The U.S. Court of Appeals for the Eleventh Circuit recently held that, under the federal Real Estate Settlement Procedures Act, a mortgage loan servicer had no duty to evaluate a borrowers’ loss mitigation application submitted two days before the foreclosure sale, even though the sale was continued, affirming the district court’s grant of summary judgment in the servicer’s favor. The Court also held that the borrowers had to present evidence that they suffered actual damages or were entitled to statutory damages in support of their claim based on the servicer’s supposedly inadequate response to their “notice of error” under RESPA…
Posts tagged as “Foreclosure”
The U.S. Court of Appeals for the Eleventh Circuit recently held that the word “surrender” in the Bankruptcy Code, 11 U.S.C. § 521(a)(2), requires that debtors relinquish all of their rights to the collateral. In so ruling, the Court ordered the borrowers to “surrender” their house to the mortgagee in a foreclosure action, and held that the bankruptcy court had the authority to compel the borrowers to fulfill their mandatory duty under 11 U.S.C. § 521(a)(2) not to oppose a foreclosure action in state court. A copy of the opinion in David Failla, et al v. Citibank, N.A. is available at: …
The Court of Appeal of the State of California, Second District, recently affirmed the denial of injunctive relief to a borrower who claimed a violation of Cal. Civ. Code § 2924(a)(6) of the California Homeowner Bill of Rights, holding that injunctive relief is only available under two specific HBOR provisions where the state legislature explicitly authorized such relief – i.e., Cal. Civ. Code §§ 2924.12(a)(1) and 2924.19(a)(1). Because the borrower’s allegations did not fall under either of those sections, the Court held that the borrower was not entitled to injunctive relief. A copy of the opinion in Lucioni v. Bank of…
The Appellate Court of Illinois, Third District, recently held that a mortgagee could foreclose on a husband and wife’s property held as tenants by the entirety despite that only the husband signed the note. In reaching its decision, the Court relied on the fact that the wife signed the mortgage with her husband, and was aware of the existence and the substance of the note. A copy of the opinion in OneWest Bank FSB v. Cielak is available at: Link to Opinion. The borrowers, husband and wife, purchased a home in Illinois. The borrowers acquired the real estate as tenants by…
The District Court of Appeal of Florida, Fourth District, recently held that real property liens arising after a final judgment of foreclosure are not discharged by Florida’s lis pendens statute. A copy of the opinion in Ober v. Town of Lauderdale-by-the-Sea is available at: Link to Opinion. A mortgagee recorded a lis pendens on real property as part of a foreclosure proceeding against a homeowner. Subsequently, the mortgagee obtained a final judgment of foreclosure. However, the foreclosure sale was not conducted for some four years following entry of the judgment of foreclosure. After the foreclosure, and before the foreclosure sale occurred, the…
The U.S. Court of Appeals for the Ninth Circuit recently held that the Nevada homeowners association foreclosure statute facially violated mortgage lenders’ constitutional due process right, and that the Nevada legislature’s enactment of a statute governing foreclosure of liens by HOAs constituted “state action.” A copy of the opinion in Bourne Valley Court Trust v. Wells Fargo Bank, N.A. is available at: Link to Opinion. A purchaser of Nevada real estate who acquired title at a homeowners association foreclosure sale brought an action in Nevada state court seeking to quiet title and a declaration against the mortgage lender, as holder of…
The Bankruptcy Appellate Panel of the Sixth Circuit recently held that a condominium unit owners association did not violate a debtor’s Chapter 7 discharge order by scheduling a sheriff’s sale to complete a prepetition foreclosure. Rejecting the bankruptcy court’s conclusion that the in rem foreclosure sale was scheduled to induce payment of discharged pre-petition condominium fees, the Sixth Circuit BAP noted that “all foreclosure litigation potentially can induce payments of discharged debt to avoid a foreclosure sale.” Accordingly, the Sixth Circuit BAP held that the foreclosure was not a disguised in personam collection effort, and that the denial of foreclosure…
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…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed summary judgment in favor of a mortgagee, holding that a genuine issue of material fact as to whether the original plaintiff or the substituted successor in interest held the note when the complaint was filed precluded summary judgment, and thus that the borrower’s lack of standing defense was not refuted. A copy of the opinion in Craven-Lazarus v. Pennymac Holdings, LLC is available at: Link to Opinion. A mortgagee sued to foreclose its mortgage. The complaint alleged that it was “entitled to enforce the Note as a…
The Supreme Court of Ohio recently held that, when debt on promissory note secured by mortgage has been discharged in bankruptcy, the holder of the note may not pursue collection against the maker of note, but the mortgagee has standing to foreclose on the collateral property, and can use the amounts due on the note as evidence to establish that it may collect from the forced sale of the property. The Court also held that, regardless of whether the creditor can obtain a personal judgment on the note against the borrowers, the creditor must still prove that it is the…
The Court of Appeals of California, Fourth District, recently held that a homeowner who has been foreclosed on by one with no right to do so — by those allegations alone — sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure. Citing Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, the Appellate Court also held that, because the plaintiff properly alleged the foreclosure was void and not merely voidable, tender was not required to state a cause of action for quiet title or for cancellation of instruments. A copy of the opinion in Sciarratta v.…
As an example of the conflicting and contrasting court rulings on the effect of surrender in bankruptcy (see our prior update), the District Court of Appeal of the State of Florida, Fifth District, recently dismissed a borrower’s appeal from a final judgment of foreclosure because the borrower admitted during the course of his bankruptcy proceeding that he owed the mortgage debt and stated his intention to surrender the mortgaged property. A copy of the opinion in Rivera v. BAC Home Loans is available at: Link to Opinion. A mortgage loan borrower filed for bankruptcy relief while his appeal of a foreclosure…