Press "Enter" to skip to content

Posts tagged as “Mortgage Law”

11th Cir. Holds Post-Discharge Monthly Mortgage Statements Not Prohibited

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a mortgage loan borrower’s federal Fair Debt Collection Practices Act and related state law claims because the defendant mortgagee was not a “debt collector” as defined by the FDCPA. In so ruling, the Court also rejected the borrower’s allegations that the monthly statements the mortgagee sent to the borrower after her bankruptcy discharge were impermissible implied assertions of a right to collect against her personally. A copy of the opinion in Helman v. Bank of America is available at: Link to Opinion. The borrower obtained a…

Illinois App. Court (3rd Dist) Upholds Dismissal of Qui Tam Action Against MERS

The Appellate Court of Illinois, Third District, recently affirmed a trial court’s dismissal of a qui tam action brought by a private attorney under the Illinois False Claims Act against Mortgage Electronic Registration Systems, Inc. (MERS), holding that the State can file a motion to dismiss at any time during the case even if the State declined to take over the action. A copy of the opinion in State ex rel. Saporta v. Mortgage Electronic Registration Systems, Inc. is available at:  Link to Opinion. The plaintiff, the State ex rel. by a private attorney (“Relator”), filed a qui tam action…

9th Cir. Holds Mortgagee’s ‘Sold Out Second’ Claim Not Barred by California’s 4-Year Statute of Limitations

The U.S. Court of Appeals for the Ninth Circuit recently reversed a ruling that disallowed an unsecured creditor’s claim filed in a California bankruptcy court based on the forum state’s statute of limitations. In so ruling, the Ninth Circuit held that, although courts typically apply the forum state’s statute of limitations if the contract is silent on the issue, exceptional circumstances warranted the application of a longer statute of limitations here, because the creditor had no option but to enforce its claim in the forum based on where the bankruptcy petition was filed. A copy of the opinion in PNC…

Illinois App. Court (2nd Dist) Holds Mortgagee Could Not Collect Deficiency from Rents Owed to Other Mortgagees

The Appellate Court of Illinois, Second District, recently held that a mortgagee with a foreclosure judgment could not collect on the deficiency against rents from other properties owned by the mortgagor, because the mortgagee’s foreclosure judgment was not superior to the prior recorded mortgages for the other properties which contained assignment-of-rent clauses, and the other mortgagees had executed forbearance agreements to enforce those assignment-of-rents clauses. A copy of the opinion in BMO Harris Bank N.A. v. Joe Contarino, Inc. is available at:  Link to Opinion. In 2013, a bank, acting as the assignee of the FDIC, foreclosed on four mortgages…

Indiana Supreme Court Rejects Borrowers’ Argument Bankruptcy Discharge Wiped Out Mortgage Loan, Lien

The Supreme Court of Indiana recently confirmed a mortgagee’s ability to seek an in rem judgment against property for which there was an outstanding lien balance after the borrowers obtained a discharge of their Chapter 7 bankruptcy. In so ruling, the Court distinguished the difference between an in rem and in personam judgment, and rejected the borrowers’ unsupported argument that the debt was paid in full by the time the mortgagee initiated foreclosure proceedings against the borrowers. A copy of the opinion in McCullough v. CitiMortgage, Inc. is available at:  Link to Opinion. The borrowers obtained a loan from the…

Fla. App. Court (2nd DCA) Indicates FHA ‘Face-to-Face’ Requirement Applies to ‘Mortgagee and Loan Servicer’

The District Court of Appeal of the State of Florida, Second District, recently reversed a summary judgment award in favor of the borrowers in a foreclosure action, finding a triable issue of material fact existed concerning whether the face-to-face counseling requirements of 24 C.F.R. § 203.604 applied, as the mortgagee did not submit evidence “as to whether the mortgagee and loan servicer had a branch office within 200 miles of the property during the time period before three full monthly installments due on the mortgage went unpaid.” A copy of the opinion in ARC HUD I, LLC v. Ebbert is…

5th Cir. Holds Section 8 Income Recipients Stated ECOA Claim Against Mortgage Lender, but Not Its Investor

The U.S. Court of Appeals for the Fifth Circuit recently held that a group of plaintiffs plausibly alleged claims for violations of the federal Equal Credit Opportunity Act by asserting that a mortgage lender refused to consider their Section 8 income in assessing their creditworthiness as mortgage applicants, and that they received mortgage loans on less favorable terms and in lesser amounts than they would have had their Section 8 income been considered. Additionally, the Fifth Circuit held that the ECOA does not encompass mortgage purchasers and investors who do not participate in the extension of mortgage loans, even when…

8th Cir. Upholds Class Settlement in ‘Excessive Property Inspection’ Case, Rejects Attempt to Add Trespass Claims

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a district court’s approval of a proposed class settlement in an action arising from a mortgage loan servicer’s practice of automatically ordering and charging for drive-by property inspections on delinquent borrowers, holding that the district court did not abuse its discretion. In so ruling, the Court also affirmed the trial court’s denial of a borrower’s motion to join a trespass claim to the putative class action. A copy of the opinion in Kenneth Njema v. Wells Fargo Bank, N.A. is available at:  Link to Opinion. In 2008, four borrowers…

4th Cir. Holds Escrow, Other Principal Residence Mortgage Loan Items Not Subject to Chapter 13 Bifurcation

The U.S. Court of Appeals for the Fourth Circuit recently held that “escrow funds, insurance proceeds, or miscellaneous proceeds” are protected by the anti-modification provisions for Chapter 13 bankruptcies as “incidental property” under the definition of “debtor’s principal residence” in the federal Bankruptcy Code. A copy of the opinion in In re Birmingham is available at:  Link to Opinion. A debtor filed a voluntary petition for Chapter 13 bankruptcy. One of the claims against the debtor was a mortgage loan secured by a deed of trust on the debtor’s primary residence.  When the debtor filed his original Chapter 13 bankruptcy…

1st Cir. Rejects Bankruptcy Trustee’s Effort to Avoid Mortgage Due to Allegedly Defective Acknowledgment

The U.S. Court of Appeals for the First Circuit recently rejected a bankruptcy trustee’s effort to avoid a mortgage on the basis that the acknowledgment signed by the borrowers’ attorney-in-fact was defective under Massachusetts law, holding that the acknowledgment was not materially defective because as a matter of agency law the attorney-in-fact’s signature was the borrowers’ “free act and deed.” A copy of the opinion in HSBC Bank USA, N.A. v. Lassman is available at:  Link to Opinion. The borrowers purchased a parcel of “registered land” in 1994 in North Attleboro, Mass. (the “subject property”). “Registered land” is real property…

Fla. App. Court (2nd DCA) Rejects Argument Mortgagee Thwarted Right of Redemption by Not Providing Estoppel Letter

The District Court of Appeal of Florida, Second District, recently rejected a borrower’s objection to a foreclosure sale under the theory the mortgagee failed to provide him with an “estoppel letter,” which would have allowed him to exercise his right of redemption. A copy of the opinion is available at:  Link to Opinion. A foreclosure judgement was entered and the property was sold via public sale.  Ten days later, the borrower objected to the sale of the property.  The objection was denied and a certificate of title was issued to the mortgagee. The borrower appealed, arguing that the trial court…

Fla. App. Court (2nd DCA) Holds Trial Court Erred in Denying Deficiency Judgment Due to 6-Day Stale Appraisal

The District Court of Appeal of Florida, Second District, recently reversed an order denying a claim for a post-foreclosure sale deficiency judgment, holding that the trial court abused its discretion by excluding from evidence an expert’s testimony and report as to fair market value because the report was dated six days after the foreclosure sale. A copy of the opinion is available at:  Link to Opinion. A final judgment of foreclosure in the amount of $2.4 million was entered against the borrower company and its principal.  A third party purchased the property at a foreclosure sale for $100.  The third…