The Appellate Court of Illinois, Second District, recently rejected the arguments of two loan guarantors that a bank’s current claims against them were barred by res judicata because the current claims arose out of the same guaranty that the bank used to sue them in a prior action. In so ruling, the Court held that where a single guaranty contemplates multiple loan transactions, each loan transaction constitutes a distinct transaction implicating the guaranty. Therefore, the operative “transaction” for purposes of res judicata is each of the loans. A copy of the opinion in BMO Harris Bank, N.A., v. K & K…
Posts published by “Maurice Wutscher LLP”
The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.
The District Court of Appeal of the State of Florida, Fourth District, recently reversed an order imposing sanctions against a foreclosing mortgagee, holding that the trial court erred in granting the motion for sanctions because the plaintiff mortgagee had an objectively reasonable belief that a non-signing spouse was a properly named defendant in the case. A copy of the opinion in Trust Mortgage, LLC v. Dina Ferlanti, et al is available at: Link to Opinion. A mortgagee filed a foreclosure action against husband and wife borrowers. The note and mortgage reflected only the wife as the borrower, but the first page…
The U.S. Court of Appeals for the District of Columbia recently held that, under the federal Fair Debt Collection Practices Act (FDCPA), a collection letter from a law firm did not misrepresent any meaningful involvement by an attorney. Because the letter clearly stated that the law firm was acting as a debt collector, and that no attorney with the law firm had reviewed the debtor’s account, the D.C. Circuit held the letter was not deceptive as a matter of law. A copy of the opinion in Tawanda Jones v. David Dufek, Sr. is available at: Link to Opinion. A borrower owed…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed the dismissal of a mortgage foreclosure action, holding that the trial court “erred in using the doctrine of unclean hands to dismiss the bank’s foreclosure action.” A copy of the opinion in Wells Fargo Bank, N.A. v. Williamson is available at: Link to Opinion. The borrower defaulted on her mortgage and the mortgagee sued to foreclose. The borrower raised several defenses, including that “the original lender committed fraud and used unclean hands in securing the loan.” Specifically, the borrower alleged that “the original lender’s loan consultant falsified…
The Supreme Judicial Court of Massachusetts recently held that a homeowners association may establish and enforce multiple contemporaneous liens for unpaid common expenses, each with a six-month period of priority over the first mortgage, by filing successive legal actions. A copy of the opinion in Drummer Boy Homes Association, Inc. v. Britton is available at: Link to Opinion. The borrowers purchased a condominium unit, and later began withholding payment of their monthly common expense assessments because of a dispute concerning parking rules and related fines. The condominium association commenced an action to recover the unpaid common expenses and to enforce a…
The U.S. Court of Appeals for the Tenth Circuit recently held that, under Utah law, only the actual levy of a municipal tax assessment on the property constitutes a defect in, or a lien or encumbrance on, title to the insured property. Because the levy of assessment at issue occurred after the title policy was issued, the Tenth Circuit held that the title insurance policy did not cover a loss incurred when a municipality foreclosed on the insured property. A copy of the opinion in BV Jordanelle, LLC v. Old Republic National Title Insurance Company is available at: Link to Opinion. In…
The U.S. District Court for the District of Nevada recently confirmed that a homeowner association’s foreclosure of its superpriority lien cannot extinguish a property interest of Fannie Mae or Freddie Mac while those entities are under the Federal Housing Finance Agency’s (FHFA) conservatorship. In so ruling, the Court also denied class certification, holding that the issue of whether Fannie Mae or Freddie Mac held an interest in the property at issue at the time of a homeowner association foreclosure sale presents an impermissible individualized factual inquiry that would require “mini-trials” as to each affected property. A copy of the opinion…
Distinguishing its prior ruling in U.S. Bank National Ass’n v. Quadomain Condominium Ass’n, the District Court of Appeal of the State of Florida, Fourth District, recently held that a foreclosure of a homeowners association’s lien against the property owner filed after the recording of a lis pendens by a first mortgagee is not barred, where the association’s subordinate lien was imposed under the association’s declaration of covenants recorded before the first mortgagee recorded its lis pendens. In so ruling, the Court confirmed that the homeowners association’s foreclosure action is inferior to the foreclosure of the first mortgage. A copy of…
The Court of Appeal of the State of California, Sixth Appellate District, recently held that a loan owner may be liable for misrepresentations made by the loan servicer. The Court also held that a loan servicer may owe a duty of care to a borrower through application of the “Biakanja” factors, even though its involvement in the loan does not exceed its conventional role. A copy of the opinion in Daniels v. Select Portfolio Servicing, Inc. is available at: Link to Opinion. In May 2005, the borrowers obtained an adjustable rate mortgage. In early 2008, the borrowers asked their servicer to…
In an unpublished opinion, the U.S. Court of Appeals for the Eleventh Circuit recently held that a consumer alleging that she did not receive disclosures required by the federal Fair Debt Collections Practices Act (FDCPA) sufficiently alleged that she suffered a concrete injury, and thus satisfied the standing doctrine’s injury-in-fact requirement under Article III of the U.S. Constitution. In so ruling, the Court confirmed that the FDCPA only applies to debts that are in default when the debt collector obtained them, rejecting the consumer’s argument that “a debt can be in default before the debtor is ever asked to pay…
The Appellate Court of Illinois, Second District, recently held that when a mortgagee obtains a deficiency judgment in a foreclosure action, purchases the property at a judicial sale, and then resells it to a third party for an amount that exceeds the price paid at the judicial sale, the debtor is not entitled to a setoff in the mortgagee’s enforcement proceedings to recover the deficiency judgment. A copy of the opinion in Old Second National Bank v. Jafry is available at: Link to Opinion. In June 2013, the trial court entered a judgment of foreclosure and sale with respect to a…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed summary judgment in favor of a mortgagee, holding that a genuine issue of material fact as to whether the original plaintiff or the substituted successor in interest held the note when the complaint was filed precluded summary judgment, and thus that the borrower’s lack of standing defense was not refuted. A copy of the opinion in Craven-Lazarus v. Pennymac Holdings, LLC is available at: Link to Opinion. A mortgagee sued to foreclose its mortgage. The complaint alleged that it was “entitled to enforce the Note as a…