Providing statements of the amount due, or of the amount required to cure a default – such as in Notices of Intention to Foreclose, periodic statements, and the like — has become risky for mortgage servicers under a recent ruling from the U.S. Court of Appeals for the Third Circuit. The ruling, Kaymark v. Bank of America, involved a foreclosure complaint, which included projected fees and costs that had not yet been incurred at the time the complaint was filed. Ultimately the costs were incurred, but the court found that the foreclosure complaint’s inclusion of the projected fees and costs in the amounts…
Five of the federal banking regulatory agencies (FDIC, FRB, OCC, FCA, and NCUA) recently issued a joint final flood insurance rule, which among other things: Requires escrowing of flood insurance payments for non-exempt loans secured by residential improved real estate or mobile homes that are made, increased, extended or renewed on or after Jan. 1, 2016; Requires that borrowers be given the option to escrow flood insurance premiums and fees, as to residential loans extant as of Jan. 1, 2016; Clarifies that regulated lending institutions and servicers acting on their behalf are allowed to charge for lender-placed flood insurance; and States…
The Illinois Appellate Court, First District, recently affirmed a trial court’s final order in a foreclosure, refusing to vacate summary judgment in favor of the mortgagee, even though the notice of the relevant motions was mailed directly to the borrowers and not their attorney of record, and was originally missing the time of the hearing and the date it was mailed, and even though the borrowers argued that the trial court used the wrong interest rate to calculate the amounts due at sale. In so ruling, the Appellate Court held that the Illinois statutory rate of 9% interest is to…
The FCC voted a 3-2 majority ‘yes’ today on a TCPA declaratory ruling to expand the law in an attempt to prevent unwanted robocalls and “robotexts,” as well as spam and telemarketing calls to wireless phones. The package of rulings also included the approval of robocalling technologies, oral revocation of consent, redefinition of autodialers, as well as other stipulations and exemptions. The rulings addressed 19 petitions for declaratory rulings, one petition for rulemaking and one request for clarification. The rulings, as of this writing, have not been released. The commissioners’ discussions indicate they will address “autodialers,” and some emerging technologies. Exceptions…
The federal Consumer Financial Protection Bureau issued a brief press release yesterday, confirming reports that it would be issuing a proposed amendment to delay the effective date for the “Know Before You Owe” TILA-RESPA Integrated Disclosure (TRID) rule until Oct. 1, 2015. A copy of the press release is available at: Press Release. The press release simply states: “The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law,…
U.S. lawmakers urged the Federal Communications Commission and the Federal Trade Commission to reconsider exemptions to the FCC’s new proposal to update rules that protect Americans from unwanted sales calls, saying that the reforms may not be effective in reducing TCPA violations. In advance of the FCC meeting to vote on Chairman Tom Wheeler’s proposal, U.S. Rep. Tony Cardenas, D-Calif., and fellow members of the House Committee on Energy and Commerce Reps. Jerry McNerney, D-Calif., Leonard Lance, R-N.J., and Gus Bilirakis R-Fla. said the increased TCPA rules in the FCC’s proposal may in fact make it easier for companies to target consumers, rather than…
A prominent property services company recently reached a $1 million settlement with the Illinois Attorney General, resolving allegations that the property services company supposedly wrongfully “locked Illinois residents out of their homes before a foreclosure was finalized,” and requiring the company to submit to 40 new operating standards with monitoring as to compliance. A copy of the Illinois Attorney General’s press release is available here. The Illinois Attorney General stated that the company was “hired by mortgage lenders to determine whether homeowners in default or facing foreclosure are living in their homes. If a property is deemed vacant, [the company]…
The Illinois Appellate Court, First District, recently affirmed the dismissal of a borrower’s petition seeking to vacate a default judgment and order approving sale entered in a mortgage foreclosure action, holding that the borrower waived proper service of the foreclosure complaint. A copy of the opinion is available at: Link to Opinion. The mortgagee sued to foreclose its mortgage under the Illinois Mortgage Foreclosure Law in November 2011. The borrower was served by substitute service shortly thereafter and, approximately five months thereafter, the mortgagee moved for entry of a default. The borrower appeared at the hearing on the mortgagee’s motion for default,…
Large non-bank auto financers will now be supervised by the Consumer Financial Protection Bureau, according to a final rule released June 10, that also outlines the examination procedures that will be used to evaluate said companies. Citing that auto loans are the third largest category of household debt in America, and the automobile leasing market continues to grow, the CFBP says the rule “will help ensure that larger auto finance companies treat consumers fairly.” The rule change may affect approximately 6.8 million customers of 34 of the largest nonbank auto finance lenders, according to the CFBP. The CFPB’s auto lending supervision will…
We expect certainty in the law, especially when it comes to a commercial transaction. A valid and enforceable contract should not become unenforceable simply because it was sold. And worse, it should not be unlawful for the buyer to enforce the purchased contract. But that is the decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland. The facts are not remarkable. Ms. Madden applied for and received a credit card from Bank of America, a national bank. Bank of America transferred her account to FIA Card Services, also a national bank, who issued her a change…
The Florida Fifth District Court of Appeal recently affirmed summary judgment in favor of a mortgagee in an action challenging a notice of default in a mortgage foreclosure action that provided only 28 days to cure instead of the 30 days required under the mortgage. A copy of the opinion is available at: Link to Opinion. The mortgagee sent a notice of default to the borrowers that provided 28 days to cure instead of the 30 days specified in the mortgage. The borrower failed to cure the default and the mortgagee sued to foreclose. Almost four years after the foreclosure action was…
The U.S. Court of Appeals for the Third Circuit recently reversed the dismissal of a borrower’s claims under the Federal Fair Debt Collection Practices Act against a foreclosure law firm, holding that not-yet-incurred fees pled in foreclosure complaint — without conveying that the fees were estimates or imprecise amounts — could constitute an actionable misrepresentation. The Court also rejected the foreclosure firm’s arguments that a foreclosure complaint could not serve as the basis of an FDCPA claim. However, the Court upheld the dismissal of the borrower’s state law claims, due to lack of ascertainable damages. A copy of the opinion is…