The Court of Appeal of the State of California, Second Appellate District, recently reversed a trial court’s dismissal of a complaint alleging a servicer violated California’s Homeowner Bill of Rights by proceeding with a trustee’s sale when the servicer and the borrowers were allegedly exploring a loan modification. In so ruling, the Appellate Court made two key holdings: First, the Appellate Court held that a borrower does not need to tender the balance due prior to instituting a suit for alleged violation of the HBOR. Second, the Appellate Court also held that a borrower’s failure to timely provide the documents…
The U.S. Court of Appeals for the Ninth Circuit recently held that a debt collector’s demand seeking 10 percent interest that was not expressly authorized by the debt agreement did not violate the federal Fair Debt Collection Practices Act or California’s equivalent Rosenthal Act, because the pre-judgment interest was permitted by state law. A copy of the opinion is available at: Link to Opinion. The plaintiff incurred a debt for dental services in 2011. The provider referred the debt to a collection agency, which sent a demand letter in May 2012 seeking the principal balance owed, plus interest at 10…
In a 5-4 decision yesterday, the U.S. Supreme Court held that disparate impact claims are cognizable under the federal Fair Housing Act (FHA), but put in place various limits and safeguards. A copy of the opinion is available at: Link to Opinion. The underlying lawsuit involved a dispute between a Texas-based nonprofit that assists low-income families with finding affordable housing and a Texas state department that distributes tax credits to developers. The nonprofit sued the department under a disparate impact theory, claiming that the department violated the FHA because it had allocated too many tax credits to housing in predominantly minority inner-city…
The Court of Appeal of the State of California, Third District, recently vacated a trial court order denying two borrowers’ motion for attorney fees and costs pursuant to Cal. Civ. Code § 2924.12 after they obtained a preliminary injunction as to the trustee’s sale of their home due to alleged “dual tracking” violations. A copy of the opinion is available at: Link to Opinion. Two borrowers filed an ex parte application for a temporary restraining order (“TRO”) to prevent the trustee’s sale of their residence, as well as a civil complaint against the real parties in interest. The trial court…
As referenced in our prior update, the federal Consumer Financial Protection Bureau (CFPB) issued a proposed rule to change the effective date for the “Know Before You Owe” TILA-RESPA Integrated Disclosure rule to October 3, 2015. A copy of the proposed rule and request for public comment is available at: Click Here The CFPB previously indicated the effective date would be delayed to Oct. 1, 2015. The CFPB stated that it “is proposing a new effective date of Saturday, October 3,” explaining that “scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend…
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]…