The Consumer Financial Protection Bureau and Department of Justice recently entered into a Consent Order with an automobile finance company for alleged violations of the federal Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 (ECOA), arising from the auto finance company’s policies and practices allowing car dealer discretion for interest rate markups. A copy of the consent order is available at: Link to Consent Order. A copy of the related DOJ complaint is available at: Link to Complaint. In connection with sales of cars on credit, car dealers frequently submit credit applications to auto finance companies on behalf of their…
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 Ninth Circuit recently affirmed a district court’s dismissal of a borrower’s claims for breach of contract and breach of fiduciary duty relating to alleged failures to properly disburse escrow amounts against a non-servicer assignee of a mortgage loan. In so ruling, the Court confirmed that Washington does not bar splitting the loan servicing duties from the right to receive payment under the note. A copy of the opinion is available at: Link to Opinion. The deed of trust between the borrower and the loan originator required the borrower to pay the hazard insurance…
The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a borrower’s allegations under the federal Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act as to one letter, the purpose of which was to request additional information, but reversed as to two other letters, holding that they were sent in connection with the collection of a debt. A copy of the opinion is available at: Link to Opinion. The plaintiff’s mortgage loan went into default and the law firm representing the lender sent the borrower three letters. Two weeks later, the borrower…
The U.S. Court of Appeals for the Fourth Circuit recently reversed the dismissal of a Chapter 13 bankruptcy debtor’s complaint filed in federal district court alleging that defendants foreclosed on and sold the debtor’s home in violation of the automatic stay, holding that the federal district court had subject matter jurisdiction and the complaint adequately stated a plausible claim for relief under 11 U.S.C. § 362(k). In so ruling, the Court held that 11 U.S.C. § 362(k), which created a private right of action for damages for willful violation of the stay, may be filed in federal district court because…
The Maryland Court of Special Appeals recently held that a borrower could not maintain a lawsuit asserting federal Fair Debt Collection Practices Act and other related state-law claims because those claims were barred by collateral estoppel due to litigation in a prior collection action. In so ruling, the Court held that the doctrine of res judicata did not necessarily bar the borrower from narrowly attacking the means used to collect the debt under the FDCPA and state law, rather than attacking the validity of the debt itself, because the FDCPA and related state-law allegations gave rise to new and different…
The U.S. Court of Appeals for the Eleventh Circuit recently held that the FDCPA applies to litigation activity, even when the debt collector’s conduct is directed at someone other than the consumer, such as the court or the debtor’s counsel. A copy of the opinion is available at: Link to Opinion. A creditor obtained a money judgment against a debtor, and then sought and obtained a continuing writ of garnishment on the debtor’s wages in order to collect the debt. In response, the debtor filed a claim of exemption, which the creditor disputed in a sworn reply. However, the writ…
The operators of a fraudulent debt collecting scheme have settled Federal Trade Commission charges against them by agreeing to be banned from the debt collection business and telemarketing. The defendants were named in an FTC complaint last year, which alleged that they collected millions of dollars from Spanish-speaking consumers throughout the country by demanding they pay non-existent debts. The various companies and individuals were said to have been threatening their victims with lawsuits and arrest and immigration status investigations if they did not agree to make payments on the falsified debts. The settlement orders that the fraudulent company and related…
The U.S. Court of Appeals for the Eighth Circuit recently affirmed the dismissal of a debtor’s federal Fair Debt Collection Practices Act (FDCPA), federal Fair Credit Reporting Act (FCRA), and state law claims where a debt collector for a major bank pulled the debtor’s credit report and served a garnishment summons after the debtor allegedly had sent a cease-and-desist letter to the debt collector. In so ruling, the Court confirmed that: (1) a debt collector may pull a debtor’s credit report for collection purposes, and that the debt collector did not need to notify the debtor before reviewing such information;…
The U.S. District Court for the District of Nevada recently held that the federal Housing Economic Recovery Act of 2008 (HERA) requires super-priority lien holders to obtain consent from the Federal Housing Finance Agency (FHFA) prior to foreclosing on any liens on properties where the FHFA is acting as conservator. A copy of the opinion is available at: Link to Opinion. In 2007, two borrowers obtained a $105,700 loan on a property located in Las Vegas that was secured by a Deed of Trust on the property. The property was also part of a homeowners association (HOA) and subject to…
The Ninth Judicial Circuit Court of Florida recently granted summary judgment to an insured against a title insurer after the title insurer failed to except a title defect from coverage under a policy. In so ruling, the Court held that breaching a policy of title insurance exposes the title company to extra-contractual liability beyond the policy’s limits. A copy of the opinion is available here: Link to Opinion. In this case, the insured had purchased 253 acres of property in Florida. The title insurer issued a policy that failed to note a recorded mobile home plat that appeared to cover…
The Appellate Court of Illinois, Third District, recently affirmed a grant of summary judgment of foreclosure in favor of a mortgagee in spite of an inconsistency between the copy of the note attached to the complaint and the note introduced into evidence. A copy of the opinion is available at: Link to Opinion. The foreclosing plaintiff mortgagee originally attached to its complaint a note that had a stamp stating it was a “true and correct copy of the original.” This copy of the note did not have any indorsement. However, at summary judgment, the plaintiff introduced the original note. Unlike…
The Seventh Judicial Circuit Court of Florida recently denied a motion to dismiss a borrower’s counterclaims alleging violations of the Florida Consumer Collections Practices Act (FCCPA) against the owner of a mortgage loan, based on alleged communications by the servicer and foreclosure counsel with a debtor supposedly known to be represented by counsel and attempting to collect an allegedly invalid debt. In so ruling, the Court also held: Merely foreclosing on a mortgage, without more, did not constitute “debt collection” under the FDCPA; False statements regarding a debt made to a court instead of directly to the debtor are not…