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Posts published in “Foreclosure”

1st Cir. Holds Fannie Mae Not Liable for Unauthorized Acts of Its Agents

The U.S. Court of Appeals for the First Circuit, on an issue of first impression at the federal appellate level, recently held that the Merrill doctrine – which prevents federal government instrumentalities from being bound by the unauthorized acts of their agents – applies to Federal National Mortgage Association (“Fannie Mae”). Accordingly, the First Circuit affirmed the trial court’s entry of summary judgment in favor of Fannie Mae. A copy of the opinion in Faiella v. Federal National Mortgage Association is available at:  Link to Opinion. The plaintiff borrower took out a loan secured by a mortgage on his home.  The lender…

Calif. Supreme Court Allows Creditor Holding Senior and Junior Liens to Seek Deficiency on Sold-Out Second Lien

The Supreme Court of California recently held that the anti-deficiency statute in California Code of Civil Procedure § 580d did not bar a creditor holding two deeds of trust on the same property from recovering a deficiency judgment on the junior lien extinguished by a non-judicial foreclosure sale on the senior lien. A copy of the opinion in Black Sky Capital, LLC v. Cobb is available at:  Link to Opinion. The bank extended two loans to the borrowers that were secured by deeds of trust on a commercial property.  The bank sold both loans to an investor that subsequently foreclosed on the…

1st Cir. Upholds Use of ‘Integrated Records’ from Prior Servicer

The U.S. Court of Appeals for the First Circuit recently affirmed a mortgage foreclosure judgment, holding that the district court properly admitted into evidence a computer printout from the loan servicer containing incorporated information from prior loan servicers. A copy of the opinion in U.S. Bank Trust, N.A. v. Jones is available at:  Link to Opinion. The plaintiff borrower defaulted on her mortgage loan and the bank filed a diversity action in the U.S. District Court for the District of Maine. “At trial, [the bank] sought to establish the total amount owed on the loan account by introducing a computer…

11th Cir. Holds Moving to Reset Foreclosure Sale During Loss Mit Did Not Violate RESPA or FDCPA

The U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal of a borrower’s claim, holding that a mortgage servicer’s motion to reschedule a previously set foreclosure sale after it approved the borrower for a trial loan modification plan did not violate the federal Real Estate Settlement Procedures Act because the motion to reschedule did not move for an order of sale. A copy of the decision in Landau v. RoundPoint Mortgage Servicing Corp. is available at:  Link to Opinion. A borrower defaulted on her mortgage loan and her lender filed a foreclosure action.  The lender obtained final summary judgment in…

Texas Supreme Court Upholds Contractual Waiver of Statute of Limitations for Deficiency Claims

The Supreme Court of Texas held that the contractual waiver of the statute of limitations on deficiency claims contained in a guaranty agreement was sufficiently “specific and for a reasonable time” as to be enforceable and not void as against public policy. Accordingly, the Texas Supreme Court affirmed the ruling of the appellate court, although it disagreed with portions of the appellate court’s reasoning. A copy of the opinion in Godoy v. Wells Fargo Bank, NA is available at:  Link to Opinion. The lender extended a loan to the borrower, which loan was secured by property owned by the borrower.  A guarantor…

Calif. App. Court (5th Dist) Holds Borrower Entitled to Atty Fees for Successful TRO

The Court of Appeal for the Fifth District of California recently held that a court may award attorneys’ fees pursuant to Civil Code § 2924.12(h) when a borrower obtains a temporary restraining order to stop a non-judicial foreclosure sale. A copy of the opinion in Hardie v. Nationstar Mortgage LLC is available at:  Link to Opinion. The borrowers filed an ex parte application for a temporary restraining order (“TRO”) to enjoin the trustee’s sale of their home.  The application contained a request for attorneys’ fees and costs. The trial court granted the TRO and set a hearing to show cause for a…

5th Cir. Holds Providing Reason for Loss Mit Denial Once Is Enough Under RESPA

The U.S. Court of Appeals for the Fifth Circuit recently held that a mortgage servicer only had to comply with the federal Real Estate Settlement Procedure Act (RESPA) requirements regarding loss mitigation applications once when the servicer had already provided the same reasons for the denial of a loan modification in response to a prior loss mitigation application. A copy of the opinion in Germain v. US Bank National Association is available at:  Link to Opinion. In 2005, a borrower executed a deed of trust in favor of a lender to refinance his home. In 2012, the servicer began servicing the…

Calif. App. Court (4th Dist) Confirms Limited Liability for Foreclosure Trustees

The Court of Appeal for the Fourth District of California recently held that a trustee conducting a non-judicial foreclosure is not subject to tort liability unless it violated duties established by the deed of trust and governing statutes, or if the trustee has effectively taken on a different or modified duty by its actions. A copy of the opinion in Citrus El Dorado, LLC v. Chicago Title Company is available at:  Link to Opinion. A commercial developer purchased real property and obtained a loan to fund construction.  The loan was secured by a deed of trust on the property. The lender…

U.S. Supreme Court Holds FDCPA Has Extremely Limited Applicability to Persons Engaging in Nonjudicial Foreclosure Proceedings

The U.S. Supreme Court handed down its much-anticipated opinion in Obduskey v. McCarthy & Holthus LLP on March 20, ruling the federal Fair Debt Collection Practices Act does not cover persons engaged in “non-judicial foreclosures” except with respect to a single provision contained in the FDCPA. Colorado, like many western states, has a procedure that allows a lender to foreclose property without the need to file a lawsuit. Here, as you may recall, a Colorado borrower defaulted on his home loan and the mortgage servicer hired a law firm to pursue a non-judicial foreclosure.  The borrower informed the law firm he was disputing…

5th Cir. Holds No ‘Detrimental Reliance’ Exception to Unilateral Withdrawal of Acceleration Notice

The U.S. Court of Appeals for the Fifth Circuit recently held that Texas law contains no detrimental reliance exception to a lender’s unilateral right to withdraw an acceleration notice. A copy of the opinion in Jatera Corporation v. U.S. Bank National Association is available at:  Link to Opinion. A borrower defaulted on a Texas home equity fixed adjustable rate note secured by a Texas home equity security instrument. In 2010, the mortgagee through its then loan servicer sent the borrower notice of its intent to accelerate the note and demanded full payment of the debt. The mortgagee filed suit and…

7th Cir. Holds Erroneously Recorded Satisfaction May Be Unilaterally Cancelled and Withdrawn

The U.S. Court of Appeals for the Seventh Circuit recently held that a mortgagee could unilaterally cancel an erroneously recorded satisfaction of the loan where the borrower had not yet detrimentally relied on the erroneous satisfaction. A copy of the opinion in Trinity 83 Development, LLC v. ColFin Midwest Funding, LLC  is available at:  Link to Opinion. A company took out a loan from a bank secured by a mortgage.  The bank sold the loan to a debt buyer.  The debt buyer used a debt collector to collect payments.  The debt collector inadvertently recorded a satisfaction of the debt releasing the mortgage before the…

Illinois App. Court (1st Dist) Holds Borrower’s General Denial Insufficient to Avoid Summary Judgment in Foreclosure

The Appellate Court of Illinois, First District, recently held that a borrower’s general denial that the mortgagee performed the conditions precedent of the mortgage contract prior to filing a foreclosure action was insufficient under Illinois Supreme Court Rules and therefore constituted a forfeiture of the issue. Accordingly, the Appellate Court affirmed the ruling of the trial court granting summary judgment in favor of the mortgagee. A copy of the opinion in The Bank of New York Mellon v. Wojcik is available at:  Link to Opinion. After the borrower defaulted on her mortgage loan, the bank sent her a letter titled “Notice…