The U.S. Circuit Court of Appeals for the Fourth Circuit recently held that, in order for a borrower to recover under Maryland’s Credit Grantor Closed End Credit Provisions (CLEC), the borrower must have repaid more than the original principal balance of his or her loan. Additionally, the Court held that a motion under Federal Rules of Civil Procedure 23(d)(1)(B) to provide notice to putative class members can (and in most cases should) be denied at the pre-certification stage because ordinarily there was little danger of prejudicing “absent class members” unless there is substantial evidence of “reliance interest” even at that…
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 U.S. Court of Appeals for the Eleventh Circuit recently held, in a case of first impression, that a creditor violates the bankruptcy discharge injunction by filing a proof of claim on a debt that was previously discharged in another bankruptcy proceeding. A copy of the opinion is available at: Link to Opinion. Husband and wife debtors filed a Chapter 13 bankruptcy petition in 2006. The case was converted to a Chapter 7 liquidation, and the subject debt, a deficiency of approximately $11,000 on a sales contract for a mobile home, was discharged in 2009. In 2012, the debtors filed…
The U.S. Court of Appeals for the Second Circuit recently denied the defendant debt buyer’s petition for panel rehearing, or, in the alternative, for rehearing en banc, as to its ruling (discussed here) that federal National Bank Act preemption applicable to the loan originator does not allow a non-bank debt buyer to charge interest in excess of state usury limits. In so ruling, the Second Circuit noted that, “[a]lthough it is possible that usury laws might decrease the amount a national bank could charge for its consumer debt in certain states (i.e., those with firm usury limits, like New York),…
The U.S. Court of Appeals for the Third Circuit recently held, in a matter of first impression among all of the Courts of Appeals, that a debt collector bears the burden of proving that a communication with a third party falls within the exception for location information contained in subsection 1692b of the federal Fair Debt Collection Practices Act (FDCPA). A copy of the opinion is available at: Link to Opinion. In 2005, a borrower obtained a loan in the amount of $43,300 secured by a mortgage. The mortgage went into default in 2011. The borrower called the mortgage servicer…
The Florida Second District Court of Appeal recently upheld a mortgagee’s notice of default that substantially complied with the applicable provision of the mortgage, ruling that strict compliance is not required. A copy of the opinion is available at: Link to Opinion. The borrowers obtained a mortgage in May 2007 and defaulted in November 2008. In December 2008, the mortgagee sent the borrowers a letter demanding that they cure the default within 30 days, providing the amount needed to reinstate the loan, and warning that failure to cure would result in acceleration and foreclosure. In February 2009, the mortgagee filed…
The Florida Third District Court of Appeal recently granted rehearing en banc in Deutsche Bank Trust Company Americas v. Beauvais, a case holding that a Florida five-year statute of limitations would bar the re-filed foreclosure action at issue. In so ruling, the Court posed two factual questions to the parties, and requested amicus curiae briefs from the Mortgage Bankers Association of South Florida, the Business Law Section of the Florida Bar, the Real Property Probate & Trust Law Section of the Florida Bar, the Florida Alliance for Consumer Protection, Fannie Mae, and Freddie Mac. A copy of the ruling is…
The U.S. Court of Appeals for the Eleventh Circuit recently affirmed a grant of summary judgment to a servicer and its counsel related to a Georgia non-judicial foreclosure. In so ruling, the Court held that the borrowers had no standing to challenge supposed defects in the assignment of a security deed, and could not sustain a claim for wrongful foreclosure absent evidence that the supposed wrongful conduct actually caused the borrowers’ injuries. A copy of the opinion is available at: Link to Opinion. The case arose out of the servicer’s foreclosure of the borrowers’ residence. Based on this foreclosure, the…
The U.S. Court of Appeals for the Ninth Circuit recently held that, in determining whether a putative class action satisfied the jurisdictional requirements of the federal Class Action Fairness Act, amounts in controversy as to non-class and class claims may not be aggregated to meet CAFA’s diversity requirements. More specifically, the Ninth Circuit held that, “where a plaintiff files an action containing class claims as well as non-class claims, and the class claims do not meet the CAFA amount-in-controversy requirement while the non-class claims, standing alone, do not meet diversity of citizenship jurisdiction requirements, the amount involved in the non-class…
The Florida Fifth District Court of Appeal recently quashed a trial court’s order that a mortgagee’s liability for past due HOA assessments was limited to the lesser of the 12 months of assessments prior to the mortgagee’s acquisition of title in connection with foreclosure, or 1 percent of the original mortgage debt, under the safe-harbor provisions of Fla. Stat. s. 718.116. The Appellate Court held that, although the trial court had correctly interpreted the statute, it lacked jurisdiction to rule on the issue because it failed to specifically reserve jurisdiction to adjudicate the amounts due for HOA assessments in its…
The U.S. Court of Appeals for the Third Circuit recently held that a false statement in a communication from a debt collector must be “material” to be actionable under the FDCPA. In so ruling, the Court found that materiality was a part of the “least sophisticated debtor” analysis. A copy of the opinion is available at: Link to Opinion. In that case, a debt collector had purchased credit-card debt from the original lender. That debt collector then hired a law firm to help collect the debt. The law firm then filed suit to collect the debt. In that underlying case, the law…
The United States Bankruptcy Appellate Panel for the Eighth Circuit recently held that filing a proof of claim on a time-barred debt is not, alone, a prohibited debt collection practice under the federal Fair Debt Collection Practices Act. A copy of the opinion is available at: Link to Opinion. Husband and wife debtors filed a Chapter 13 bankruptcy petition. A medical services provider filed a proof of claim shortly thereafter. After their Chapter 13 plan was confirmed, the debtors filed an adversary proceeding against the medical services provider for damages under the FDCPA, arguing that because the debt was time…
The Florida Second District Court of Appeal recently affirmed a trial court’s order granting a new trial on the issue of damages in a mortgage foreclosure action, holding that a payment history authenticated by the successor loan servicer was admissible under the business records exception to the hearsay rule because the successor servicer independently verified the accuracy of the payment history received from the prior servicer and explained the procedures used to verify the prior servicer’s loan records. A copy of the opinion is available at: Link to Opinion. This was the second appeal in the same foreclosure action. In…