Press "Enter" to skip to content

Posts published in “Mortgage Banking Foreclosure Law”

Mortgage Banking Foreclosure Law

Illinois Appellate Court Reverses Trial Court Ruling on Foreclosure Standing

The Illinois Appellate Court, First District, recently reversed a trial court’s ruling that lack of standing in a mortgage foreclosure case was not an affirmative defense.  The Court further remanded the case to allow the borrowers to take discovery, which the Court held was improperly denied by the trial judge. A copy of the opinion is available at:  Link to Opinion. A mortgagee filed a foreclosure action, alleging that the borrowers failed to make payments when due.  In response, the borrowers filed an answer, which included affirmative defenses of alleged lack of standing and alleged lack of capacity to sue.…

Florida Court Holds HOA Declaration Absolved Mortgagee from Liability for Pre-Acquisition Dues

The Appellate Division of the Circuit Court of the 15th Judicial Circuit in Palm Beach County, Fla. recently held that a first mortgagee who took title by foreclosure was not liable for homeowner’s association assessments coming due before it acquired title because the association’s declaration of restrictive covenants absolved a first mortgagee from liability for assessments coming due before it acquires title. A copy of the opinion is available at:  Link to Opinion. An individual purchased real property in a subdivision that was subject to a recorded declaration of covenants, restrictions, conditions and easements. The homeowner defaulted on her mortgage…

Florida Court Cuts Off Extensive Discovery Requests to Mortgagee as to Standing, Satisfaction of Mortgage

The District Court of Appeal of Florida, First District, recently denied a property owner’s effort to appeal the trial court’s order limiting the property owner’s extensive discovery requests to a mortgagee relating to standing and satisfaction of mortgage. In so ruling, the Appellate Court concluded that the trial court’s order limiting discovery did not effectively eviscerate the property owner’s affirmative defenses. A copy of the opinion is available at:  Link to Opinion. A property owner propounded broad discovery requests related to the defenses that the mortgagee lacked standing to foreclose; and that all mortgages on the property had been satisfied…

Florida Bankruptcy Court Holds Debtor Who ‘Surrenders’ Property in BK Cannot Impede Foreclosure

The U.S. Bankruptcy Court for the Middle District of Florida recently held that, at a minimum, “surrender” under Bankruptcy Code §§ 521 and 1325 means a debtor cannot take an overt act that impedes a secured creditor from foreclosing its interest in secured property. In so holding, the Court found that actively contesting a post-bankruptcy foreclosure case is inconsistent with a “surrender” of the property. A copy of the opinion is available at:  Link to Opinion. The Court addressed two separate bankruptcy cases.  The first was a Chapter 7 bankruptcy case, in which the mortgagee instituted a foreclosure action five…

Illinois Appellate Court Holds Borrower Waived Challenge to Trial Court’s Jurisdiction

The Illinois Appellate Court, First District, recently affirmed dismissal of the last of several post-judgment challenges to a default foreclosure judgment, holding that the borrower failed to present a sufficient record on appeal, failed to present sufficient evidence to vacate the default judgment, and also waived any objection to the jurisdiction of the trial court. A copy of the opinion is available here: Link to Opinion. In November 2011, a bank filed a complaint for foreclosure against the borrower for defaulting on his mortgage.  The borrower was served in December 2011, but never answered.  The bank filed a motion for…

5th Cir. Rejects Borrower’s Challenges to MERS, Pooling and Servicing Agreement, Other Claims

The U.S. Court of Appeals for the Fifth Circuit recently held that an assignment of a mortgage deed of trust (“DOT”) from Mortgage Electronic Registration Systems (“MERS”) to an assignee (“Assignee”) was valid under Texas law, because MERS was specifically named as a beneficiary in the DOT and was vested with the power to exercise the rights set forth in the DOT.  Therefore, the Court held, MERS was a valid beneficiary under the Texas Property Code and contract law, and the assignment from MERS to Assignee was valid. The Fifth Circuit further held that the Borrowers lacked standing to challenge…

Fla. App. Ct. (3rd DCA) Applies ‘After Acquired Title’ Doctrine to Save Mortgage Loan

The Third District Court of Appeal of the State of Florida recently affirmed the entry of summary judgment in favor of a mortgagee and against the purchaser at a condominium association assessment foreclosure sale based on the after-acquired title doctrine. A copy of the opinion is available at: Link to Opinion. In July 2007, the borrowers obtained a mortgage loan secured by a condominium unit at a luxury building in Miami Beach. Although the mortgage contained the usual covenant that the borrowers owned legal title to and had the right to mortgage the property, the property was in fact owned…

NJ Fed. Court Reverses Bankr. Court Ruling that Foreclosure Was Barred by NJ Six-Year Statute of Limitations

The U.S. District Court for the District of New Jersey recently held that New Jersey’s 20-year statute of limitations for residential foreclosures applied to a re-filed foreclosure action, reversing a bankruptcy court’s ruling that the shorter six-year statute of limitations period applied. A copy of the opinion is available at:  Link to Opinion. The borrower obtained a $520,000 mortgage loan in February 2007.  The Mortgage and Note listed March 1, 2037 as the maturity date.  The borrower defaulted in July 2007, and a foreclosure action was filed.  However, the foreclosure action was later dismissed for want of prosecution, and then…

Feds State They Will Expect ‘Good Faith Efforts to Comply’ With TRID

The federal banking regulators (including the CFPB) confirmed in an Oct. 1 letter that “[e]xaminers will expect supervised entities to make good faith efforts to comply with the [‘Know Before You Owe’ TILA-RESPA Integrated Disclosure] Rule’s requirements in a timely manner.” More specifically, “examiners will consider the institution’s implementation plan, including actions taken to update policies, procedures, and processes; its training of appropriate staff; and its handling of early technical problems or other implementation challenges.” A copy of the letter issued by the Office of the Comptroller of the Currency (OCC) is available here. The CFPB’s related press release is available…

Illinois Court Holds New Mortgagee May Be Substituted After Foreclosure Sale, Indicates Borrower’s Counsel May Be Sanctioned

The Illinois Appellate Court, First District, recently held that a failure to file a motion to substitute plaintiff in a pending foreclosure proceeding prior to the judicial sale did not invalidate the sale. Also, considering the absence of any meaningful argument advanced on appeal, the Court further ordered counsel for defendant to show cause why he should not be sanctioned. A copy of the opinion is available at: Link to Opinion. The mortgagee filed a foreclosure action, and a judgment of foreclosure was ultimately entered. Thereafter, the mortgagee transferred servicing to a new mortgagee. The new mortgagee appeared at the…

Illinois Appellate Court Allows Use of Prior Servicer’s Records to Prove Amounts Due in Foreclosure

The Illinois Appellate Court, Third District, recently affirmed a grant of summary judgment to a mortgagee over the borrowers’ standing and hearsay challenges. In so ruling, the Appellate Court held that:  (1) the mortgagee’s failure to attach a copy of the note with the indorsement in blank to the complaint did not deprive it of standing; and  (2) an affidavit by an employee of the current holder of the debt was admissible in a foreclosure proceeding even though some of the business records were created by a prior entity. A copy of the opinion is available at: Link to Opinion.…

Florida Appellate Court Confirms Mortgagee Need Only Prove FMV to Obtain Foreclosure Deficiency Judgment

The District Court of Appeal of Florida, Fifth District, recently reversed the denial of a motion for deficiency judgment in a foreclosure action, holding that the trial court erroneously required the mortgagee to introduce into evidence the final judgment of foreclosure previously entered in the same case to demonstrate the amount of debt owed. A copy of the opinion is available at:  Link to Opinion. The trial court granted summary judgment of foreclosure in favor of the mortgagee, specifically reserving jurisdiction to enter further orders, including deficiency judgments.  The borrower did not appeal the judgment of foreclosure. The mortgagee then…