Mealey's Mortgage Lending : Mealey's : Legal News & Analysis

Mealey's Mortgage Lending

December 07, 2023
Court Dismisses Mortgage Borrower’s Suit Against Lender For Modification Dispute

SACRAMENTO, Calif. — A California federal magistrate judge on Dec. 6 docketed an order granting a mortgage borrower’s request to voluntarily dismiss her lawsuit accusing a lender of violating California’s unfair competition law (UCL) and other laws by not contacting her for years after her loan went into default following a modification request, one day after the magistrate recommended dismissing her suit.
November 29, 2023
On Remand, Parties Dispute Expert Exclusion Bids In RESPA Class Lawsuit

FRESNO, Calif. — Parties in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements are sparring in California federal court over expert testimony regarding whether the plaintiffs have standing under an economic harm theory.
November 29, 2023
5th Circuit Dismisses Borrower’s Appeal Of Dismissal Of ECOA Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Nov. 28 dismissed a borrower’s appeal challenging the dismissal of his lawsuit alleging that a lender violated the Equal Credit Opportunity Act (ECOA) by denying him a mortgage loan based on an allegedly incomplete loan application, noting that the borrower failed to file his appellant brief on time.
November 27, 2023
Condo Owner Dismisses Suit Against Mortgage Servicer After Settling FDCPA Claims

MIAMI — The owner of a condominium unit on Nov. 24 filed a notice of voluntary dismissal with prejudice of its class action complaint alleging that a mortgage servicer violated the Fair Debt Collection Practices Act (FDCPA) and state laws by allegedly including excessive, unauthorized and fraudulent fees in a payoff quote, just days after the parties notified a federal court in Florida that they had reached a settlement in the case.
November 21, 2023
Judge Denies Reconsideration Of Order Dismissing Remaining Claims Against Lenders

ST. LOUIS — A federal judge in Missouri has denied a motion to reconsider his order dismissing with prejudice the remaining claims against two mortgage companies asserted by self-represented litigants who alleged that one of the companies used bait-and-switch tactics to entice them into a loan forbearance program, reiterating his findings that the Real Estate Settlement Procedures Act (RESPA) does not apply to the loan in question, that the Coronavirus Aid, Relief and Economic Security Act (CARES Act) does not include a private right of action and that the Missouri Merchandising Practices Act (MMPA) does not apply to one of the companies as it is regulated by the Missouri Division of Finance.
November 21, 2023
Couple Sufficiently Alleges Facts To Support RESPA, Unfair Practices Claims

RALEIGH, N.C. — A North Carolina federal judge denied motions to dismiss filed by a mortgage lender and a realty company after determining that a couple has standing to allege that the companies engaged in an unlawful kickback scheme in which the realty company would steer all of its clients to the mortgage company for their loans and sufficiently allege facts in support of their claims for unfair trade practices and civil conspiracy.
November 21, 2023
District Court Erred In Finding Credit Bureau Did Not Report Inaccuracy, Borrower Says

CHICAGO — A district court erred in entering summary judgment in favor of a credit reporting bureau in a Fair Credit Reporting Act (FCRA) suit because the credit bureau inaccurately reported late payments on a borrower’s mortgage, the borrower says in a reply brief filed in the Seventh Circuit U.S. Court of Appeals.
November 21, 2023
3rd Circuit: Mortgagors Failed To Show Failed Foreclosure Suit Violated Pa. Law

PHILADELPHIA — A failed foreclosure lawsuit by a lender and loan servicer did not violate Pennsylvania’s Dragonetti Act as there was no showing that the filing of the case was improper, a Third Circuit U.S. Court of Appeals panel ruled, affirming a trial court’s summary judgment ruling for the lender and servicer.
November 20, 2023
Florida Federal Judge Approves $9M Settlement Between DOJ, Bank On Redlining Claims

JACKSONVILLE, Fla. — A federal judge in Florida has approved a consent order under which Ameris Bank agrees to pay $9 million to resolve the U.S. Department of Justice’s (DOJ) allegations that it engaged in a pattern or practice of redlining in predominately Black and Hispanic neighborhoods in Jacksonville.
November 20, 2023
Louisiana High Court Refuses To Review Ruling In Suit Alleging Insured Stole Files

NEW ORLEANS — The Louisiana Supreme Court refused to disturb a Louisiana appeals court’s finding that a residential mortgage broker’s electronic loan files are “tangible” under state law and, therefore, can be defined as “‘property’ that is susceptible to ‘loss of use’” under a competitor’s business liability insurance policy, allowing to stand the lower court’s reversal of a summary judgment ruling in favor of an insurer that intervened in the broker’s lawsuit alleging that its insured used stolen files to broker mortgage loans for its customers.
November 20, 2023
Lender Urges 4th Circuit To Review Class Certification In Alleged Kickbacks Case

RICHMOND, Va. — Review of a class certification ruling by a trial court in a case brought by mortgagors who allege that they paid excess charges due to illegal kickbacks should occur as the borrowers have failed to show that damages can be measured on a classwide basis, lender Mr. Cooper Group Inc. argues in its Nov. 17 reply brief filed in the Fourth Circuit U.S. Court of Appeals.
November 17, 2023
Nationstar Granted Dismissal Of Claims That It Unjustly Denied COVID-19 Aid

ALLENTOWN, Pa. — A federal judge in Pennsylvania granted a loan servicer’s motion to dismiss putative class claims accusing it of denying a borrower a COVID-19 loss mitigation option on the ground that it would not have reduced the principal and interest portions of his Federal Housing Administration (FHA) mortgage, opining in a footnote that the borrower failed to “adequately plead a violation.”
November 17, 2023
$3.58M Settlement Granted Preliminary Approval In Mortgage Pay-To-Pay Suit

WASHINGTON, D.C. — A federal judge in the District of Columbia granted preliminary approval of a $3,587,254 class settlement to be paid by Nationstar Mortgage LLC, doing business as Mr. Cooper, to end a complaint over the company’s practice of charging mortgagors “convenience fees” to pay their mortgage over the phone.
November 17, 2023
Judge Dismisses Unfair Practices Claims For Lender’s Inquiries About Ex

SAN DIEGO — A California federal judge granted a mortgage lender’s motion to dismiss a woman’s suit accusing it of allegedly harassing her and accusing her of mortgage fraud in violation of the California debt collection law and unfair competition law (UCL) by sending her and her accountant questions about her former husband, alimony payments and finances, with the judge finding that debt collection claims don’t apply because she had no outstanding debt at the time.
November 14, 2023
Judgment Issued For Mortgagee In Row With Estate Administrator Over Fire Loss

PHILADELPHIA — A Pennsylvania federal judge granted judgment in favor of a mortgage company in an estate administrator’s breach of contract suit against it over failure to return $312,034.34 in fire loss draft funds to the estate, finding that because the company’s limited time offer to settle the loan balance did not include an agreement to return the loss draft funds, the administrator failed to prove his breach of contract claim.
November 13, 2023
Class Claims ‘Pure Profit’ Fees Tacked On After Condo Foreclosure Sale

MIAMI — A mortgage servicer violated the Fair Debt Collection Practices Act (FDCPA) and state laws when it allegedly included excessive, unauthorized and fraudulent fees in a payoff quote that were “nothing more than pure profit,” the owner of a condominium claims in a class action filed in a federal court in Florida.
November 13, 2023
Counsel Exits Case After Citing Lender-Client’s Inability To Pay

BALTIMORE — A federal judge in Maryland granted a law firm’s motion to withdraw as counsel after it told the judge that its client — a mortgage lender facing claims that it engaged in an illegal kickback scheme — lacked the assets or resources required to continue paying it for its services.
November 10, 2023
Borrowers Voluntarily Dismiss UCL Claim Against Mortgage Servicer, Beneficiary

SAN FRANCISCO — Two borrowers who were facing foreclosure due to a severely delinquent loan filed notice in California federal court of voluntary dismissal of their claim against a mortgage loan servicer and beneficiary for violation of California’s unfair competition law (UCL) after a judge dismissed their other federal and California law claims on statute of limitations grounds and for failure to state a claim.
November 06, 2023
U.S. Supreme Court Hears Arguments In Appeal Over FCRA And Sovereign Immunity

WASHINGTON, D.C. — Congress did not waive the United States’ sovereign immunity when it amended the Fair Credit Reporting Act (FCRA) to provide that an individual who violates the FCRA is liable for monetary damages, the assistant to the solicitor general told the U.S. Supreme Court Nov. 6 during oral arguments in an appeal concerning a borrower’s attempt to sue the U.S. Department of Agriculture (USDA) Rural Development Rural Housing Service for allegedly misrepresenting that he was past due on his mortgage.
November 06, 2023
Split Panel Affirms Dismissal Of UCL Suit Against Unlicensed Mortgage Lender

SAN DIEGO — A split California appellate panel on Nov. 3 affirmed the dismissal of a couple’s putative class action against a mortgage lender that issued them a $550,000 home loan while unlicensed to issue loans in California, ruling that the couple failed to plead an injury establishing standing under California’s unfair competition law (UCL), while a dissenting justice said the couple’s UCL claims were sufficiently pleaded.
November 06, 2023
Lender Seeks Class Cert Review By 4th Circuit In Mortgage Kickbacks Case

RICHMOND, Va. — A trial court “relied on a flawed . . . standard” when it certified a class of mortgagors in a lawsuit alleging excess charges and illegal kickbacks “based merely on the face of the Plaintiffs’ complaint, while noting that classes had been certified in other cases against other lenders,” lender Mr. Cooper Group Inc. argues in a petition filed in the Fourth Circuit U.S. Court of Appeals seeking permission to appeal.
November 03, 2023
Couple, Wells Fargo Agree To Dismiss RESPA Suit After Reaching Settlement

LOS ANGELES — A couple has agreed to dismiss with prejudice their complaint alleging that Wells Fargo Bank NA violated the Real Estate Settlement Procedures Act (RESPA) after notifying the court that the parties had reached a confidential settlement.
November 03, 2023
Magistrate Judge Recommends Dismissing Borrower’s Claims To Avoid Foreclosure

AUSTIN, Texas — A federal magistrate judge in Texas recommended granting a mortgage servicer’s motion to dismiss all but one claim against it because the claims, which include breach of contract, usury and fraud in an attempted foreclosure, are barred by the doctrine of res judicata and the applicable statute of limitations.
November 03, 2023
State Claim Partially Dismissed In Borrower’s Foreclosure Counsel Fees Countersuit

SEATTLE — A borrower’s counterclaim that the assignee of his mortgage loan and the loan’s servicer violated the Washington Consumer Protection Act (CPA) when rolling attorney fees from the borrower’s earlier Real Estate Settlement Procedures Act (RESPA) case into his loan payoff amount was “clearly inadequate” and could not be cured, a federal judge in Washington ruled, partially granting a motion to dismiss by those two counterdefendants.
November 01, 2023
Judge Approves Consent Order In Discrimination Suit Against Rhode Island Bank

PROVIDENCE, R.I. — A federal judge in Rhode Island on Oct. 31 approved a jointly filed consent order under which a Rhode Island bank will invest a minimum of $7 million into a loan subsidy fund designed to increase lending opportunities for Black and Hispanic residents to resolve a U.S. government action accusing the bank of discriminating against Black and Hispanic home loan applicants.