The U.S. Court of Appeals for the Ninth Circuit recently held that mortgage underwriters were not exempt under the federal Fair Labor Standards Act (FLSA) and were therefore entitled to overtime compensation for hours worked in excess of 40 per week. After analyzing the specific details of the underwriters’ responsibilities, the Ninth Circuit panel concluded that, because the underwriters’ primary job duty did not relate to their employer bank’s management or general business operations, the administrative employee exemption to the FLSA’s overtime requirements did not apply. Recognizing that there was a split between the Second Circuit and Sixth Circuit as…
Posts tagged as “Mortgage Law”
The District Court of Appeal of the State of Florida, Fourth District, recently affirmed a final judgment in favor of a borrower because the foreclosing mortgagee failed to file the original allonge to the note, holding that as a result the mortgagee lacked standing to foreclose. A copy of the opinion in U.S. Bank National Assoc., etc. v. Jean Kachik is available at: Link to Opinion. A mortgagee sued to foreclose the mortgage, attaching copies of the promissory note and an “Endorsement and Assignment of Note” to the complaint. The endorsement was “blank.” At trial, the mortgagee offered the original note…
The Appellate Court of Illinois, First District, recently ruled that the mortgagee of a reverse mortgage loan held an interest in the secured property to the extent that the borrower inherited an interest in the property following the non-borrower’s spouse’s intestate death. Accordingly, the Court reversed the trial court’s dismissal of the reverse mortgagee’s foreclosure complaint and remanded the matter for further determination of the borrower’s inherited interest in the subject property. A copy of the opinion in Reverse Mortgage Solutions, Inc. v. Rahman is available at: Link to Opinion. The borrower and his spouse purchased the subject property as…
The U.S. Court of Appeals for the Sixth Circuit recently concluded that Michigan’s assignment of rents statute sufficiently deprived the assignor of the ownership of the rents such that the rents could not be included in the assignor’s bankruptcy estate. The primary issue before the Court was whether Michigan’s assignment of rents statute allowed the assignor to retain sufficient rights in the rents for the rents to be included in the assignor’s bankruptcy estate. The bankruptcy court determined that the debtor’s assignment of the rents gave the assignee a security interest in the rents but did not change the ownership,…
The U.S. Court of Appeals for the Ninth Circuit recently affirmed a trial court’s summary judgment ruling in favor of a bank and against the City of Los Angeles on the City’s claims that the bank violated section 3605(a) of the federal Fair Housing Act (FHA) through alleged discriminatory lending practices, and that the bank was unjustly enriched. A copy of the opinion in City of Los Angeles v. Wells Fargo & Co. is available at: Link to Opinion. As you may recall, section 3605(a) of the FHA makes it unlawful for financial institutions “to discriminate against any person in…
The U.S. Court of Appeals for the Ninth Circuit recently amended its opinion in Ho v. ReconTrust Co., maintaining and affirming its prior ruling that the trustee in a California non-judicial foreclosure did not qualify as a debt collector under the federal Fair Debt Collection Practices Act (FDCPA). The amendments to the prior ruling among other things add that a California mortgage foreclosure trustee meets the FDCPA’s exclusion from the term “debt collector” for entities whose activities are “incidental to … a bona fide escrow arrangement” at 15 U.S.C. § 1692a(6)(F). The Ninth Circuit also removed its prior discussion of…
The County Court of the Nineteenth Judicial Circuit in and for St. Lucie County, Florida recently dismissed a borrower’s amended complaint against a mortgage servicer alleging violations of the Florida Consumer Collection Practices Act (FCCPA) for sending mortgage statements to the borrower following involuntary dismissal, without prejudice, of a foreclosure action. In dismissing the action with prejudice, the Court held that the statements sent by the defendant mortgage servicer were not attempts to collect a debt, and therefore not actionable under the FCCPA. In addition, the Court held that the plaintiff borrower failed to state a cause of action because…
The Supreme Court of the United States recently held that a city qualifies as an “aggrieved person” under the federal Fair Housing Act, 42 U.S.C. § 3601 et seq., and thus that the plaintiff city in this action had standing to assert claims under the FHA against banks the city believed were engaging in unlawful discriminatory lending practices. According to the city, the unlawful lending practices caused, among other damages, a disproportionate number of foreclosures and vacancies in majority-minority neighborhoods, which impaired the city’s effort to assure racial integration, diminished the city’s property-tax revenue, and increased demand for police, fire,…
The U.S. Bankruptcy Court for the Middle District of Alabama recently held that a mortgage servicer did not violate the discharge injunction in 11 U.S.C. § 524 by sending the discharged borrowers monthly mortgage statements, delinquency notices, notices concerning hazard insurance, and a notice of intent to foreclose. Moreover, because the borrowers based their claims for violation of the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq., on the violation of the discharge injunction, the Court also dismissed their FDCPA claims with prejudice. A copy of the opinion in Golden et al v. Carrington Mortgage Services,…
The Court of Appeal of the State of California, Third Appellate District, recently held that a mortgage servicer violated California’s Homeowner Bill of Rights (HBOR), Civ. Code § 2923.6(d), when it sent a borrower a loan modification denial letter stating that the homeowner had only 15 days to appeal the denial. In so ruling, the Appellate Court held that the servicer’s denial letter was a material violation of section 2923.6, and therefore the homeowner alleged a valid cause of action for injunctive relief under section 2924.12. A copy of the opinion in Berman v. HSBC Bank USA, N.A is available…
The U.S. Court of Appeals for the Ninth Circuit recently affirmed the Bankruptcy Appellate Panel’s determination that a creditor’s pre-bankruptcy, non-recourse lien on two debtors’ real property is extinguished following a non-judicial foreclosure sale. A copy of the opinion in In re: Salamon is available at: Link to Opinion. In April 2009, two debtors purchased real property. Rather than fund the purchase price and pay off the two existing liens on the real property, the debtors executed a wrap-around mortgage in favor of the property seller. The debtors then funded the balance of the purchase price with a note secured…
The Appellate Court of Illinois, First District, recently held that an allonge was “affixed” to a note for purposes of the Illinois Uniform Commercial Code (UCC) when it was attached via paper clip. A copy of the opinion in Olive Portfolio Alpha, LLC v. 116 West Hubbard Street, LLC is available at: Link to Opinion. The plaintiff note owner (“assignee”) filed a mortgage foreclosure action against the defendant borrower seeking the foreclosure of a commercial property. The borrower filed a motion to dismiss for alleged lack of standing. The motion was denied in part and granted in part “as to…