The U.S. Court of Appeals for the Third Circuit recently held that the calculation of the private mortgage insurance (PMI) automatic termination date under the federal Homeowners Protection Act, 12 U.S.C. § 4901 et seq., for modified loans is tied to the initial purchase price of the home, not the updated property value used for a borrower’s modification. In so ruling, the Third Circuit rejected several arguments set forth by trade group amici, including reliance on Fannie Mae Servicing Guidelines that allow mortgage servicers to use the estimated value of the property used for a loan modification to calculate the…
Posts published in “Mortgage Banking Foreclosure Law”
Mortgage Banking Foreclosure Law
The District Court of Appeal of Florida, First District, recently held that borrowers waive their affirmative defense that a mortgagee did not comply with HUD’s “face-to-face” condition precedent to foreclosure when they fail to raise the defense until their closing argument at trial. The First District also held that even if the borrowers had timely raised compliance with HUD regulations as an affirmative defense, the mortgagee was not required to comply because the property was more than 200 miles from the mortgagee and its servicing branches. A copy of the opinion in Sarah J. Harris and Bradley C. Harris v.…
The District Court of Appeal of the State of Florida, Third District, recently reversed an award of attorney’s fees to a borrower pursuant to section 57.105, Florida Statutes, holding that because the borrower prevailed on her argument that the foreclosing mortgagee lacked standing to enforce the note and mortgage, there was no contract between the parties, and therefore the borrower could not invoke the attorney’s fees reciprocity provision of the statute. A copy of the opinion in The Bank of New York Mellon Trust Company, N.A. v. Fitzgerald is available at: Link to Opinion. The borrower signed a note and…
The U.S. Court of Appeals for the Ninth Circuit recently reversed an award of summary judgment in favor of a mortgage loan servicer, holding that the evidence could support a verdict that the servicer engaged in an unfair business practice by accepting trial modification plan payments when it had previously determined the borrower was not eligible for a loan modification. A copy of the opinion Oskoui v. J.P. Morgan Chase Bank, N.A. is available at: Link to Opinion. A borrower defaulted on her mortgage loan, and later applied for a loan modification. The mortgage loan servicer sent her a letter…
The District Court of Appeal of the State of Florida, Second District, recently reversed a summary judgment award in favor of the borrowers in a foreclosure action, finding a triable issue of material fact existed concerning whether the face-to-face counseling requirements of 24 C.F.R. § 203.604 applied, as the mortgagee did not submit evidence “as to whether the mortgagee and loan servicer had a branch office within 200 miles of the property during the time period before three full monthly installments due on the mortgage went unpaid.” A copy of the opinion in ARC HUD I, LLC v. Ebbert is…
In an unreported ruling, the Eleventh Circuit Court of Appeals recently affirmed the dismissal of a borrower’s federal Real Estate Settlement Procedures Act (RESPA) claim that the mortgage servicer failed to confirm receipt of the plaintiff’s request for information because the servicer’s signed certified mail receipt qualified as confirmation of receipt under the statute. Importantly, the Eleventh Circuit also held that the plaintiff’s RESPA claim for statutory damages failed to allege an injury in fact under Spokeo. A copy of the opinion in Meeks v. Ocwen Loan Servicing LLC is available at: Link to Opinion. A borrower’s attorney sent the…
The Appellate Court of Illinois, Second District, recently affirmed summary judgment in favor of a mortgagee that failed to meet the FHA requirement to either have a face-to-face meeting with the borrowers or to make “a reasonable effort” to arrange a face-to-face meeting before filing foreclosure, because doing so would have been a futile act after the borrowers’ mortgage loan debt was discharged in bankruptcy and they did not reaffirm the debt. A copy of the opinion in PNC Bank National Ass’n v. Wilson is available at: Link to Opinion. A mortgagee initiated a foreclosure action against borrowers based upon…
The U.S. Court of Appeals for the Fifth Circuit recently held that a group of plaintiffs plausibly alleged claims for violations of the federal Equal Credit Opportunity Act by asserting that a mortgage lender refused to consider their Section 8 income in assessing their creditworthiness as mortgage applicants, and that they received mortgage loans on less favorable terms and in lesser amounts than they would have had their Section 8 income been considered. Additionally, the Fifth Circuit held that the ECOA does not encompass mortgage purchasers and investors who do not participate in the extension of mortgage loans, even when…
The Third District Court of Appeal of the State of Florida recently reversed a summary judgment award in favor of two noteholders seeking a deficiency judgment against the note guarantors who were not joined in a prior foreclosure action as to the collateral, holding that: (a) the guarantors were not estopped from challenging the amounts of the deficiency judgments in a later action at law on their guaranties; and (b) equitable defenses that could have been raised in a mortgage foreclosure action seeking a deficiency can also be raised in a later action against the guarantors to collect the deficiency.…
The District Court of Appeal of Florida, Second District, recently held that section 559.715 of the Florida Consumer Collection Practices Act (FCCPA) does not create a condition precedent that an assignee of a mortgage loan debt must give notice to the consumer 30 days before filing an action seeking a deficiency judgment. A copy of the opinion in Dyck O’Neal, Inc. v. Kami Ward is available at: Link to Opinion. A borrower defaulted on her mortgage loan and the property was foreclosed upon and sold at a foreclosure sale. The judgment was then assigned to a debt collector, who filed…
The U.S. Court of Appeals for the Eighth Circuit recently affirmed a district court’s approval of a proposed class settlement in an action arising from a mortgage loan servicer’s practice of automatically ordering and charging for drive-by property inspections on delinquent borrowers, holding that the district court did not abuse its discretion. In so ruling, the Court also affirmed the trial court’s denial of a borrower’s motion to join a trespass claim to the putative class action. A copy of the opinion in Kenneth Njema v. Wells Fargo Bank, N.A. is available at: Link to Opinion. In 2008, four borrowers…
The U.S. Court of Appeals for the Fourth Circuit recently held that “escrow funds, insurance proceeds, or miscellaneous proceeds” are protected by the anti-modification provisions for Chapter 13 bankruptcies as “incidental property” under the definition of “debtor’s principal residence” in the federal Bankruptcy Code. A copy of the opinion in In re Birmingham is available at: Link to Opinion. A debtor filed a voluntary petition for Chapter 13 bankruptcy. One of the claims against the debtor was a mortgage loan secured by a deed of trust on the debtor’s primary residence. When the debtor filed his original Chapter 13 bankruptcy…