The District Court of Appeal of the State of Florida, Fourth District, recently reversed the dismissal of a foreclosure complaint, holding that the “notice of assignment of debt” requirement in the Florida Consumer Collection Practices Act (FCCPA), at Fla. Stat. § 559.715, was not a condition precedent to filing the foreclosure action. However, the Court also held that “the notice requirement of section 559.715 applies to the mortgage foreclosure suit.” A copy of the opinion in Bank of America, N.A. et al v. Siefker et al is available at: Link to Opinion. A mortgagee sued to foreclose its mortgage. The borrower raised…
Posts published in “Foreclosure”
A New York Supreme Court held that the notice of default requirement in New York Real Property Actions and Proceedings Law (RPAPL) § 1304 applies only to a borrower and not a borrower’s estate. As a result, according to the Court, foreclosing entities do not have to provide a notice of default pursuant to the RPAPL to a borrower’s estate after the death of the borrower. A copy of the opinion in US Bank NA v. Levine may be found here: Link to Opinion. A mortgagee commenced a residential mortgage foreclosure action after a deceased borrower’s estate failed to make payments. The…
The U.S. Court of Appeals for the Eighth Circuit recently held that a secured party’s foreclosure did not discharge an otherwise valid security interest in the proceeds of the collateral, nor did it preclude the creditor from pursuing its rights to such proceeds. A copy of the opinion in Bayer CropScience, LLC v. Stearns Bank National Association is available at: Link to Opinion. The borrower settled a lawsuit. Two of the borrower’s creditors claimed priority over the settlement funds. One creditor (“Initial Creditor”) made a $2.62 million loan to the borrower on Sept. 13, 2002, which was secured by all fixtures,…
The U.S. Court of Appeals for the Eleventh Circuit recently held that, under the federal Real Estate Settlement Procedures Act, a mortgage loan servicer had no duty to evaluate a borrowers’ loss mitigation application submitted two days before the foreclosure sale, even though the sale was continued, affirming the district court’s grant of summary judgment in the servicer’s favor. The Court also held that the borrowers had to present evidence that they suffered actual damages or were entitled to statutory damages in support of their claim based on the servicer’s supposedly inadequate response to their “notice of error” under RESPA…
The U.S. Court of Appeals for the Fifth Circuit recently confirmed that a claim of lack of receipt of a notice of default and intent to foreclose does not establish any defect in foreclosure proceedings, and that borrowers can be liable for attorney’s fees for bringing an action against a mortgage servicer under the Fair Debt Collection Practices Act. A copy of the opinion in LSR Consulting, LLC v. Wells Fargo Bank, N.A. is available at: Link to Opinion. The borrowers defaulted on loans on two properties. The mortgagee foreclosed on both, following which the borrowers assigned any alleged claims they had against…
The U.S. Court of Appeals for the Eleventh Circuit recently held that the word “surrender” in the Bankruptcy Code, 11 U.S.C. § 521(a)(2), requires that debtors relinquish all of their rights to the collateral. In so ruling, the Court ordered the borrowers to “surrender” their house to the mortgagee in a foreclosure action, and held that the bankruptcy court had the authority to compel the borrowers to fulfill their mandatory duty under 11 U.S.C. § 521(a)(2) not to oppose a foreclosure action in state court. A copy of the opinion in David Failla, et al v. Citibank, N.A. is available at: …
The Court of Appeal of the State of California, Second District, recently affirmed the denial of injunctive relief to a borrower who claimed a violation of Cal. Civ. Code § 2924(a)(6) of the California Homeowner Bill of Rights, holding that injunctive relief is only available under two specific HBOR provisions where the state legislature explicitly authorized such relief – i.e., Cal. Civ. Code §§ 2924.12(a)(1) and 2924.19(a)(1). Because the borrower’s allegations did not fall under either of those sections, the Court held that the borrower was not entitled to injunctive relief. A copy of the opinion in Lucioni v. Bank of…
The District Court of Appeal of the State of Florida, Second District, recently reversed a summary judgment in favor of a mortgagee in two consolidated actions for declaratory and injunctive relief regarding the extent of the mortgagee’s liability for unpaid homeowners association assessments, holding that the trial court erred because the homeowners association was not joined as a party, and therefore its liens remained unaffected by foreclosure of the mortgages. The Court pointed out that the only remedies available to a purchaser such as the mortgagee was to move “to compel redemption or filing a de novo action to re-foreclose.”…
The Appellate Court of Illinois, Third District, recently held that a mortgagee could foreclose on a husband and wife’s property held as tenants by the entirety despite that only the husband signed the note. In reaching its decision, the Court relied on the fact that the wife signed the mortgage with her husband, and was aware of the existence and the substance of the note. A copy of the opinion in OneWest Bank FSB v. Cielak is available at: Link to Opinion. The borrowers, husband and wife, purchased a home in Illinois. The borrowers acquired the real estate as tenants by…
The District Court of Appeal of Florida, Fourth District, recently held that real property liens arising after a final judgment of foreclosure are not discharged by Florida’s lis pendens statute. A copy of the opinion in Ober v. Town of Lauderdale-by-the-Sea is available at: Link to Opinion. A mortgagee recorded a lis pendens on real property as part of a foreclosure proceeding against a homeowner. Subsequently, the mortgagee obtained a final judgment of foreclosure. However, the foreclosure sale was not conducted for some four years following entry of the judgment of foreclosure. After the foreclosure, and before the foreclosure sale occurred, the…
The Bankruptcy Appellate Panel of the Sixth Circuit recently held that a condominium unit owners association did not violate a debtor’s Chapter 7 discharge order by scheduling a sheriff’s sale to complete a prepetition foreclosure. Rejecting the bankruptcy court’s conclusion that the in rem foreclosure sale was scheduled to induce payment of discharged pre-petition condominium fees, the Sixth Circuit BAP noted that “all foreclosure litigation potentially can induce payments of discharged debt to avoid a foreclosure sale.” Accordingly, the Sixth Circuit BAP held that the foreclosure was not a disguised in personam collection effort, and that the denial of foreclosure…
The District Court of Appeal of Florida, Second District, recently reversed a final summary judgment in borrowers’ favor, holding that section 559.715 of the Florida Consumer Collection Practices Act (FCCPA) does not apply to the holder of the note and is not an affirmative defense to foreclosure actions because it does not create a condition precedent to an action to foreclose the mortgage and enforce the note. A copy of the opinion in Deutsche Bank National Trust Company v. Hagstrom is available at: Link to Opinion. A mortgagee filed a foreclosure action, attaching to the complaint a note and an allonge bearing…