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Posts published in “Foreclosure”

Illinois App. Court (2nd Dist) Holds Mortgagee Could Not Collect Deficiency from Rents Owed to Other Mortgagees

The Appellate Court of Illinois, Second District, recently held that a mortgagee with a foreclosure judgment could not collect on the deficiency against rents from other properties owned by the mortgagor, because the mortgagee’s foreclosure judgment was not superior to the prior recorded mortgages for the other properties which contained assignment-of-rent clauses, and the other mortgagees had executed forbearance agreements to enforce those assignment-of-rents clauses. A copy of the opinion in BMO Harris Bank N.A. v. Joe Contarino, Inc. is available at:  Link to Opinion. In 2013, a bank, acting as the assignee of the FDIC, foreclosed on four mortgages…

9th Cir. Holds FDCPA §1692f(6) Applies to Non-Judicial Foreclosures

The U.S. Court of Appeals for the Ninth Circuit recently reversed the dismissal of a Fair Debt Collection Practices Act claim arising out of a non-judicial foreclosure.  The Ninth Circuit ruled that section 1692f(6) of the FDCPA applies to non-judicial foreclosure activity. A copy of the opinion in Dale Dowers v. Nationstar Mortgage, LLC is available at:  Link to Opinion. Two borrowers refinanced a loan secured by their home and executed a note and deed of trust.  The lender assigned the note to a purchaser of the subject loan (the “loan owner”).  Later, the lender assigned the deed of trust…

5th Cir. Holds No Statute of Limitations on Texas Home Equity Claims

The U.S. Court of Appeals for the Fifth Circuit recently held that no statute of limitations applies to a mortgage loan borrower’s claims of violations of the requirements for home equity loans contained in section 50(a)(6) of the Texas Constitution. In so ruling, the Court recognized and applied the Texas Supreme Court’s recent ruling in Wood v. HSBC Bank USA, N.A., 505 S.W.3d 542 (2016), which reached the same conclusion, and held that the borrower did not waive the issues in Wood for purposes of the appeal. A link to the opinion in Ocwen Loan Servicing, LLC v. Berry is…

Illinois App. Court (1st Dist) Holds Mortgagee’s Affidavit for Alternative Service Fatally Deficient

The Appellate Court of Illinois, First District, recently vacated a default foreclosure judgment in favor of a mortgagee and against a borrower because the mortgagee’s affidavit in support of its motion for alternative service did not establish the required due diligence demonstrating the investigation made to determine the borrower’s whereabouts, and the trial court therefore lacked personal jurisdiction over the borrower. A copy of the opinion in Urban Partnership Bank v. Ragdale is available at:  Link to Opinion. A mortgagee initiated a foreclosure action against a borrower based upon a mortgage loan between the parties.  The mortgagee was not able…

5th Cir. Holds No Wrongful Foreclosure Without Completed Foreclosure Sale, Substitute Trustee Fraudulently Joined

The U.S. Court of Appeals for the Fifth Circuit recently affirmed a trial court’s denial of a mortgagor’s motion for remand because the non-diverse substitute foreclosure trustee was improperly joined in order to defeat diversity jurisdiction. The Fifth Circuit also affirmed the trial court’s summary judgment ruling in favor of the trustee and loan servicer because the foreclosure sale never took place, and therefore the mortgagor could not state a cause of action for wrongful foreclosure under Texas law. A copy of the opinion in Foster v. Deutsche Bank National Trust Co. is available at:  Link to Opinion. The mortgagor…

Fla. App. Court (1st DCA) Holds Borrowers Waived FHA’s ‘Face to Face’ Requirement as Affirmative Defense

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.…

Fla. App. Court (3rd DCA) Holds Statutory Attorney Fee Reciprocity Does Not Apply in ‘Lack of Standing’ Foreclosure Cases

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…

Fla. App. Court (2nd DCA) Indicates FHA ‘Face-to-Face’ Requirement Applies to ‘Mortgagee and Loan Servicer’

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…

Illinois App. Court (2nd Dist) Holds FHA’s ‘Face to Face’ Meeting Not Required When Loan Discharged in Bankruptcy

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…

Fla. App. Court (3rd DCA) Holds Guarantors Not Joined in Prior Foreclosure Not Estopped, Equitable Defense Available in Guaranty Action

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.…

Fla. App. Court (2nd DCA) Rules Florida’s Notice of Assignment of Debt Does Not Apply to Deficiency Actions

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…

Mass. SJC Holds Omission of Post-Foreclosure Notice Did Not Void Foreclosure

The Massachusetts Supreme Judicial Court (“SJC”) recently affirmed a lower court’s ruling that a mortgagee’s failure to send a post-foreclosure notice required by Mass. Gen. Laws c. 244, § 15A does not render a foreclosure void. A copy of the opinion in Turra v. Deutsche Bank Trust Company Americas is available at:  Link to Opinion. A mortgagee notified a borrower that he was in default under the terms of his mortgage.  The mortgagee subsequently foreclosed on the property and commenced a summary process action.  The borrower then filed suit against the mortgagee, and the mortgagee moved to dismiss the borrower’s…