The District Court of Appeal of the State of Florida, Fourth District, recently reversed an order imposing sanctions against a foreclosing mortgagee, holding that the trial court erred in granting the motion for sanctions because the plaintiff mortgagee had an objectively reasonable belief that a non-signing spouse was a properly named defendant in the case. A copy of the opinion in Trust Mortgage, LLC v. Dina Ferlanti, et al is available at: Link to Opinion. A mortgagee filed a foreclosure action against husband and wife borrowers. The note and mortgage reflected only the wife as the borrower, but the first page…
The U.S. Court of Appeals for the District of Columbia recently held that, under the federal Fair Debt Collection Practices Act (FDCPA), a collection letter from a law firm did not misrepresent any meaningful involvement by an attorney. Because the letter clearly stated that the law firm was acting as a debt collector, and that no attorney with the law firm had reviewed the debtor’s account, the D.C. Circuit held the letter was not deceptive as a matter of law. A copy of the opinion in Tawanda Jones v. David Dufek, Sr. is available at: Link to Opinion. A borrower owed…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed the dismissal of a mortgage foreclosure action, holding that the trial court “erred in using the doctrine of unclean hands to dismiss the bank’s foreclosure action.” A copy of the opinion in Wells Fargo Bank, N.A. v. Williamson is available at: Link to Opinion. The borrower defaulted on her mortgage and the mortgagee sued to foreclose. The borrower raised several defenses, including that “the original lender committed fraud and used unclean hands in securing the loan.” Specifically, the borrower alleged that “the original lender’s loan consultant falsified…
The Supreme Judicial Court of Massachusetts recently held that a homeowners association may establish and enforce multiple contemporaneous liens for unpaid common expenses, each with a six-month period of priority over the first mortgage, by filing successive legal actions. A copy of the opinion in Drummer Boy Homes Association, Inc. v. Britton is available at: Link to Opinion. The borrowers purchased a condominium unit, and later began withholding payment of their monthly common expense assessments because of a dispute concerning parking rules and related fines. The condominium association commenced an action to recover the unpaid common expenses and to enforce a…
The U.S. Court of Appeals for the Tenth Circuit recently held that, under Utah law, only the actual levy of a municipal tax assessment on the property constitutes a defect in, or a lien or encumbrance on, title to the insured property. Because the levy of assessment at issue occurred after the title policy was issued, the Tenth Circuit held that the title insurance policy did not cover a loss incurred when a municipality foreclosed on the insured property. A copy of the opinion in BV Jordanelle, LLC v. Old Republic National Title Insurance Company is available at: Link to Opinion. In…
The U.S. District Court for the District of Nevada recently confirmed that a homeowner association’s foreclosure of its superpriority lien cannot extinguish a property interest of Fannie Mae or Freddie Mac while those entities are under the Federal Housing Finance Agency’s (FHFA) conservatorship. In so ruling, the Court also denied class certification, holding that the issue of whether Fannie Mae or Freddie Mac held an interest in the property at issue at the time of a homeowner association foreclosure sale presents an impermissible individualized factual inquiry that would require “mini-trials” as to each affected property. A copy of the opinion…
Today the Consumer Financial Protection Bureau released an outline of its proposals for rules under the federal Fair Debt Collection Practices Act. The FDCPA regulates the practices of debt collectors, primarily persons who collect consumer debt on behalf of others and sometimes persons who purchase defaulted consumer debts. The CFPB’s outline displays its intention to issue rules not only covering these third-party debt collectors and debt purchasers, but also to regulate the debt collection activities of original creditors themselves under the Bureau’s authority from the Dodd-Frank Act to issue regulations prohibiting unfair, deceptive, and abusive acts and practices. The outline…
In response to a request from the U.S. Court of Appeals for the First Circuit, the Supreme Judicial Court of Massachusetts recently held that a recorded attorney’s affidavit attesting to the proper acknowledgment of a recorded mortgage with a Certificate of Acknowledgment that omits the mortgagors’ names, in certain circumstances, may cure the defect in the Acknowledgment. The Court also held that a recorded attorney’s affidavit attesting to the proper acknowledgment of a recorded mortgage with a Certificate of Acknowledgment that omits the mortgagors’ names, in certain circumstances, may provide constructive notice of the existence of the mortgage to a…
July 26, 2016 — The Annual Consumer Financial Services Conference organized by The Conference on Consumer Finance Law will be held Sept. 15-16 at Loyola University Chicago School of Law. The early registration discount ends July 30. The conference will include presentations on the latest developments in consumer financial services law, including mortgage lending and servicing, bankruptcy and debt collection. Several Maurice Wutscher attorneys will speak at the conference. Donald Maurice will discuss attorney ethics and the Fair Debt Collection Practices Act and Eric Rosenkoetter will speak on state regulation of the debt buying industry. Conference attendees will also hear…
Distinguishing its prior ruling in U.S. Bank National Ass’n v. Quadomain Condominium Ass’n, the District Court of Appeal of the State of Florida, Fourth District, recently held that a foreclosure of a homeowners association’s lien against the property owner filed after the recording of a lis pendens by a first mortgagee is not barred, where the association’s subordinate lien was imposed under the association’s declaration of covenants recorded before the first mortgagee recorded its lis pendens. In so ruling, the Court confirmed that the homeowners association’s foreclosure action is inferior to the foreclosure of the first mortgage. A copy of…
The Court of Appeal of the State of California, Sixth Appellate District, recently held that a loan owner may be liable for misrepresentations made by the loan servicer. The Court also held that a loan servicer may owe a duty of care to a borrower through application of the “Biakanja” factors, even though its involvement in the loan does not exceed its conventional role. A copy of the opinion in Daniels v. Select Portfolio Servicing, Inc. is available at: Link to Opinion. In May 2005, the borrowers obtained an adjustable rate mortgage. In early 2008, the borrowers asked their servicer to…
In an unpublished opinion, the U.S. Court of Appeals for the Eleventh Circuit recently held that a consumer alleging that she did not receive disclosures required by the federal Fair Debt Collections Practices Act (FDCPA) sufficiently alleged that she suffered a concrete injury, and thus satisfied the standing doctrine’s injury-in-fact requirement under Article III of the U.S. Constitution. In so ruling, the Court confirmed that the FDCPA only applies to debts that are in default when the debt collector obtained them, rejecting the consumer’s argument that “a debt can be in default before the debtor is ever asked to pay…