The Supreme Court of Illinois recently held that a bank’s suit for breach of a promissory note — a third attempt to collect from the same defendant borrowers based on the same default of the promissory note — was barred by Illinois’ ‘single refiling rule.’ In so ruling, the Supreme Court concluded that, although the first lawsuit sought relief of foreclosure of the mortgage that secured the loan, and the second and third lawsuits were for breach of the underlying promissory note, all three suits asserted the same cause of action under the mortgage and the note, importantly, because the…
Posts published in “Foreclosure”
The Court of Appeals of California, Fourth District, recently affirmed summary judgment awarded in favor of the mortgage servicer and loan owner defendants on the borrowers’ claims for alleged violations of the California Homeowner Bill of Rights (HBOR), finding that the defendants properly contacted the borrowers and provided them with the required foreclosure information before recording the notice of default. A copy of the opinion in Schmidt v. Citibank, N.A. is available at: Link to Opinion. The plaintiffs (“borrowers”) obtained a loan in 2007, secured by their residence. In 2013, the borrowers defaulted and entered into a loan modification agreement…
The U.S. Court of Appeals for the Seventh Circuit recently affirmed a trial court’s finding that a servicer did not violate the federal Real Estate Settlement Procedures Act (RESPA) and Wis. Stat. § 224.77 because the borrower could not prove that the servicer’s alleged failure to completely respond to a “qualified written request” (QWR) caused any actual damages, notwithstanding the alleged attorney’s fees incurred in reviewing the servicer’s response and the borrower’s alleged emotional distress. In so ruling, the Seventh Circuit held that “RESPA was not intended to give people who cannot pay their mortgages the means to engage in…
In a 2-1 decision, the U.S. Court of Appeals for the Sixth Circuit recently held that, because a complaint’s sole federal claim under the Garn-St. Germain Depository Institutions Act of 1982 did not provide a private cause of action, and because the state law claims did not implicate significant federal issues, the trial court lacked jurisdiction. Accordingly, the Sixth Circuit vacated the trial court’s judgment with instructions to remand the case to state court. A copy of the opinion in Estate of Cornell v. Bayview Loan Servicing, LLC is available at: Link to Opinion. The borrower died with an outstanding…
The Appellate Court of Illinois, First District, held that a borrower’s petition to vacate a final foreclosure order based on allegedly improper service filed six months after the borrower first participated in the foreclosure action was time-barred under the Illinois Mortgage Foreclosure Law. Accordingly, the Appellate Court affirmed the ruling of the trial court dismissing the borrower’s petition. A copy of the opinion in Wells Fargo Bank v. Roundtree is available at: Link to Opinion. In September 2015, the plaintiff mortgagee instituted a foreclosure action against the defendant borrower after she defaulted on her mortgage loan. The mortgagee served the…
The U.S. Court of Appeals for the First Circuit recently affirmed dismissal of a borrower’s state and federal law claims, concluding that the trial court lacked jurisdiction under the Rooker-Feldman doctrine, because the borrower’s federal suit sought to invalidate the state courts’ judgments. A copy of the opinion in Klimowicz v. Deutsche Bank National Trust Company is available at: Link to Opinion. After a borrower defaulted on her mortgage loan, the assignee to the borrower’s mortgage (“mortgagee”) filed a petition in the Massachusetts Land Court to foreclose the mortgaged property. Final judgment was entered in the mortgagee’s favor, and the property was…
The U.S. Court of Appeals for the Seventh Circuit held that the plaintiffs failed to prove a violation of the federal Equal Credit Opportunity Act (ECOA) under a disparate treatment theory where their only evidence was a vague statement from one of the defendant’s employees. Accordingly, the Seventh Circuit affirmed the ruling of the trial court granting summary judgment in favor of the defendant. A copy of the opinion in Mario Sims v. New Penn Financial LLC is available at: Link to Opinion. The plaintiffs, an African-American couple, purchased a home from the seller in October 2008 for $185,000. The plaintiffs…
The U.S. Court of Appeals for the Fifth Circuit recently held that a purported defect in the assignment of a security instrument — that it was executed solely as “nominee,” and not as beneficiary – did not affect the rights of the beneficiary and its successors and assigns to foreclose the subject property, and entered judgment in favor of the mortgagee. A copy of the opinion in Deutsche Bank National Trust Company v. Burke is available at: Link to Opinion. In May 2007, a lender extended a mortgage loan, evidenced by a promissory note executed by the borrower and secured…
The U.S. Court of Appeals for the Eleventh Circuit recently rejected an attempt by homeowners to collaterally attack a state court mortgage foreclosure judgment, affirming the trial court’s dismissal of an amended complaint with prejudice for failure to state a claim, but on alternative grounds. More specifically, the Court upheld the dismissal on the grounds that, “by attempting to prosecute an incomprehensible pleading to judgment, the plaintiffs obstructed the due administration of justice” in the trial court, and by trying to defend the fatally defective complaint on appeal. The Court also ordered plaintiffs’ counsel to show cause why he should…
The U.S. Court of Appeals for the Eleventh Circuit held that 12 U.S.C. § 1715z-20(j) did not alter or limit the lender’s right to foreclose under the terms of the valid reverse mortgage contract where the non-borrower spouse was still living in the home. Accordingly, the Eleventh Circuit affirmed the trial court’s dismissal of the plaintiff’s petition for injunctive relief to prevent the foreclosure sale. A copy of the opinion in The Estate of Caldwell Jones, Jr. v. Live Well Financial, Inc. is available at: Link to Opinion. A borrower obtained a reverse mortgage that was subsequently assigned to the defendant…
In a dispute over surplus funds from a judicial foreclosure property sale, the Florida Supreme Court recently held that a subordinate lienholder’s claim to surplus funds — filed 61 days after the public auction — was timely and superior to the claim of the former record owners of the property. In so ruling, the Florida Supreme Court resolved a certified conflict between Florida’s Second and Fourth District Courts of Appeal by concluding that the 60-day timeframe for filing a claim to surplus funds under the provisions of chapter 45, Florida Statutes, begins upon the clerk’s issuance of the certificate of…
On an issue of first impression, the U.S. Court of Appeals for the Ninth Circuit recently held the federal catchall statute of limitations of four years under 28 U.S.C. § 1658(a) applies to private suits alleging violations of section 303(c) of the federal Servicemembers Credit Relief Act (SCRA). Accordingly, the Ninth Circuit affirmed the dismissal of the plaintiff’s complaint as time-barred. A copy of the opinion in McGreevey v. PHH Mortgage Corporation is available at: Link to Opinion. In 2006, the plaintiff, a U.S. Marine, refinanced a mortgage loan on his home in the state of Washington with a loan from…