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Posts tagged as “First Circuit”

1st Cir. Upholds Dismissal of Mass. 93A Claims Against Mortgagee and Servicer As Time-Barred

The U.S. Court of Appeals for the First Circuit recently affirmed the trial court’s dismissal of a consumer’s claims against the owner and loan servicer of her mortgage loan that their collection statements supposedly violated the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A, and the Massachusetts Fair Debt Collection Practices Act, Mass. Gen. Laws ch. 93, 49.

1st Cir. Holds Fannie Mae Not Liable for Unauthorized Acts of Its Agents

The U.S. Court of Appeals for the First Circuit, on an issue of first impression at the federal appellate level, recently held that the Merrill doctrine – which prevents federal government instrumentalities from being bound by the unauthorized acts of their agents – applies to Federal National Mortgage Association (“Fannie Mae”). Accordingly, the First Circuit affirmed the trial court’s entry of summary judgment in favor of Fannie Mae. A copy of the opinion in Faiella v. Federal National Mortgage Association is available at:  Link to Opinion. The plaintiff borrower took out a loan secured by a mortgage on his home.  The lender…

1st Cir. Upholds Use of ‘Integrated Records’ from Prior Servicer

The U.S. Court of Appeals for the First Circuit recently affirmed a mortgage foreclosure judgment, holding that the district court properly admitted into evidence a computer printout from the loan servicer containing incorporated information from prior loan servicers. A copy of the opinion in U.S. Bank Trust, N.A. v. Jones is available at:  Link to Opinion. The plaintiff borrower defaulted on her mortgage loan and the bank filed a diversity action in the U.S. District Court for the District of Maine. “At trial, [the bank] sought to establish the total amount owed on the loan account by introducing a computer…

1st Cir. Rejects Challenges to Arbitration of Putative Class Action

The U.S. Court of Appeals for the First Circuit recently affirmed dismissal of a putative class action lawsuit that challenged the company’s arbitration clause. The Court rejected the named plaintiff’s primary argument that the arbitration clause’s arbitration-fee-splitting arrangement was unconscionable and unenforceable, because the trial court was allowed to consider the defendant’s offer to pay for the full costs of arbitration, thus rendering the clause enforceable under Massachusetts’ Wage Act, because the potential costs of arbitration were less than the cost of potential recovery. A copy of the opinion in Bekele v. Lyft, Inc. is available at:  Link to Opinion. In…

1st Cir. Holds Reference to ‘Auction Price’ Rather Than ‘Fair Market Value’ Insufficient for Deficiency Notice

The U.S. Court of Appeals for the First Circuit recently held that, at least under the Massachusetts version of the UCC, automobile post-repossession and post-sale notices must expressly advise the borrower that any deficiency will be calculated using the difference between the amount owed on the loan and the fair market value of the vehicle instead of the difference between the amount owed on the loan and the auction sale price. In so ruling, the Court held that the defendant’s compliance with the safe-harbor provision contained in the Massachusetts UCC that uses the auction sale proceeds to measure any deficiency…

1st Cir. Holds Mass. Predatory Home Loan Practices Act Claim Barred by 5-Year SOL

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…

1st Cir. Rejects Borrower’s Loan Modification Fraud Allegations as Untimely

The U.S. Court of Appeals for the First Circuit recently held that a borrower cannot invoke the discovery rule to assert an otherwise untimely Massachusetts UDAAP claim (Chapter 93A) relating to a loan modification agreement, because the alleged harm was not “inherently unknowable” at the time of its occurrence. In so ruling, the Court determined that the borrower knew he was required to make monthly payments when he signed the loan modification agreement.  Therefore, the statute of limitations began to run when the borrower stopped making payments, not when the creditor provided notice of the default. A copy of the opinion…

1st Cir. Rejects Borrowers’ Attempt to Void Loan Using Massachusetts’s ‘Obsolete Mortgage’ Statute

The U.S. Court of Appeals for the First Circuit recently affirmed the dismissal of a lawsuit by borrowers seeking to enjoin a mortgage foreclosure sale, holding that (a) the original lender’s nominee, MERS, could validly assign the mortgage without holding beneficial title to the underlying property and that borrowers do not have standing to challenge a mortgage assignment based on an alleged violation of a trust’s pooling and servicing agreement; and (b) the mortgage was not void under Massachusetts’s “obsolete mortgage” statute, under which a mortgage becomes obsolete and is automatically discharged five years after the expiration of the stated…