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…
Two years ago, in Simon v. FIA Card Services, N.A., the Third Circuit held that alleged violations of the FDCPA resulting from conduct in a bankruptcy case were not precluded by the Bankruptcy Code. At issue was whether the defendants engaged in false, misleading or deceptive conduct in connection with their service of a subpoena for a Rule 2004 examination. The certification of service on the subpoenas indicated service both directly on the plaintiffs and on their attorney whereas they were actually only served on the attorney. In addition, the location provided for the examination was improper under the bankruptcy…
In response to a letter from numerous Senators, and in response to “considerable input” from other members of Congress and various trade groups, the Consumer Financial Protection Bureau today announced that it will employ leniency in relation to implementation of the TILA-RESPA Integrated Disclosure Rule. The CFPB’s letter states that the CFPB “will be sensitive to the progress made by those entities that have squarely focused on making good-faith efforts to come into compliance with the Rule on time,” and that the approach “is consistent with the approach we took to implementation of the Title XN mortgage rules in the early months…
FCC Chairman Tom Wheeler’s TCPA “Fact Sheet” on forthcoming declaratory rulings issues should scare the heck out of any business using any telephone to reach potential, current or former customers. I believe the rulings will have a substantial impact on customer operations in the financial services industry. I expect the Declaratory Rulings to touch a number of crucial issues driving TCPA litigation. So I’ve assembled a team of seasoned TCPA litigators to talk with you on Monday, June 22 June 29, on how these declaratory rulings will affect the risks of using telephone technology. Here are the hot issues I expect the ruling to…
The FTC and the Office of the New York State Attorney General will host a “Debt Collection Dialogue,” aimed to be a conversation between government and business regarding consumer protection issues within the debt collection industry, in Buffalo, NY, on June 15. FTC Bureau of Consumer Protection Director Jessica Rich and New York State Attorney General Eric Schneiderman will deliver opening remarks. The afternoon program will be held at SUNY Buffalo State and will include a break and a Q&A period. Topics for discussion include recent enforcement actions, compliance issues, and consumer complaints regarding debt collection practices. The event will be the first…
The U.S. Supreme Court recently held that a debtor in a Chapter 7 case cannot “strip-off” or void a wholly unsecured junior mortgage under section 506(d) of the Bankruptcy Code. A copy of the opinion is available at: Link to Opinion. The debtors in the consolidated cases both had two mortgages on their homes. The petitioner held a second-position mortgage on each of the homes. The senior mortgage on each home exceeded its fair market value, meaning that the junior mortgages were entirely unsecured and “underwater.” Each debtor moved to “strip-off” or void the junior mortgage liens pursuant to section 506(d)…
The Florida Second District Court of Appeal recently reversed a trial court’s dismissal of a mortgage foreclosure action because the plaintiff bank was the proper party to sue and proved that it had standing. In so ruling, the Second DCA applied its prior ruling allowing “incorporation” or “adoption” of a prior servicer’s records, which essentially allows a subsequent servicer to use a prior servicer’s records if the subsequent servicer verified the prior servicer’s records before using them as its own. A copy of the opinion is available at: Link to Opinion The borrowers obtained their mortgage loan in 2006. Attached…