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Posts published by “Ralph T. Wutscher”

Ralph Wutscher's practice focuses primarily on representing 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. He represents the lending and financial services industry as a litigator, and as regulatory compliance counsel. For more information, see https://mauricewutscher.com/attorneys/ralph-t-wutscher/

Federal Banking Regulators Issue Joint Final Flood Insurance Rule

Five of the federal banking regulatory agencies (FDIC, FRB, OCC, FCA, and NCUA) recently issued a joint final flood insurance rule, which among other things: Requires escrowing of flood insurance payments for non-exempt loans secured by residential improved real estate or mobile homes that are made, increased, extended or renewed on or after Jan. 1, 2016; Requires that borrowers be given the option to escrow flood insurance premiums and fees, as to residential loans extant as of Jan. 1, 2016; Clarifies that regulated lending institutions and servicers acting on their behalf are allowed to charge for lender-placed flood insurance; and States…

2nd Circuit Holds Plaintiff’s Individual Claims Not Rendered Moot By Unaccepted Offer of Judgment

The U.S. Court of Appeals for the Second Circuit recently affirmed the denial of a motion to dismiss a putative class action, holding that the named plaintiff’s individual claims were not rendered moot by an unaccepted offer of judgment under Federal Rule of Civil Procedure 68. This case was decided before the U.S. Supreme Court granted certiorari in Campbell-Ewald Company v. Gomez on May 18, 2015.  Campbell-Ewald should address in part whether a case should be dismissed when the plaintiff receives an offer of complete relief on his claim, and whether this rule should be any different if the plaintiff has asserted a class…

Florida Court Reverses Trial Court Order Dismissing Foreclosure With Prejudice Due to ‘Fraud on Court’

The Florida Third District Court of Appeal recently reversed a trial court’s order dismissing a mortgage foreclosure action with prejudice and cancelling the note and mortgage as a sanction, focusing on the mortgagee’s failure to amend the complaint and withdraw two affidavits filed in support of the allegedly “lost” note claim when it had later found the original note. A copy of the opinion is available here. The plaintiff mortgagee sued to foreclose its mortgage in May 2009 after the borrower defaulted. The complaint contained a claim to re-establish the lost note. However, more than two years after the case was…

Florida Supreme Court Rules State-Sponsored Property Insurer Immune from Bad Faith Claims

The Supreme Court of Florida recently held that first-party insurer bad faith is not a ‘willful tort,’ and that, as a government entity that enjoys broad statutory immunity from suit, Citizens Property Insurance Corporation (“Citizens”) is consequentially immune from statutory first-party bad faith causes of action. In sum, the Supreme Court determined that the Florida Legislature, when it created Citizens as a property ‘insurer of last resort,’ did not expressly waive Citizens’ statutory immunity from first-party lawsuits arising under Fla. Stat. § 624.155(1), more commonly known as statutory bad faith actions.  Florida does not and has never recognized a common…

Bankruptcy Court Holds Wholly Unsecured Second Mortgage Lien May Be ‘Stripped Off’

The U.S. Bankruptcy Court for the Southern District of Florida recently held that a wholly unsecured second mortgage lien may be “stripped off,” even if the property encumbered by the lien is no longer part of the bankruptcy estate due to abandonment by the bankruptcy trustee. The Bankruptcy Court did not specifically reference the consolidated cases now before the U.S. Supreme Court in Bank of Amer. v. Toledo-Cardona, and Bank of Amer. v. Caulkett, which should resolve the issue of whether a wholly unsecured lien may be stripped off in a Chapter 7 bankruptcy. However, the Court noted that, “[a]t…

Florida Court Reverses Dismissal of Foreclosure Action, Holds New Default Gives New Right to Foreclose

The Florida First District Court of Appeal recently affirmed a trial court’s dismissal of a follow up foreclosure action based on res judicata to the extent the default date was the same as that in the first action, which had been dismissed for failure to prosecute. However, the Court reversed the trial court’s dismissal of the foreclosure action with prejudice and cancellation of the note and mortgage as a sanction because the trial court failed to make the requisite findings of fact. In addition, the Court held that Florida law allows a subsequent foreclosure action based on subsequent and different…

Florida Court Holds Witness Need Not Be Employed for Entirety of Payment History Period to Lay Proper Business Records Foundation

The Florida Third District Court of Appeal recently reversed a trial judge’s refusal to admit a loan payment history into evidence, holding that the foreclosing mortgagee properly demonstrated that the payment history was a business record, even though its witness started working for the mortgagee in 2012 and the payment history included information since 2005. A copy of the opinion is available at:  http://www.3dca.flcourts.org/Opinions/3D13-0910.pdf The mortgagee started servicing the loan in 2005. The borrowers defaulted in 2009 and the mortgagee sued to foreclose. At trial, the mortgagee called a “mortgage resolution associate,” who had worked at the mortgagee only since 2012, who…

Florida Court Upholds Judgment in Action on Note Following Foreclosure

The Florida First District Court of Appeal recently affirmed a monetary judgment against a borrower in a follow up action to collect the balance owed on a note secured by a mortgage. The follow up action was consolidated with a prior foreclosure action in which the court reserved jurisdiction to enter a deficiency judgment. A copy of the opinion is available at: https://edca.1dca.org/DCADocs/2014/0930/140930_DC05_05012015_101049_i.pdf. The plaintiff bank sued to foreclose its mortgage on the borrower’s property in 2008. The complaint also requested a deficiency judgment. The trial court entered summary judgment against the borrower, reserving jurisdiction to enter a deficiency judgment. The plaintiff mortgagee was…

Ohio Supreme Court Rules Standing Must Exist When Foreclosure Is Filed, But Can Be Proven Later

The Supreme Court of Ohio recently held that, although the plaintiff in a mortgage foreclosure action must have standing to sue when suit is filed, standing can be proven after the case is filed. A copy of the opinion is available at: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2015/2015-Ohio-1484.pdf The plaintiff mortgagee sued to foreclose its mortgage in 2010 after borrowers defaulted on the promissory note. The complaint did not seek a deficiency because the borrowers’ personal liability had been discharged in bankruptcy. One of the borrowers filed an answer raising lack of standing as a defense. The mortgagee moved for summary judgment, supporting its position on…

Florida Court Reverses Trial Court’s Refusal to Extend Duration of Lis Pendens

The District Court of Appeal of Florida for the Fifth District recently held that a trial court’s refusal to extend the duration of a lis pendens on real property was a departure from the essential requirements of law. A copy of the opinion is available at: http://www.5dca.org/Opinions/Opin2015/042715/5D14-4009.op.pdf Due to a scrivener’s error by the closing agent, the real property that was supposed to have secured a loan was not encumbered by the mortgage. The lender sued to reform the loan documents and foreclose or, in the alternative, to impose an equitable lien against the subject property. The lender moved to extend…

First Circuit Confirms Loan Modification Rendered Borrower’s ‘Standing’ Challenge Moot

The U.S. Court of Appeals for the First Circuit recently dismissed a borrower’s appeal as moot because the borrower and loan servicer entered into a loan modification agreement while the appeal was pending, meaning the borrower was no longer subject to any actual or threatened foreclosure proceedings. A copy of the opinion is available at:  Link to Opinion In 2005, the borrower obtained a $200,000 loan secured by a mortgage on her home. The mortgage was assigned twice, the last one to a bank as trustee. The first assignee, to whom the note was transferred along with the mortgage, endorsed…

Ninth Circuit Holds State Court Order Expanding Class Size Triggers Removal Opportunity

The US. Court of Appeals for the Ninth Circuit recently reversed a district court’s order remanding a class action to state court, holding that a second removal was proper and timely-filed 30 days after the state court entered an order that expanded the class definiton after the first removal. A copy of the opinion is available at:  http://cdn.ca9.uscourts.gov/datastore/opinions/2015/04/01/15-55176.pdf The plaintiff, an assistant store manager at a nationwide chain of discount retail stores, filed this action in state court in July of 2012, alleging that the employer supposedly violated the California Labor Code by denying 10-minute rest breaks to its employees. As…