The U.S. Court of Appeals for the Eighth Circuit recently reversed the dismissal of a borrower’s lawsuit against his mortgagee for failing to restore his title after a non-judicial foreclosure and subsequent execution of a loan modification agreement, holding that the borrower’s claims were not time-barred and accrued only when he tried to sell the home more than five years after the modification agreement. A copy of the opinion in White v. CitiMortgage, Inc. is available at: Link to Opinion. A borrower refinanced his home mortgage loan in 2003, and defaulted in 2008. The loan servicer gave the borrower notice and…
The U.S. Court of Appeals for the Second Circuit recently joined the Seventh Circuit in holding that printing a credit card expiration date on an otherwise properly redacted receipt does not constitute an injury in fact sufficient to establish Article III standing to bring a claim alleging a bare procedural violation of the federal Fair and Accurate Credit Transactions Act of 2003 (FACTA). Accordingly, the Second Circuit affirmed the ruling of the trial court dismissing the plaintiff’s amended complaint. A copy of the opinion in Crupar-Weinmann v. Paris Baguette America, Inc. is available at: Link to Opinion. The plaintiff brought…
The U.S. Court of Appeals for the Ninth Circuit recently held that for cram-down valuations, 11 U.S.C. § 506(a)(1) requires the use of “replacement value” based upon the adoption of the replacement value standard in Associates Commercial Corp. v. Rash, 520 U.S. 953, 956 (1997). In so ruling, the Ninth Circuit interpreted Rash to instruct that valuation of collateral in a cram down must be based on the debtor’s desires (i.e., the proposed use of the collateral in the debtor’s plan of reorganization), and without consideration of the value that the secured creditor would realize in an immediate sale. Accordingly,…
The Bankruptcy Appellate Panel of the U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of an adversary proceeding without leave to amend, holding that: (a) the debtors failed to state a claim for wrongful foreclosure under California law; (b) the debtors failed to state a claim for breach of contract or breach of the implied covenant of good faith and fair dealing because they were not third-party beneficiaries of the pooling and servicing agreement; (c) the debtors failed to state a claim for breach of the deed of trust or breach of the implied covenant of…
The U.S. Court of Appeals for the Tenth Circuit recently held that a borrowers’ federal court claim attempting to void a foreclosure sale based on a prior demand to cancel the loan under the federal Truth in Lending Act (TILA) was barred by claim preclusion for failure to raise the issue in a prior state court action. A copy of the opinion in Pohl v. US Bank is available at: Link to Opinion. The plaintiff borrowers refinanced the loan on their home in May 2007. In 2009, the borrowers defaulted on their loan. In March 2010, believing that their lender had…
The U.S. District Court for the Middle District of Florida recently granted a mortgage servicer’s motion to dismiss a borrower’s claim that the servicer violated the federal Real Estate Settlement Procedures Act (RESPA) by allegedly failing to respond in a timely or adequate manner to a written Request for Information (“RFI”). In so ruling, the Court held that the servicer’s conduct did not cause the claimed actual damages incurred in preparing and sending the letters to the servicer, as required by RESPA at 12 U.S.C. § 2605(f). The Court also referenced the Supreme Court of the United States’s ruling in…
The Court of Special Appeals of Maryland, the intermediate appellate court in that state, recently held that a party who authorizes a foreclosure trustee to initiate a foreclosure action on a deed of trust must be licensed as a collection agency in the state before filing the foreclosure lawsuit, and that this licensing requirement applies to trusts formed outside of the State of Maryland. A copy of the opinion in Blackstone v. Sharma is available at: Link to Opinion. A statutory trust formed in Delaware filed two foreclosure lawsuits against homeowners in Maryland through a substitute trustee. The trust through…
The U.S. Court of Appeals for the Second Circuit recently concluded that a consumer’s consent to receive manual or automated telephone calls is irrevocable under the Telephone Consumer Protection Act (TCPA) when the consent was included in a binding contract. The Second Circuit described the issue as one not previously addressed by the Federal Communications Commission (FCC) or any court of appeal – i.e., “whether the TCPA also permits a consumer to unilaterally revoke his or her consent to be contacted by telephone when that consent is given, not gratuitously, but as bargained-for consideration in a bilateral contract.” The Court held that consent…
In a bankruptcy preferential transfer dispute, the U.S. Court of Appeals for the Eighth Circuit recently held that the bankruptcy trustee could recover true overdraft covering deposits, while deposits covering intra-day overdrafts were not recoverable. A copy of the opinion in Joseph Sarachek v. Luana Savings Bank is available at: Link to Opinion. A company filed for bankruptcy and, 90 days before filing, wired funds to its bank to cover overdrafts. The bankruptcy trustee argued that those funds were avoidable transfers that could be recovered from the bank. The bankruptcy court agreed as to some of the deposits but not others. The…
The U.S. Bankruptcy Court for the Southern District of Florida recently held that a bankruptcy debtor’s Chapter 11 proceeding should not be dismissed as filed in bad faith to delay or avoid foreclosure, but could not confirm the debtor’s proposed plan to lease its commercial property asset to a business that generates income from medical marijuana. A copy of the opinion in In re Arm Ventures, LLC is available at: Link to Opinion. A limited liability company (“debtor”) owned 48.8 percent of a commercial property in Miami Beach, Florida (the “commercial property”) that was secured by a mortgage held by…
The U.S. Court of Appeals for the Seventh Circuit recently concluded that a consumer’s consent to receive promotional information from a retailer is sufficient consent under the federal Telephone Consumer Protection Act (TCPA) to receive other mass marketing texts. The primary issue the Seventh Circuit addressed was the scope of the consent the consumer provided when she gave her cell phone number to the retailer. The consumer argued that she only provided her cell phone number to receive special discount offers, and did not consent to “mass marketing” text messages. The Seventh Circuit rejected the argument, and determined that the…
The Appellate Court of Illinois, First District, recently ruled that the mortgagee of a reverse mortgage loan held an interest in the secured property to the extent that the borrower inherited an interest in the property following the non-borrower’s spouse’s intestate death. Accordingly, the Court reversed the trial court’s dismissal of the reverse mortgagee’s foreclosure complaint and remanded the matter for further determination of the borrower’s inherited interest in the subject property. A copy of the opinion in Reverse Mortgage Solutions, Inc. v. Rahman is available at: Link to Opinion. The borrower and his spouse purchased the subject property as…