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

Mealey's Mortgage Lending

April 21, 2023
Government Weighs In On Legal Questions Posed In Appraisal Discrimination Suit

BALTIMORE — The U.S. government filed a statement of interest in Maryland federal court addressing questions raised by a mortgage lender in a lawsuit brought by minority homeowners who allege that a real estate appraisal company and the lender violated the Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA) by undervaluing their home in an appraisal based on the borrowers’ race and denying them a refinance loan based on that undervaluation, respectively.
April 20, 2023
Settlement Claim Distribution Completed In Convenience Fee Suit

SAN FRANCISCO — Parties in a lawsuit brought by a borrower who alleged that Ocwen Loan Servicing LLC violated state debt collection and unfair competition laws by charging “pay-to-pay” convenience fees for processing the borrower’s loan payments online told a federal judge in California in a joint notice that all funds from a $7 million class settlement between the parties have been distributed as required under the terms of the final settlement order.
April 20, 2023
Borrower Claims In Mortgage Discharge Suit Deemed Insufficient As Pleaded

CINCINNATI — A federal judge did not err in denying a borrower’s summary judgment motion in a foreclosure action because the borrower failed to sufficiently state a claim for relief against her mortgage lender or the law firm the lender hired to initiate foreclosure proceedings, a Sixth Circuit U.S. Court of Appeals panel ruled in an unpublished order.
April 18, 2023
Home Equity Noteholder’s Foreclosure Suit Not Time-Barred, Texas Panel Rules

DALLAS — A Texas trial court did not err in denying a summary judgment motion filed by borrowers in a foreclosure dispute because the borrowers failed to provide evidence to support their argument that the holder of their home equity loan did not bring the foreclosure suit within the four-year statute of limitations period, a Texas appellate court panel ruled.
April 17, 2023
Quiet Title Order On Property Subject Of Foreclosure Returned To Trial Court

GRAND RAPIDS, Mich. — A Michigan court erred in quieting title to property that is the subject of foreclosure proceedings because a lender failed to show that title to the property had been conveyed to a business entity; however, the circumstances of the dispute require the imposition of “an equitable mortgage” on the property as security for the mortgage to the business, a Michigan Court of Appeals panel ruled in affirming in part, vacating in part and remanding.
April 13, 2023
CFPB Appeals Dismissal Of Discriminatory Lending Suit Claims To 7th Circuit

CHICAGO — The Consumer Financial Protection Bureau (CFPB) has asked the Seventh Circuit U.S. Court of Appeals to review an Illinois federal judge’s ruling that the agency failed to sufficiently plead that a mortgage lender engaged in discrimination against prospective African-American mortgage borrowers by allegedly discouraging them from applying for mortgage loans in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), according to a notice of appeal filed in the federal appellate court.
April 12, 2023
6th Circuit Declines En Banc Rehearing In Wrongful Foreclosure Suit Appeal

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied a borrower’s petition for en banc rehearing of an appeal of a wrongful foreclosure and Fair Debt Collection Practice Act (FDCPA) lawsuit, stating the no circuit judge voted to take such action.
April 11, 2023
Panel Agrees That Parties To Loan Modification Should Restart Appraisal Process

ATLANTA — A federal district court did not err in requiring parties to a commercial mortgage loan to restart the appraisal process for a refinance agreement because the borrower’s appraisal was not “conclusive and binding” under the terms of a loan modification agreement and the borrower’s appraisal violated a section of the loan modification agreement’s requirement that appraisals meet certain requirements, an 11th Circuit U.S. Court of Appeals panel ruled in affirming.
April 06, 2023
Borrower Failed To Plead Any Actionable Claim In Foreclosure Suit, Panel Rules

SEATTLE — A federal district court did not err in granting summary judgment in favor of the assignee of a mortgage loan, the loan’s servicer and a company hired to commence foreclosure proceedings in a borrower’s lawsuit stemming from his default of his mortgage loan because the borrower failed to sufficiently plead any of his state or federal lending law claims, a Ninth Circuit U.S. Court of Appeals panel affirmed April 5.
April 06, 2023
Panel: Loan Servicer’s Bankruptcy Stay, Discharge Violations Were Harmless

SAN FRANCISCO — While a Ninth Circuit U.S. Court of Appeals bankruptcy appellate panel (BAP) did not err in ruling that a mortgage loan servicer’s violation of a bankruptcy court’s automatic stay and discharge injunction was harmless, a debtor borrower is entitled to attorney fees incurred in prosecuting the stay, a Ninth Circuit panel ruled in affirming in part, reversing in part and remanding.
March 31, 2023
Government Allowed To File Interest Statement In Appraisal Discrimination Suit

BALTIMORE — According to a docket entry, a federal judge in Maryland on March 30 granted the U.S. government’s request to filed a statement of interest in a lawsuit brought by minority homeowners who allege that a real estate appraisal company and their mortgage lender violated the Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA) by undervaluing their home in an appraisal based on the borrowers’ race and denying them a refinance loan based on the undervaluation, respectively.
April 04, 2023
Damages Properly Pleaded Against Lender In Mortgage Escrow Suit, Borrower Argues

SAN ANTONIO — A federal judge should deny a mortgage lender’s motion to dismiss in a lawsuit stemming from the lender’s conversion of a borrower’s loan to an escrow loan after the borrower failed to pay his property taxes because the borrower has sufficiently alleged independent damages in pleading his claims, the borrower argues in an opposition brief filed in Texas federal court.
April 04, 2023
Hawaii Justices Overturn Appeals Court’s Denial Of Relief In Foreclosure Suit

HONOLULU — While a state appellate court did not err in determining that a borrower was time-barred from bringing a motion for relief from a foreclosure ruling more than 2-1/2 years after the foreclosure, the appellate court did err in affirming a lower court’s denial of the borrower’s request for relief based on “both a fraud on the court theory and under the equitable principles governing foreclosure,” the Hawaii Supreme Court ruled in affirming in part and reversing in part.
April 03, 2023
Borrowers Seek High Court Review Of Actions Surrounding Foreclosure

WASHINGTON, D.C. — Borrowers subject to foreclosure proceedings were improperly denied due process because a Washington state trial court and appellate court erroneously held that the borrowers were barred by collateral estoppel from obtaining relief from judgment even though that relief obtained by the defendants was obtained through fraud on the court by officers of the court, the borrowers argue in a petition for writ of certiorari filed in the U.S. Supreme Court.
March 30, 2023
Borrowers’ RESPA Causes Of Action Against Loan Servicer Deemed Lacking Merit

SEATTLE — Borrowers alleging that the holder of the promissory note and deed of trust on their home as well as their loan servicer violated the Real Estate Settlement Procedures Act (RESPA) by failing to respond to the borrowers’ qualified written requests (QWRs) and issued false reports to credit reporting agencies have failed to sufficiently allege that any of the defendants’ actions violated RESPA, a federal judge in Washington ruled in dismissing the borrowers’ federal law claims.
March 29, 2023
Panel: Loan Servicers’ Statements In Fee-Splitting Suit Were Not Fraud On The Court

NEW YORK — A Second Circuit U.S. Court of Appeals panel said a federal district court did not err in ruling that the alleged conduct of mortgage loan servicers and others in a mortgage default and fee-splitting lawsuit did not rise to the level of fraud on the court because the conduct did not impair the court’s “ability to fully and fairly adjudicate” the borrower’s case since the “fraud alleged could have been redressed” in a prior action.
March 28, 2023
Borrower Class Claims In Predatory Lending Suit Deemed Insufficient As Pleaded

HONOLULU — Borrowers in a predatory lending class action have failed to sufficiently plead claims to support their allegations that their loan servicers engaged in any racketeering activities or violated provisions of the Fair Housing Act (FHA) by locking the borrowers into predatory loans and falsifying loan documents to securitize the loans and ultimately foreclose on the borrowers’ property when they defaulted, a federal judge in Hawaii ruled in granting the loan servicers’ motion to dismiss without prejudice.
March 27, 2023
Solicitor General Invited To File Briefs In National Bank Act Preemption Appeals

WASHINGTON, D.C. — The U.S. Supreme Court on March 27 invited the solicitor general of the United States to file briefs in a pair of unrelated appeals in which petitioners argue that federal appellate court rulings in their actions have created a split among the circuits regarding whether the National Bank Act (NBA) preempts state escrow laws.
March 27, 2023
High Court Won’t Let Borrower Proceed In Forma Pauperis In Mortgage Default Suit

WASHINGTON, D.C. — The U.S. Supreme Court on March 27 denied a borrower’s request to proceed in forma pauperis in her appeal of a Fourth Circuit U.S. Court of Appeals panel’s dismissal of her appeal seeking to reverse dismissal orders against her lender and a loan modification provider for lack of jurisdiction on timeliness grounds in a lawsuit stemming from the sale of the borrower’s home via foreclosure while she was in bankruptcy proceedings.
March 27, 2023
Reconsideration Of Review In Borrowers’ Foreclosure Due Process Appeal Denied

WASHINGTON, D.C. — The U.S. Supreme Court on March 27 declined to reconsider its denial of certiorari in an appeal of a Washington appellate panel’s decision affirming a state court’s grant of summary judgment in favor of a lender in a foreclosure dispute, in which the borrowers argued that the state court rulings deprived them of their constitutional right to due process.
March 27, 2023
High Court Won’t Hear Service Member’s Appeal In SCRA Home Loan Foreclosure

WASHINGTON, D.C. — The U.S. Supreme Court on March 27 denied review of an appeal in which a service member and his wife asked the Supreme Court to determine whether a provision of the Servicemembers Civil Relief Act (SCRA) tolls the statute of limitations on a state law foreclosure action when the service member did not seek relief under the statute.
March 22, 2023
9th Circuit Will Not Rehear RESPA Class Decertification Denial Appeal

SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel declined to rehear its ruling reversing and remanding to federal district court a district court’s ruling denying a motion for class decertification in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements to federal district court.
March 22, 2023
County: Argument Properly Raised For Judge To Reconsider FHA Suit Ruling

CHICAGO — A federal judge in Illinois should alter or amend his ruling excluding the testimony of a county’s expert in a Fair Housing Act (FHA) discriminatory lending lawsuit against Wells Fargo & Co. and several of its affiliates and granting summary judgment in favor of the defendants because the judge committed several errors that when viewed “individually or taken together,” show that his reasoning for excluding the testimony was erroneous under Daubert v. Merrell Dow Pharmaceuticals Inc., the county argues in a brief in reply to its motion to alter or amend.
March 21, 2023
Borrower’s Arguments In Loan Denial Suit ‘Irrelevant,’ Not New Evidence

BATON ROUGE, La. — A federal judge in Louisiana should deny a borrower’s motion for reconsideration in a lawsuit alleging that a lender violated the Equal Credit Opportunity Act (ECOA) by denying the borrower a mortgage loan based on an allegedly incomplete loan application because the borrower’s arguments in support of reconsideration are “irrelevant” and seek to have the judge reconsider “previously denied arguments,” the lender argues in an opposition brief.
March 21, 2023
Bank: Justices Should Disregard Parties’ Mischaracterization Of Appeal

WASHINGTON, D.C. — Petitioners in a substantially similar appeal currently pending in the U.S. Supreme Court have mischaracterized the record in a lawsuit against a bank stemming from its alleged failure to pay borrowers interest on their mortgage loan escrow accounts, and the Supreme Court “should not be misled” by statements made by those petitioners, the bank argues in a supplemental brief filed in the Supreme Court.