The U.S. Court of Appeals for the Fifth Circuit recently held that a mortgagee’s foreclosure action did not violate an automatic stay imposed during one of the plaintiff’s chapter 13 bankruptcy schedules, where the debtor failed to amend his bankruptcy schedules to disclose his recent acquisition of the subject property from his son. In so ruling, the Fifth Circuit affirmed the trial court’s judgment in favor of the mortgagee because father and son plaintiffs were judicially estopped from claiming a stay violation. A copy of the opinion in Fornesa v. Fifth Third Mortgage Company is available at: Link to Opinion. A…
Posts published in “Foreclosure”
The U.S. Court of Appeals for the Sixth Circuit recently held that a debtor’s claim seeking to use a bankruptcy trustee’s § 544(a) strong-arm power to avoid a mortgage on the ground that it was never perfected did not require appellate review of the state court foreclosure judgment, and therefore was not barred by the Rooker-Feldman doctrine. A copy of the opinion in In re Isaacs is available at: Link to Opinion. In 2003, the debtor and her husband took out a home-equity loan secured by a mortgage on their home in Kentucky. The original mortgagee did not immediately record…
Answering a certified question from the U.S. Court of Appeals for the Eighth Circuit, the Minnesota Supreme Court recently held that a rule of civil procedure cannot be used to modify deadlines in the state’s foreclosure statute. In so ruling, the Minnesota Supreme Court concluded that to allow a rule of procedure to extend a deadline contained in the Minnesota foreclosure statute would alter the substantive rights of the litigants. At issue in the case was the borrowers’ argument that the loan servicer violated the statutory requirements for handling foreclosures under Minn. Stat. § 582.043. The statute at issue required the borrowers…
The Florida Supreme Court recently resolved a conflict among the state appellate courts. At issue in the case was whether section 702.06, Florida Statutes (2014) permitted lenders to pursue a deficiency claim as a separate action at law even though the foreclosure court had reserved jurisdiction in its final judgment to adjudicate the deficiency claim. The First District Court of Appeal had ruled that a lender could not pursue the deficiency as a separate action at law, which was in conflict with decisions from the Second, Third, Fourth and Fifth District Courts of Appeal. The Florida Supreme Court resolved the…
On June 28, the U.S. Supreme Court granted a Petition for a Writ of Certiorari in Obduskey v. McCarthy & Holthus LLP that presents the question “whether the FDCPA applies to non-judicial foreclosure proceedings.” The borrower in the underlying case defaulted on his home loan and the mortgage servicer hired a law firm to pursue a non-judicial foreclosure. The borrower informed the law firm he was disputing the debt and the law firm, without responding to the dispute, proceeded with the non-judicial foreclosure. The borrower then filed a lawsuit against the mortgage servicer and law firm alleging, among other things,…
The Supreme Court of Pennsylvania recently held that a borrower is not entitled to attorney’s fees under the Pennsylvania Loan Interest Law (“Act 6”) relating to an affirmative defense raised in a mortgage foreclosure action that was subsequently discontinued without prejudice. A copy of the opinion in Bayview Loan Servicing, LLC v. Lindsay is available at: Link to Opinion. The borrower defaulted on his mortgage loan, and the mortgagee filed a foreclosure action. Thereafter, the borrower answered the foreclosure complaint and asserted as an affirmative defense an alleged violation of § 403(a) of Act 6, which, according to the Court, is an “extensive…
The Supreme Court of Wisconsin recently held that claim preclusion does not bar a mortgagee from proceeding with a foreclosure complaint despite a prior litigation which resulted in a dismissal with prejudice if the subsequent litigation is based upon a default and acceleration which occurred after the initial foreclosure proceeding. A copy of the opinion in Federal National Mortgage Association v. Thompson is available at: Link to Opinion. Following a borrower’s default on his mortgage loan, the prior servicer of the loan initiated foreclosure proceedings based upon a default and acceleration alleged to have occurred in 2009. The trial court in this initial foreclosure…
The District Court of Appeal for the Fifth District of Florida recently denied a motion to reconsider an order awarding appellate attorney’s fees to borrowers who were the prevailing party on appeal, reversing judgment of foreclosure entered in favor of the mortgagee. Distinguishing contrary rulings from a different Florida appellate court, the Court upheld its prior order awarding the borrowers attorney’s fees pursuant to Fla. Stat. Section 57.105 and the terms of the subject mortgage, despite its conclusion that the mortgagee lacked standing when it filed the foreclosure complaint, as the mortgagee nonetheless was a party to the mortgage contract…
The District Court of Appeal for the Second District of Florida recently affirmed an order involuntarily dismissing an action to foreclose a second mortgage which secured a home equity line of credit. In so ruling, the Appellate Court upheld the trial court’s holding that the promissory note for the relevant home equity line of credit was not admissible into evidence because it was nonnegotiable, and thus, not a self-authenticating instrument. A copy of the opinion in Third Federal Savings Loan Association of Cleveland v. Koulouvaris is available at: Link to Opinion. A lender bank filed a complaint to foreclose a second mortgage…
The U.S. Court of Appeals for the Fifth Circuit held that where a mortgagee rescinded a notice of intent to accelerate and then filed a foreclosure action without first issuing a new notice of intent to accelerate, it failed to meet its burden to show clear and unequivocal notice of intent to accelerate prior to filing suit, and therefore was not entitled to foreclosure judgment. Accordingly, the Fifth Circuit reversed the ruling of the trial court granting summary judgment in favor of the bank, and dismissed the foreclosure action. A copy of the opinion in Wilmington Trust, N.A. v. Angel…
The District of Columbia Court of Appeals recently held that a condominium association acting on its six-month super-priority lien for unpaid condominium assessments pursuant to § 42-1903.13(a)(2) of the District of Columbia Condominium Act (the “D.C. Condo Act”) may not conduct its foreclosure sale subject to a first deed of trust lien, even if the terms of sale stated that the condo unit would be sold subject to first deed of trust. A copy of the opinion in Liu v. US Bank National Association is available at: Link to Opinion. The borrower obtained a loan to finance his purchase of a condominium…
The Appellate Court of Illinois, First District recently held that a foreclosing mortgagee’s payment of post-foreclosure sale assessments nearly a year after the sale date confirmed the extinguishment of a condominium association’s lien for pre-sale assessments created under the Illinois Condominium Property Act. In so ruling, the First District found that the plain language of the Act did not place any “temporal requirement on the payment of post-purchase assessments in order for the payment to confirm the extinguishment of any lien created under subsection 9(g)(1) of the Act[.]” A copy of the opinion in Quadrangle House Condominium Association v. U.S.…