The Appellate Court of Illinois, First District, recently held that the form foreclosure complaint provided by the Illinois Mortgage Foreclosure Law (IMFL) complies with procedural due process guarantees of the Fifth and Fourteenth Amendments of the United States Constitution, and does not violate the Illinois Constitution’s separation of powers doctrine by usurping the Illinois judiciary’s rulemaking power. A copy of the opinion in Wells Fargo Bank N.A. v. Bednarz is available at: Link to Opinion. A mortgagee foreclosed on the defendant borrower’s residential property. The mortgagee’s complaint tracked a form complaint set forth in section 1504(a) of the IMFL. Section 15-1504(c)…
Posts published in “Mortgage Banking Foreclosure Law”
Mortgage Banking Foreclosure Law
The U.S. Court of Appeals for the Sixth Circuit recently held that two borrowers lacked standing to challenge the validity of a deed of trust in a lien priority dispute interpleader action filed by the foreclosure trustee, as the borrowers did not dispute that they executed the deed of trust, the lien placed on the property was valid, or that they were in default. In so ruling, the Court rejected the borrowers’ argument that an alleged defect in the acknowledgement invalidated the deed of trust, because a validly recorded instrument that was not properly acknowledged shall nevertheless place “all interested…
The District Court of Appeal of Florida, Fourth District, recently upheld a trial court’s ruling that a plaintiff mortgage loan servicer had authority to initiate foreclosure proceedings against borrowers on a mortgage loan evidenced by an electronic note. The Fourth DCA also held that the e-note was a transferable record under the Uniform Electronic Transactions Act. A copy of the opinion in Rivera v. Wells Fargo Bank, NA is available at: Link to Opinion. In April 2008, the borrowers executed an electronic note (“e-note”) in favor of the lender, evidencing a loan secured by a mortgage. In January 2010, the servicer…
The Court of Appeal of the State of California, First Appellate District, recently upheld a trial court’s demurrer without leave to amend in a case in which a judicially noticed Purchase and Assumption Agreement (“P&A Agreement”) contradicted the borrower’s allegations that a subsequent purchaser of the loan had no authority to foreclose on her property. A copy of the opinion in Brown v. Deutsche Bank National Trust Company as Trustee for WAMU Mortgage Pass-Through Certificates Series et al. can be found at: Link to Opinion. In 2004, a borrower obtained a $450,000 loan secured by a deed of trust recorded against…
The U.S. Court of Appeals for the Fifth Circuit recently affirmed the dismissal of a borrower’s claims against her lender arising out of a foreclosure, holding among other things that alleged discrepancies as to the lender’s automatic payment withdrawal services did not state a claim under the Texas Deceptive Trade Practices Act (DTPA). In so ruling, the Court also affirmed the denial of a plaintiff borrower’s motion to join a non-diverse defendant holding that the motion was improperly brought for the purpose of defeating diversity jurisdiction. A copy of the opinion in Villarreal v. Wells Fargo Bank, NA is available at:…
The U.S. Court of Appeals for the Seventh Circuit recently held that a mortgagor is not a third-party beneficiary under a pooling and servicing agreement under New York law, and therefore lacks standing to challenge purported violations of assignments under the agreement. A copy of the opinion in In re Jepson is available at: Link to Opinion. A borrower executed a note for a loan secured by a mortgage. The note was indorsed by the lender in blank and transferred to a residential mortgage-backed securities trust formed and governed by a pooling and servicing agreement (“PSA”). The trust’s trustee held the…
The Third District Court of Appeal, State of Florida, recently reversed a final judgment of foreclosure because the plaintiff mortgagee alleged the same payment default as the basis for its prior 2008 and 2014 foreclosure actions. The Third DCA held that on remand the trial court should calculate the correct amount owed for principal and interest, excluding installments that became due more than five years prior to the filing of the second foreclosure action, in accordance with its en banc ruling in Deutsche Bank Trust Co. Americas v. Beauvais. A copy of the opinion in Collazo v. HSBC Bank USA, N.A. is…
The District Court of Appeal of Florida, Fifth District, recently held that the trial court erred in ruling that a mortgagee failed to comply with the pre-foreclosure notice requirements of the mortgage, as the mortgagee’s default notice substantially complied with the mortgage and did not prejudice the borrower. The Court also held that testimony by the current loan servicer’s employee with regard to a prior loan servicer’s business records established sufficient foundation for the prior servicer’s records to be admitted into evidence as business records under Florida law. A copy of the opinion in The Bank of New York Mellon v.…
The Illinois Appellate Court, First District, recently affirmed a trial court’s denial of a borrower’s motion to vacate a default judgment of foreclosure and sale, rejecting the borrower’s argument that the mortgagee failed to comply with certain Home Affordable Modification Program (HAMP) guidelines. A copy of the opinion in Wells Fargo Bank, N.A. v. Hansen is available at: Link to Opinion. In January 2007, the borrower executed a mortgage in the amount of $360,000, which was later assigned to the mortgagee. In December 2008, the mortgage filed a complaint seeking to foreclose due to default beginning in August 2008. The mortgagee…
The District Court of Appeal of the State of Florida, Fourth District, recently affirmed the trial court’s dismissal of the borrowers’ permissive counterclaims based on violations of the Florida Unfair Trade Insurance Practices Act (FUTIPA) in connection with an alleged “force-placed insurance scheme,” as the allegations were barred by the applicable four-year statute of limitations. The Court upheld the dismissal of the borrowers’ remaining compulsory counterclaims without prejudice for lack of jurisdiction, as the compulsory counterclaims were not appealable until a final disposition of the original case was obtained on the merits. A copy of the opinion in 4040 Ibis Circle,…
The District Court of Appeal of the State of Florida, Fifth District, recently affirmed a final judgment of foreclosure in favor of a mortgagee, holding that: a) the trial court did not abuse its discretion in determining that the bank’s witness was competent to testify about and in admitting the prior servicer’s loan history records into evidence; b) the default letter was not defective because it substantially complied with paragraph 22 of the mortgage; and c) the borrowers failed to present competent evidence that the loan was subject to Federal Housing Administration (FHA) regulations governing the servicing of federally insured…
The Third District Court of Appeal of the State of Florida recently affirmed final judgment in favor of a mortgagee that took title to real property as a result of a foreclosure, and against two homeowner associations, holding that the safe harbor provision of subsection 720.3085(2)(c), Florida Statutes applied, and therefore that the amounts recoverable by the homeowners associations were substantially limited. A copy of the opinion in Catalina West Homeowners Association, Inc., et al. v. Federal National Mortgage Association is available at: Link to Opinion. Husband and wife borrowers obtained a mortgage loan in 2005, which was assigned a little over…