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Posts published in “Foreclosure”

Fla. App. Court Holds Florida ‘Notice of Assignment of Debt’ Not Applicable to Mortgage Lenders or Foreclosures

The District Court of Appeal of Florida, Second District, recently reversed a final summary judgment in borrowers’ favor, holding that section 559.715 of the Florida Consumer Collection Practices Act (FCCPA) does not apply to the holder of the note and is not an affirmative defense to foreclosure actions because it does not create a condition precedent to an action to foreclose the mortgage and enforce the note. A copy of the opinion in Deutsche Bank National Trust Company v. Hagstrom is available at:  Link to Opinion. A mortgagee filed a foreclosure action, attaching to the complaint a note and an allonge bearing…

7th Cir. Holds Junior Mortgagee is Necessary or Required Party to Illinois Foreclosure

The U.S. Court of Appeal for the Seventh Circuit recently held that a junior mortgagee is a necessary or “required party” to an Illinois foreclosure action, because the trial court could not “accord complete relief” under Fed. R. Civ. P. 19(a) to the plaintiff mortgagee without the junior mortgagee, as the junior mortgagee would still have an interest in the property. A copy of the opinion in U.S. Bank National Association v. Cheryle Collins-Fuller T. is available at:  Link to Opinion. A mortgagee filed a foreclosure action in federal court in Illinois based on diversity jurisdiction.  The mortgagee had its main office…

Fla. App. Court (4th DCA) Reverses Sanctions Against Foreclosing Mortgagee as to Non-Signing Spouse

The District Court of Appeal of the State of Florida, Fourth District, recently reversed an order imposing sanctions against a foreclosing mortgagee, holding that the trial court erred in granting the motion for sanctions because the plaintiff mortgagee had an objectively reasonable belief that a non-signing spouse was a properly named defendant in the case. A copy of the opinion in Trust Mortgage, LLC v. Dina Ferlanti, et al is available at:  Link to Opinion. A mortgagee filed a foreclosure action against husband and wife borrowers. The note and mortgage reflected only the wife as the borrower, but the first page…

Fla. App. Court (4th DCA) Reverses Dismissal of Foreclosure Based on ‘Unclean Hands’

The District Court of Appeal of the State of Florida, Fourth District, recently reversed the dismissal of a mortgage foreclosure action, holding that the trial court “erred in using the doctrine of unclean hands to dismiss the bank’s foreclosure action.” A copy of the opinion in Wells Fargo Bank, N.A. v. Williamson is available at:  Link to Opinion. The borrower defaulted on her mortgage and the mortgagee sued to foreclose. The borrower raised several defenses, including that “the original lender committed fraud and used unclean hands in securing the loan.”  Specifically, the borrower alleged that “the original lender’s loan consultant falsified…

Nevada Fed. Court Denies Class Cert. on ‘Ascertainability’ Grds., Fannie/Freddie Liens Not Extinguished by HOA Foreclosure

The U.S. District Court for the District of Nevada recently confirmed that a homeowner association’s foreclosure of its superpriority lien cannot extinguish a property interest of Fannie Mae or Freddie Mac while those entities are under the Federal Housing Finance Agency’s (FHFA) conservatorship. In so ruling, the Court also denied class certification, holding that the issue of whether Fannie Mae or Freddie Mac held an interest in the property at issue at the time of a homeowner association foreclosure sale presents an impermissible individualized factual inquiry that would require “mini-trials” as to each affected property. A copy of the opinion…

Fla. App. Court (4th DCA) Holds HOA Foreclosure Filed After Recording of Mortgagee’s Lis Pendens Not Barred

Distinguishing its prior ruling in U.S. Bank National Ass’n v. Quadomain Condominium Ass’n, the District Court of Appeal of the State of Florida, Fourth District, recently held that a foreclosure of a homeowners association’s lien against the property owner filed after the recording of a lis pendens by a first mortgagee is not barred, where the association’s subordinate lien was imposed under the association’s declaration of covenants recorded before the first mortgagee recorded its lis pendens. In so ruling, the Court confirmed that the homeowners association’s foreclosure action is inferior to the foreclosure of the first mortgage. A copy of…

Illinois App. Court Rules Deficiency Judgment Not To Be Reduced by Profit on Later Private Sale of Collateral

The Appellate Court of Illinois, Second District, recently held that when a mortgagee obtains a deficiency judgment in a foreclosure action, purchases the property at a judicial sale, and then resells it to a third party for an amount that exceeds the price paid at the judicial sale, the debtor is not entitled to a setoff in the mortgagee’s enforcement proceedings to recover the deficiency judgment. A copy of the opinion in Old Second National Bank v. Jafry is available at:  Link to Opinion. In June 2013, the trial court entered a judgment of foreclosure and sale with respect to a…

Fla. App. Court Rules New Foreclosure Plaintiff Following Transfer of Servicing Failed to Prove Standing

The District Court of Appeal of the State of Florida, Fourth District, recently reversed summary judgment in favor of a mortgagee, holding that a genuine issue of material fact as to whether the original plaintiff or the substituted successor in interest held the note when the complaint was filed precluded summary judgment, and thus that the borrower’s lack of standing defense was not refuted. A copy of the opinion in Craven-Lazarus v. Pennymac Holdings, LLC is available at:  Link to Opinion. A mortgagee sued to foreclose its mortgage. The complaint alleged that it was “entitled to enforce the Note as a…

Ohio Supreme Court Holds Foreclosure Standing Requires Rights to Note, Mortgage, Including Post-Bankruptcy Discharge

The Supreme Court of Ohio recently held that, when debt on promissory note secured by mortgage has been discharged in bankruptcy, the holder of the note may not pursue collection against the maker of note, but the mortgagee has standing to foreclose on the collateral property, and can use the amounts due on the note as evidence to establish that it may collect from the forced sale of the property. The Court also held that, regardless of whether the creditor can obtain a personal judgment on the note against the borrowers, the creditor must still prove that it is the…

MD Ga. Holds SOL on Security Deed is 21 Years, Wrongful Foreclosure Claim May Stand Independently of Fraud Claim

The U.S. District Court for the Middle District of Georgia recently held that when a mortgagee makes some affirmative misrepresentation or action that renders a foreclosure sale unfair, a claim for wrongful foreclosure may stand independently of a claim for fraud. The Court also held that the statute of limitations on a claim under a security deed is 21 years, if the security deed is a sealed instrument under Georgia law. A copy of the opinion in Malone v. Federal Home Loan Mortgage Corporation is available at:  Link to Opinion. On Aug. 26, 2007, in connection with a refinance mortgage…

Illinois App. Court (2nd Dist) Holds Defect in Summons Voids Foreclosure

The Appellate Court of Illinois, Second District, recently held that a foreclosure judgment was void, where the foreclosing first mortgagee did not properly name a second mortgagee in its summons. A copy of the opinion in U.S. Bank National Association v. Johnston is available at:  Link to Opinion. In 1997, the defendant borrowers executed a mortgage and note against their rental property. The mortgage conveyed a lien interest in the property as security for the note to the first mortgagee. This first mortgage was recorded. On Jan. 28, 2005, the defendant-borrowers executed a second mortgage and note against the property. The…

7th Cir. Holds Appealability of Foreclosure Judgments to be Governed by Federal Law

The U.S. Court of Appeals for the Seventh Circuit recently held that as a matter of federal procedural law, a judgment of foreclosure is not a final and appealable judgment, even if state foreclosure law might provide otherwise. Here, the Court held that a Wisconsin judgment of foreclosure was not final and appealable when obtained in a federal district court, even though Wisconsin law treats a foreclosure judgment ordering a sale as final and appealable. A copy of the opinion in Bank of America, N.A. v. Martinson is available at:  Link to Opinion. A mortgagee filed suit to foreclose a residential…