In an unpublished ruling, the U.S. Court of Appeals for the Eleventh Circuit recently affirmed dismissal of a borrower’s putative class action suit filed against a mortgagee alleging violations of the Fair Credit Reporting Act for failing to conduct a reasonable investigation into disputed information reported to the credit reporting agencies. In so ruling, the Court concluded that the borrower failed to demonstrate that a reasonable investigation would have uncovered an inaccuracy in certain information provided by the mortgagee to the credit reporting agencies, and the mortgagee had no duty to investigate a separate dispute because the borrower did not…
Posts tagged as “Mortgage Law”
The Supreme Court of Texas held that the contractual waiver of the statute of limitations on deficiency claims contained in a guaranty agreement was sufficiently “specific and for a reasonable time” as to be enforceable and not void as against public policy. Accordingly, the Texas Supreme Court affirmed the ruling of the appellate court, although it disagreed with portions of the appellate court’s reasoning. A copy of the opinion in Godoy v. Wells Fargo Bank, NA is available at: Link to Opinion. The lender extended a loan to the borrower, which loan was secured by property owned by the borrower. A guarantor…
The Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Sixth Circuit recently affirmed a lower bankruptcy court’s ruling that a refinanced mortgage was enforceable as to the interests of both husband and wife, where the wife did not execute the note and was not defined as a “borrower” in the body of the mortgage, but nonetheless initialed and signed the mortgage document as a “borrower” in the signature block. In so ruling, the Sixth Circuit BAP considered the Ohio Supreme Court’s answers to two certified questions stating that failing to identify a signatory by name in the…
The Court of Appeal for the Fifth District of California recently held that a court may award attorneys’ fees pursuant to Civil Code § 2924.12(h) when a borrower obtains a temporary restraining order to stop a non-judicial foreclosure sale. A copy of the opinion in Hardie v. Nationstar Mortgage LLC is available at: Link to Opinion. The borrowers filed an ex parte application for a temporary restraining order (“TRO”) to enjoin the trustee’s sale of their home. The application contained a request for attorneys’ fees and costs. The trial court granted the TRO and set a hearing to show cause for a…
The U.S. Court of Appeals for the Sixth Circuit held that a recent change to Ohio law involving notice of a defective lien had no bearing on a bankruptcy trustee’s ability to avoid the defective lien because such notice is irrelevant to a trustee’s status as a judicial lien creditor. Accordingly, the Sixth Circuit affirmed the Bankruptcy Appellate Panel’s upholding of the bankruptcy court’s denial of the mortgagee’s motion for judgment on the pleadings. A copy of the opinion in Donald Harker v. PNC Mortg. Co. is available at: Link to Opinion. The borrowers filed a chapter 7 bankruptcy petition that included…
The U.S. Court of Appeals for the Fifth Circuit recently held that Texas law contains no detrimental reliance exception to a lender’s unilateral right to withdraw an acceleration notice. A copy of the opinion in Jatera Corporation v. U.S. Bank National Association is available at: Link to Opinion. A borrower defaulted on a Texas home equity fixed adjustable rate note secured by a Texas home equity security instrument. In 2010, the mortgagee through its then loan servicer sent the borrower notice of its intent to accelerate the note and demanded full payment of the debt. The mortgagee filed suit and…
The U.S. Court of Appeals for the Seventh Circuit recently held that a mortgagee could unilaterally cancel an erroneously recorded satisfaction of the loan where the borrower had not yet detrimentally relied on the erroneous satisfaction. A copy of the opinion in Trinity 83 Development, LLC v. ColFin Midwest Funding, LLC is available at: Link to Opinion. A company took out a loan from a bank secured by a mortgage. The bank sold the loan to a debt buyer. The debt buyer used a debt collector to collect payments. The debt collector inadvertently recorded a satisfaction of the debt releasing the mortgage before the…
The Appellate Court of Illinois, First District, recently held that a borrower’s general denial that the mortgagee performed the conditions precedent of the mortgage contract prior to filing a foreclosure action was insufficient under Illinois Supreme Court Rules and therefore constituted a forfeiture of the issue. Accordingly, the Appellate Court affirmed the ruling of the trial court granting summary judgment in favor of the mortgagee. A copy of the opinion in The Bank of New York Mellon v. Wojcik is available at: Link to Opinion. After the borrower defaulted on her mortgage loan, the bank sent her a letter titled “Notice…
The U.S. Court of Appeals for the Seventh Circuit recently held that a mortgagee’s failure to take a deficiency judgment against a borrower who filed bankruptcy in a concluded state foreclosure action precluded the mortgagee from making a deficiency claim in the borrower’s bankruptcy proceeding. A copy of the opinion in BMO Harris Bank N.A. v. Anderson is available at: Link to Opinion. Two borrowers received a loan secured by a mortgage. They defaulted on the loan and the mortgagee filed a two-count complaint in Illinois state court seeking relief under the mortgage and the note. One of the borrowers and his wife later filed…
The U.S. Court of Appeals for the Eighth Circuit recently held that a borrower’s claims concerning lender-placed insurance practices were barred by res judicata, because the alleged practices were the subject of a class action suit in which the borrower was a class member who was provided notice of the settlement and did not object to the settlement. However, the Eighth Circuit also concluded that the servicer failed to establish that the statute of frauds barred the borrower’s claims concerning an alleged contract for interest rate reduction. A copy of the opinion in Calon v. Bank of America, NA is…
In a mortgage loan repurchase action, the U.S. Court of Appeals for the Eighth Circuit recently reversed a trial court’s order granting summary judgment in favor of an originator and seller of loans, and held that the mortgage loan purchaser adequately and substantially complied with the contract in its demands that the originator repurchase several allegedly defective loans. In so ruling, the Eighth Circuit determined that the trial court erred in determining that the purchaser’s notice letters failed to satisfy a condition precedent to prescribe a time for the originator to correct the alleged defects, as the agreement governing the…
The Court of Appeal for the Second District of California held that California’s fee shifting statue in California Civil Code § 1717 permitted a former loan servicer and foreclosure trustee to recover their attorneys’ fees authorized by the contract, even though the deed of trust was assigned to another financial institution. However, the Court vacated the trial court’s award of attorneys’ fees against the borrower because the deed of trust only permitted attorneys’ fees to be added to the loan balance. A copy of the opinion in Chacker v. JPMorgan Chase Bank, N.A. is available at: Link to Opinion. The borrower…