In an important decision for the debt buying industry, the Massachusetts Supreme Judicial Court held that passive debt buyers are not “debt collectors” under the Massachusetts Fair Debt Collection Practices Act (MDCPA). A copy of the decision in Dorrian v. LVNV Funding, LLC is available at: Link to Opinion. An amicus brief filed by Receivables Management Association International and written by Maurice Wutscher attorneys in support of the appellant is available at: Link to Amicus Brief. In Massachusetts, “debt collectors” must obtain a license from the Division of Banks, the state agency tasked with regulating debt collection in the Commonwealth. Under the MDCPA,…
In a data breach putative class action, the U.S. Court of Appeals for the Ninth Circuit recently held that the plaintiffs sufficiently alleged Article III standing based on an alleged “increased risk of future identity theft.” In so ruling, the Ninth Circuit rejected the defendant’s argument that Clapper v. Amnesty International USA, 568 U.S. 398 (2013), in which the Supreme Court of the United States held “an objectively reasonable likelihood” of injury was insufficient to confer standing, required dismissal. A copy of the opinion in In re Zappos.com is available at: Link to Opinion. In January 2012, hackers breached the servers of…
Joining with the Fourth and Ninth Circuits, the U.S. Court of Appeals for the Seventh Circuit recently affirmed a trial court’s summary judgment order in favor of a debt collector and against a debtor finding that the debt collector did not violate the federal Fair Debt Collection Practices Act (FDCPA) by only verifying the information in its records instead of contacting the creditor to verify the debt. In so ruling, the Court also held that the debt collector did not violate the federal Fair Credit Reporting Act (FCRA) because it conducted a reasonable investigation into the disputed information. A copy…
The U.S. Court of Appeals for the Fourth Circuit recently held that a completely unsecured lien may be stripped off in a Chapter 13 bankruptcy proceeding under 11 U.S.C. § 1322(b) even though a proof of claim has not been filed. A copy of the opinion in Edwin Burkhart v. Nancy Spencer Grigsby is available at: Link to Opinion. Debtors filed a Chapter 13 bankruptcy petition in 2012. At the time, the debtors’ principal residence was valued at $435,000 and encumbered by four liens. Creditor 1 held the mortgage lien with the highest priority in the amount due of $609,500. Creditor 2’s two…
The day before the Second Circuit shut down reverse-Avila claims with its decision in Taylor v. Financial Recovery Services, Inc., the U.S. District Court for the Eastern District of New York dismissed an FDCPA Avila claim involving potential future fees and costs in Derosa v. Computer Credit, Inc. A copy of the opinion is available at: Link to Opinion. This recent chapter in the post-Avila saga involves a consumer who incurred a small hospital debt. A collector sent a letter that used the words “PAST DUE AMOUNT: $174.15” to inform the consumer of the balance. The letter contained no mention of interest, fees,…