The future of federal rules covering debt collection has been thrown into doubt amid the leadership change at the Consumer Financial Protection Bureau. In one of his first actions since taking the helm of the CFPB as acting director, Mick Mulvaney announced a halt on all Bureau rulemaking, reported Reuters. It has been more than four years since the CFPB announced plans to propose the first-ever rules regulating debt collectors subject to the federal Fair Debt Collection Practices Act. Last year it issued an outline of what those rules might look like. The Bureau had indicated earlier this year that…
The Appellate Court of Illinois, Second District, recently held that even though the Illinois Residential Mortgage License Act (“IRMLA”) was applicable to a lender that only made one loan in Illinois, an amendment to the IRMLA provided an exception to the law of the case doctrine and under the amendment the mortgage was not void merely because the lender was not licensed under the IRMLA at the time the loan was extended. A copy of the opinion in First Mortgage Company v. Dina is available at: Link to Opinion. As you may recall, in First Mortgage Co. v. Dina, 2014 IL…
The U.S. Court of Appeals for the Seventh Circuit recently held that federal laws exempting federal entities from state and local taxation do not apply when the transfer tax is charged to a private buyer who purchases real estate from Fannie Mae, Freddie Mac, or the Federal Housing Finance Agency (FHFA). A copy of the opinion in FNMA, et al. v. City of Chicago, et al. is available at: Link to Opinion. A group of buyers purchased real property in Chicago from Fannie Mae. The City of Chicago imposes a Real Property Transfer Tax on the transfer of real property located…
The U.S. Court of Appeals for the Third Circuit recently reversed an order denying a motion to compel production of a marketing database of putative class members in a federal Telephone Consumer Protection Act (TCPA) lawsuit. In so ruling, the Third Circuit held that: (1) defendants arguing that a class is not ascertainable should be required to produce information in its possession about putative class members during discovery, and (2) although affidavits from potential class members alone do not satisfy the ascertainability standard for class certification, such affidavits in combination with other records can meet the ascertainability standard. A copy of…
The California Court of Appeal for the Second District recently held that the mortgage lender’s purchase at foreclosure sale of a leasehold estate – identified in the deed of trust by reference to the lease – did not constitute an express agreement to assume the lease. A copy of the opinion in BRE DDR BR Whittwood CA LLC v. Farmers and Merchants Bank of Long Beach is available at: Link to Opinion. In December 2006, the original owner of a shopping center entered into a 15-year lease with the tenant for restaurant space. After a series of transactions, the shopping center was…
The U.S. Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a bank’s lawsuit against its insurer for breach of contract and bad faith denial of coverage, holding that the insurance policy’s exclusion for any claim based upon or arising from fees or charges applied to the facts alleged. The bank argued that the primary sources of the claims against it concerned the bank’s policies and procedures, which were not the subject of a policy exclusion. However, the Court held the insurer was not required to defend or indemnify the bank for the underlying $24 million settlement…
In an appeal involving an amicus filed by a national mortgage lending trade association, the District Court of Appeal of the State of Florida, Fourth District, recently reversed a final judgment of foreclosure in favor of a mortgagee, holding that the mortgagee failed to prove that it had possession of the promissory note when the complaint was filed and thus lacked standing to sue because: (a) despite the admission of the Pooling and Servicing Agreement (PSA) into evidence, the evidence was still insufficient to show that the loan was physically transferred; and (b) there were discrepancies between the copy of…
The U.S. Court of Appeals for the Ninth Circuit recently held that a plaintiff cannot force remand of a federal Class Action Fairness Act (CAFA) removal under the home-state controversy exception when only a portion of the putative class met the two-thirds citizenship requirement. A copy of the opinion Brinkley v. Monterey Financial Services, Inc. is available at: Link to Opinion. A financial services company (“defendant”) allegedly recorded or monitored its telephone conversations with the plaintiff without giving her notice. The plaintiff brought this action in California state court “alleging (1) invasion of privacy in violation of California and Washington state law; (2) unlawful…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed the dismissal of a mortgage foreclosure action based on res judicata and the statute of limitations, holding that the Florida Supreme Court’s recent ruling in Bartram v. U.S. Bank National Association and its progeny controlled. In so ruling, the Court confirmed that a second foreclosure action is not barred by the statute of limitations or res judicata where continuing payment defaults occurred within the five years preceding the filing of the second foreclosure action. A copy of the opinion in HSBC Bank USA, National Assoc., etc.…
The U.S. Court of Appeals for the Ninth Circuit recently held that a liability insurance policy that broadly excluded coverage for invasion of privacy claims also excluded coverage for claims for violations of the federal Telephone Consumer Protection Act. A copy of the opinion in L.A. Lakers v. Federal Ins. Co. is available at: Link to Opinion. In 2012, a class action complaint was filed against the Los Angeles Lakers for allegedly sending text messages using an automatic telephone dialing system in violation of the TCPA, 47 U.S.C. § 227, et seq. The Lakers asked their insurer to defend them against…
9th Cir. Limits Subsequent Good-Faith Transferee Exception in Bankruptcy Fraudulent Transfer Actions
9th Cir. Limits Subsequent Good-Faith Transferee Exception in Bankruptcy Fraudulent Transfer Actions
The U.S. Court of Appeals for the Ninth Circuit recently held that a debtor corporation’s sole shareholder and third parties who sold real property and services to the sole shareholder could be liable for fraudulent transfers. In so ruling, the Ninth Circuit held that the third parties were initial transferees of the debtor corporation’s funds because the sole shareholder paid the third parties with checks directly from a corporate account, even though the third parties did not have a pre-existing relationship or an ongoing relationship with the sole shareholder, his family, or any of his businesses. A copy of this…
The U.S. Court of Appeals for the First Circuit recently held that a borrower’s claim under the Massachusetts Predatory Home Loan Practices Act (MPHLPA) was barred by the applicable five-year statute of limitations where the loan was extended more than five years before the complaint was filed and the borrower did not allege facts to demonstrate that tolling should apply. Accordingly, the First Circuit affirmed the ruling of the trial court dismissing the borrower’s complaint with prejudice, and denying his motion for leave to file an amended complaint as futile. A copy of the opinion in Rife v. One West…