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

Mealey's Mortgage Lending

March 16, 2023
Magistrate: Portion Of Parcel Containing Dwelling Was Part Of Reverse Mortgage

MONTGOMERY, Ala. — A reverse mortgage company is entitled to summary judgment on a homeowner’s injunctive and declaratory relief and damages claims in a lawsuit stemming from a reverse mortgage default and subsequent foreclosure sale because while a portion of the property at issue was not correctly described in the metes and bounds description in a foreclosure deed, the “record is clear, convincing, and satisfactory that the dwelling was a key component” of the reverse mortgage, a federal magistrate judge in Alabama ruled.
March 15, 2023
Rehearing Denied In Appeal Over Lien’s Superpriority Status In Foreclosure Suit

SAN JOSE, Calif. — A Ninth Circuit U.S. Court of Appeals panel on March 14 denied a homebuyer’s petition for panel rehearing in a foreclosure dispute, declining the homebuyer’s request to rehear the appeal after agreeing with a federal district court that while the trustee’s claims were time-barred under the statute of limitations, summary judgment was warranted on the homebuyer’s counterclaim to quiet title because the property was subject to the trustee’s “preserved first-position security interest.”
March 14, 2023
Maine Justices Delve Into Legislature’s Intent In Answering Warranty Question

PORTLAND, Maine — The Maine Supreme Court answered a question posed in a breach of warranty suit asking it to determine whether, under state law, a warranty is implied by the use of the term “Warranty Deed” in certain instances in the negative, ruling that if the Maine Legislature had intended that use of that term “alone would be sufficient to imply warranties, the definition of ‘warranty covenants’ and the forms provided” under state law “would be surplusage.”
March 14, 2023
Hawaii High Court: Wrongful Foreclosure Damages Actions Not Always Barred

HONOLULU — An action alleging wrongful judicial foreclosure that seeks only monetary damages against the foreclosing lender and not to avoid the foreclosure sale is not barred if the action was filed after the issuance of a certificate of title to the buyer at foreclosure, the Hawaii Supreme Court ruled in answering a certified question from a federal bankruptcy court in the negative.
March 13, 2023
Panel Won’t Rehear Appeal In RESPA Suit Against Loan Modification Provider

ATLANTA — Without providing further detail, an 11th Circuit U.S. Court of Appeals panel declined to rehear an appeal in a lawsuit brought by borrowers who alleged that their mortgage loan modification provider violated provisions of the Real Estate Settlement Procedures Act (RESPA).
March 09, 2023
Borrowers’ Amended Claims Against Loan Servicer Still Don’t Pass Muster

RIVERSIDE, Calif. — A federal judge in California ruled that even though borrowers have amended their claims against their mortgage loan servicer in a foreclosure dispute stemming from the servicer’s alleged failure to properly notify the borrowers that it had assumed the servicing responsibilities for their mortgage, they have still failed to state a claim for relief in making any of their claims.
March 03, 2023
Lender Waives High Court Response In SCRA Limitations Tolling Appeal

WASHINGTON, D.C. — Wells Fargo USA Holdings and once of its subsidiaries waived their right to respond to a petition for writ of certiorari filed in the U.S. Supreme Court in which a service member and his wife have 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 02, 2023
Lender: Issues Raised In Borrower’s Petition Do Not Support Grant Of Certiorari

WASHINGTON, D.C. — The U.S. Supreme Court should deny review of a Fourth Circuit U.S. Court of Appeals panel’s dismissal of a borrower’s appeal for lack of jurisdiction on timeliness grounds because none of the issues raised by the borrower in her petition for writ of certiorari is properly before the Supreme Court, a mortgage lender and another lender argue in an opposition brief.
March 01, 2023
Bank Enters Into Consent Order Over Alleged Mortgage Redlining Activities

COLUMBUS, Ohio — A mortgage lender accused of violating the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) by engaging in unlawful redlining through its allegedly discriminatory lending practices in majority Black and Hispanic census tracts in the Columbus, Ohio, Metropolitan Statistical Area (Columbus MSA) has agreed to undertake certain remedial efforts and make investments into its minority lending programs, according to a consent order filed in Ohio federal court on Feb. 28.
February 27, 2023
Loan Assignee Unable To Show It Had Possession Of Note At Time Of Foreclosure

HONOLULU — A Hawaii appellate court erred in affirming a state trial court’s grant of summary judgment in favor of an assignee of the mortgage loan in a foreclosure dispute because the assignee was unable, pursuant to Hawaii Supreme Court precedent, to show that it had possession of the note at the time it filed the foreclosure action, the Hawaii Supreme Court ruled in vacating the appellate court’s ruling.
February 24, 2023
ECOA’s Discrimination Prohibition Does Not Extend To Prospective Loan Applicants

CHICAGO — The Consumer Financial Protection Bureau (CFPB) 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 because while the Equal Credit Opportunity Act (ECOA) is unambiguous in its prohibition of discrimination of “applicants” for credit, this prohibition does not pertain to “prospective applicants,” a federal judge in Chicago ruled.
February 24, 2023
Borrowers’ Petition In NBA Preemption Appeal Not Good Vehicle For Review

WASHINGTON, D.C. — The U.S. Supreme Court should deny review of a Second Circuit U.S. Court of Appeals ruling that the National Bank Act (NBA) preempts New York’s escrow-interest law because the Supreme Court has already denied certiorari on the question presented by borrowers in the instant action and because a recently filed petition in a substantially similar case is a better vehicle for addressing the issue, Bank of America NA argues in a respondent’s brief filed in the Supreme Court.
February 23, 2023
Split S.D. High Court Upholds Finding That Mortgage Was Void, Unenforceable

PIERRE, S.D. — In a split decision, the South Dakota Supreme Court found that a state trial court did not err in determining that a personal loan obtained by the trustee of a spendthrift trust was void and unenforceable because the trustee did not have the authority to obtain the personal loan and mortgage certain property belonging to the trust, even with the consent of the other trust beneficiaries.
February 22, 2023
Issue Of Lender’s Compliance With Notice Requirements Sent Back To Trial Court

PROVIDENCE, R.I. — A state trial court erred in ruling that a mortgage lender complied with the necessary notice requirements in sending a borrower a notice of foreclosure to the mortgaged property, but not the home in which she lived, because the trial court was required to resolve whether the borrower’s physical address was listed in the tax assessor’s office before issuing its ruling and failed to do so, the Rhode Island Supreme Court ruled in partially remanding a wrongful foreclose action to the trial court.
February 22, 2023
Trial Court Overstepped In Certifying Foreclosure Judgment As Appealable

MONTGOMERY, Ala. — The Alabama Supreme Court panel ruled that it lacked jurisdiction to hear an appeal in an ejectment action brought against borrowers whose home was foreclosed on after they defaulted on their mortgage loan because a state trial court exceeded its discretion when it certified its partial judgment in the lawsuit as immediately appealable.
February 21, 2023
Judgment In Foreclosure Action Was Not Sufficiently Final To Allow For Appeal

NEW YORK — A Second Circuit U.S. Court of Appeals panel found that it lacks jurisdiction to hear an appeal in a foreclosure dispute because although a federal district court issued a final judgment on some claims and severed the only other remaining claim, it also referred the action to a magistrate judge for a calculation of the amount of judgment.
February 16, 2023
Lender Off The Hook For Adding Information In Pre-Foreclosure Notice

ALBANY, N.Y. — A mortgage lender’s inclusion of additional information in a New York state law-mandated foreclosure notice sent to a borrower notifying him that he was in default and faced foreclosure was not an improper notice and did not void the foreclosure, the New York Court of Appeals ruled in overturning a state appellate court’s ruling.
February 15, 2023
Borrower: Panel Missed Key Evidence In Affirming Summary Judgment In RESPA Suit

ATLANTA — Panel rehearing is necessary in a lawsuit brought by borrowers who alleged that their mortgage loan modification provider violated provisions of the Real Estate Settlement Procedures Act (RESPA) because an 11th Circuit U.S. Court of Appeals panel “misapprehended” or “overlooked” points of fact that would have allowed it to come to a different conclusion, one of the borrowers argues in a petition for rehearing.
February 15, 2023
Loan Servicer Followed Necessary Requirements In Initiating Foreclosure

PROVIDENCE, R.I. — A Rhode Island trial court did not err in granting summary judgment in favor of a loan servicer in a mortgage foreclosure dispute with a borrower because the borrower was properly provided with notice of foreclosure counseling and the servicer’s default notice satisfies state law, the Rhode Island Supreme Court held in affirming.
February 10, 2023
Bank Agrees To Remedial Plan Over Redlining Actions Against Minority Borrowers

LOS ANGELES — A federal judge in California issued a consent order in a government lawsuit alleging that a national bank violated federal law by engaging in redlining in its offering of mortgage loans to Black and Latino borrowers in the Los Angeles metropolitan area, enjoining the bank from future engagement in the practice and ordering the bank to undertake several remedial steps to increase its loan activities to minority borrowers in Los Angeles.
February 09, 2023
Borrower Claims In Loan Modification Suit Lack Key Elements, Judge Rules

DALLAS — Dismissal of claims against a mortgage lender over its refusal to grant borrowers a loan modification and subsequent initiation of foreclosure proceedings against the borrowers after they defaulted on their loan is necessary because the borrowers have failed to plead “key elements” of each of the claims that have brought against the lender, a federal judge in Texas ruled.
February 06, 2023
Borrower Failed To Plead Claims In Foreclosure Suit With Required Particularity

BALTIMORE — A borrower failed to sufficiently state any of her claims with the required particularity in bringing a lawsuit against her lender, substitute trustees and her loan servicer on claims that the defendants violated Maryland law and the Real Estate Settlement Procedures Act (RESPA) in proceeding with a foreclosure action while the borrower was awaiting approval on a loan modification, a federal judge in Maryland ruled in dismissing the borrower’s claims with prejudice.
February 03, 2023
Judge Finds No ECOA Violation In Lender’s Denial Of Mortgage Application

BATON ROUGE, La. — A mortgage lender did not violate provisions of the Equal Credit Opportunity Act (ECOA) in denying a borrower a mortgage loan for the purchase of a home because the borrower’s application was incomplete when submitted and the lender complied with the ECOA’s notice requirements in making the borrower aware of the issue, a federal judge in Louisiana ruled in granting the lender’s motion for summary judgment.
February 01, 2023
Debt Collection Claims Must Proceed In Borrower Suit Over HELOC Denial

DETROIT — A federal judge in Michigan on Jan. 31 ruled that a borrower’s state and federal debt collection law violation claims against a debt collector must proceed to trial because competing evidence precludes the borrower from obtaining summary judgment as to liability against the debt collector over its failure to remove a disputed debt from the borrower’s credit report, resulting in her inability to receive a home equity line of credit (HELOC) from her mortgage lender.
February 01, 2023
Judge: Servicer Did Not Obstruct Borrower’s Attempt To Obtain Loan Modification

BOSTON — A federal judge in Massachusetts on Jan. 31 ruled that a mortgage loan servicer did not engage in unfair or deceptive business practices in denying three attempts by a borrower to obtain a modification on her loan because undisputed facts show that the borrower failed to provide the servicer with the necessary documentation for the modification requests to be considered.