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Posts published in “Mortgage Law”

Bankruptcy Court (EDPA) Holds Servicer May Have FDCPA Liability for Proofs of Claim

The U.S. Bankruptcy Court for the Eastern District of Pennsylvania recently held that a debtor alleged a plausible claim against a mortgage loan servicer under the federal Fair Debt Collection Practices Act (FDCPA) based on the servicer's proof of claim filed after obtaining a foreclosure judgment.

9th Cir. Affirms Dismissal of TILA Claims as Barred by FIRREA

The U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of a consumer’s Truth in Lending Act (TILA) claim for lack of subject matter jurisdiction, holding that the claim was barred by the jurisdiction-stripping provision of the federal Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).

1st Cir. Upholds Dismissal of Mass. 93A Claims Against Mortgagee and Servicer As Time-Barred

The U.S. Court of Appeals for the First Circuit recently affirmed the trial court’s dismissal of a consumer’s claims against the owner and loan servicer of her mortgage loan that their collection statements supposedly violated the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A, and the Massachusetts Fair Debt Collection Practices Act, Mass. Gen. Laws ch. 93, 49.

5th Cir. Holds SCRA Does Not Apply to Louisiana Confessions of Judgment

In a case of first impression, the U.S. Court of Appeals for the Fifth Circuit recently held that the protections against default judgment under the Servicemembers Civil Relief Act (SCRA) do not apply to the seizure and sale of real property in in rem proceedings under Louisiana law where the debtors have agreed to a confession of judgment in the mortgage or security agreement.

5th Cir. Rejects Borrower’s Texas Foreclosure Statute of Limitations Challenge

The U.S. Court of Appeals for the Fifth Circuit recently affirmed judgment against a borrower for quiet title claims brought against the owner and servicer of her mortgage loan, and entered judgment of foreclosure in the loan owner and servicer’s favor on their counterclaims for foreclosure against the borrower.

Foreclosing FHA-Insured Mortgages in Ohio: Answers to Common Questions Posed in Contested Litigation

Lenders foreclosing FHA-insured mortgages in Ohio often face challenges that contest the lender’s compliance with relevant regulations from the U.S. Department of Housing and Urban Development (HUD). Like most courts throughout the nation, Ohio courts treat HUD regulations as contractual terms incorporated into FHA-insured mortgage loan documents. As Ohio case law on this issue continues to evolve, confusion—and sometimes shock—can arise for out-of-state lenders unfamiliar with the state-specific intricacies of litigating contested foreclosures involving FHA-insured mortgage loans in Ohio.

7th Cir. Reduces Punitive Damage Award Against Mortgage Servicer by Over 80%

The U.S. Court of Appeals for the Seventh Circuit recently reversed as excessive a jury’s award of $3 million in punitive damages against a mortgage servicer for inadequate recordkeeping, misapplication of payments, and poor customer service. However, the Court affirmed the jury’s award of $582,000 in compensatory damages and remanded the case to the trial court with instructions to reduce the punitive damages award to $582,000, a 1:1 ratio of compensatory to punitive damages.

11th Cir. Adopts ‘False Name Exception’ to Creditor Liability Under FDCPA

The U.S. Court of Appeals for the Eleventh Circuit recently reversed the dismissal of a pro se consumer’s claims under the federal Fair Credit Reporting Act (FCRA), holding that he stated a plausible claim for relief with his allegations that the defendant creditor obtained his credit report without his consent, and failed to reasonably investigate his credit reporting disputes. However, the Court affirmed the trial court’s dismissal of the consumer’s claim under the federal Fair Debt Collection Practices Act (FDCPA) that the creditor defendant used a “false name” in attempting to collect the debt owed to it.

11th Cir. Reverses Denial of Class Cert in Challenge to Post-Discharge Mortgage Statements

In a putative class action of borrowers who received mortgage statements after a bankruptcy discharge, the U.S. Court of Appeals for the Eleventh Circuit recently reversed a trial court order denying certification for failure to establish predominance. In so ruling, the Eleventh Circuit held that…

Illinois App. Court (1st Dist) Holds Equitable Owner Not Necessary Party in Mortgage Foreclosure

The Illinois Appellate Court, First District, recently held that an entity with only a purported equitable interest in a property was only a permissive party to a foreclosure and not a necessary party, and therefore the plaintiff mortgagee was not required to serve the entity…

Calif. App. Court (2nd Dist) Rejects Claim That Loan Assignment During Default Was Void

The Court of Appeal for the Second District of California recently affirmed the dismissal of a borrower’s claims for wrongful foreclosure alleging that the assignment of his mortgage to the foreclosing entity was invalid. In so ruling, the Second District rejected the borrower’s argument that…