The U.S. Bankruptcy Court for the Southern District of Florida recently denied a creditor’s motion to compel the debtor to surrender mortgaged property and also denied the debtor’s motion to stay the case, holding that a chapter 7 debtor who indicates surrender of real property in his statement of intention is not obligated to surrender that property to the lienholder, whether or not the property is administered by the chapter 7 trustee. Disagreeing with other judges in the same district and elsewhere on this issue, the bankruptcy judge held that “[c]ompulsory surrender of real property collateral by a debtor to…
Posts tagged as “Foreclosure”
The Supreme Court of Michigan recently held that the full credit bid rule did not bar contract claims brought by a mortgagee against non-borrower third parties. The Michigan Supreme Court also held that the closing instructions at issue constituted a contract upon which a breach of contract claim could be brought. A copy of the opinion in Bank of America, NA v. First American Title Insurance Co. is available at: Link to Opinion. The plaintiff lender partially financed four properties and shortly after closing, all four borrowers defaulted. The lender foreclosed by advertisement and subsequently bought all four properties at sheriff’s…
The Appellate Court of Illinois, First District, recently held that the form foreclosure complaint provided by the Illinois Mortgage Foreclosure Law (IMFL) complies with procedural due process guarantees of the Fifth and Fourteenth Amendments of the United States Constitution, and does not violate the Illinois Constitution’s separation of powers doctrine by usurping the Illinois judiciary’s rulemaking power. A copy of the opinion in Wells Fargo Bank N.A. v. Bednarz is available at: Link to Opinion. A mortgagee foreclosed on the defendant borrower’s residential property. The mortgagee’s complaint tracked a form complaint set forth in section 1504(a) of the IMFL. Section 15-1504(c)…
The U.S. Court of Appeals for the Sixth Circuit recently held that two borrowers lacked standing to challenge the validity of a deed of trust in a lien priority dispute interpleader action filed by the foreclosure trustee, as the borrowers did not dispute that they executed the deed of trust, the lien placed on the property was valid, or that they were in default. In so ruling, the Court rejected the borrowers’ argument that an alleged defect in the acknowledgement invalidated the deed of trust, because a validly recorded instrument that was not properly acknowledged shall nevertheless place “all interested…
The District Court of Appeal of Florida, Fourth District, recently upheld a trial court’s ruling that a plaintiff mortgage loan servicer had authority to initiate foreclosure proceedings against borrowers on a mortgage loan evidenced by an electronic note. The Fourth DCA also held that the e-note was a transferable record under the Uniform Electronic Transactions Act. A copy of the opinion in Rivera v. Wells Fargo Bank, NA is available at: Link to Opinion. In April 2008, the borrowers executed an electronic note (“e-note”) in favor of the lender, evidencing a loan secured by a mortgage. In January 2010, the servicer…
The Court of Appeal of the State of California, First Appellate District, recently upheld a trial court’s demurrer without leave to amend in a case in which a judicially noticed Purchase and Assumption Agreement (“P&A Agreement”) contradicted the borrower’s allegations that a subsequent purchaser of the loan had no authority to foreclose on her property. A copy of the opinion in Brown v. Deutsche Bank National Trust Company as Trustee for WAMU Mortgage Pass-Through Certificates Series et al. can be found at: Link to Opinion. In 2004, a borrower obtained a $450,000 loan secured by a deed of trust recorded against…
The U.S. Court of Appeals for the Fifth Circuit recently affirmed the dismissal of a borrower’s claims against her lender arising out of a foreclosure, holding among other things that alleged discrepancies as to the lender’s automatic payment withdrawal services did not state a claim under the Texas Deceptive Trade Practices Act (DTPA). In so ruling, the Court also affirmed the denial of a plaintiff borrower’s motion to join a non-diverse defendant holding that the motion was improperly brought for the purpose of defeating diversity jurisdiction. A copy of the opinion in Villarreal v. Wells Fargo Bank, NA is available at:…
The U.S. Court of Appeals for the Seventh Circuit recently held that a mortgagor is not a third-party beneficiary under a pooling and servicing agreement under New York law, and therefore lacks standing to challenge purported violations of assignments under the agreement. A copy of the opinion in In re Jepson is available at: Link to Opinion. A borrower executed a note for a loan secured by a mortgage. The note was indorsed by the lender in blank and transferred to a residential mortgage-backed securities trust formed and governed by a pooling and servicing agreement (“PSA”). The trust’s trustee held the…
The District Court of Appeal of Florida, Fifth District, recently held that the trial court erred in ruling that a mortgagee failed to comply with the pre-foreclosure notice requirements of the mortgage, as the mortgagee’s default notice substantially complied with the mortgage and did not prejudice the borrower. The Court also held that testimony by the current loan servicer’s employee with regard to a prior loan servicer’s business records established sufficient foundation for the prior servicer’s records to be admitted into evidence as business records under Florida law. A copy of the opinion in The Bank of New York Mellon v.…
The Illinois Appellate Court, First District, recently affirmed a trial court’s denial of a borrower’s motion to vacate a default judgment of foreclosure and sale, rejecting the borrower’s argument that the mortgagee failed to comply with certain Home Affordable Modification Program (HAMP) guidelines. A copy of the opinion in Wells Fargo Bank, N.A. v. Hansen is available at: Link to Opinion. In January 2007, the borrower executed a mortgage in the amount of $360,000, which was later assigned to the mortgagee. In December 2008, the mortgage filed a complaint seeking to foreclose due to default beginning in August 2008. The mortgagee…
The U.S. Court of Appeals for the Fifth Circuit recently held that a mortgagee did not waive or abandon its right to foreclose by accepting payments after a default by the borrower, but before acceleration, when no representations were made to the borrower that payments less than the full obligation would bring the loan current. A copy of the opinion in Martin v. Federal National Mortgage Association is available at: Link to Opinion. A borrower obtained a loan secured by a deed of trust (“DOT”). The DOT obligated the borrower to make monthly payments and gave the mortgagee the right to accelerate…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed the dismissal of a mortgage foreclosure action, holding that the mortgagee was deprived of due process because the dismissal was entered sua sponte and without notice or opportunity to be heard, and because correction of an erroneous legal description did not require dismissal of the entire case. A copy of the opinion in Federal National Mortgage Association v. Astrid Sanchez, Botanica/Sea Plum Master Association, Inc., Sandpiper Cove at Botanica Condominium Association, Inc., and Carlos Navas is available at: Link to Opinion. A homeowner defaulted and the…