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

Mealey's Mortgage Lending

December 15, 2022
None Of Borrowers’ Claims Against Loan Servicer In Foreclosure Suit Pass Muster

RIVERSIDE, Calif. — A federal judge in California issued a tentative opinion in a foreclosure dispute between borrowers and their mortgage loan servicer, opining that he would dismiss each of the borrowers’ claims stemming from the servicer’s alleged failure to properly notify them that it had assumed the servicing responsibilities for their mortgage is warranted because the borrowers failed to sufficiently state a claim for relief in making several of their claims.
December 15, 2022
Reverse Mortgage Trustee Dismissed from FDCPA Suit After Settlement Reached

RICHMOND, Va. — A federal judge in Virginia granted a borrower’s motion to voluntarily dismiss a substitute trustee from a lawsuit stemming from the trustee’s initiation of foreclosure proceedings after the borrower allegedly defaulted on her reverse mortgage after the parties reached the terms of an undisclosed settlement agreement.
December 15, 2022
Wrongful Foreclosure Suit Parties Seek Dismissal In Wake Of Settlement Agreement

SAN DIEGO — In California federal court, parties in a wrongful foreclosure action filed a joint motion to dismiss claims brought by a borrower against her mortgage loan servicer seeking dismissal of all claims brought in the action after the parties reached the terms of a settlement agreement (Pia McAdams v. Nationstar Mortgage LLC, No. 20-2202, S.D. Calif.).
December 15, 2022
Mortgage Debt Fraudster Denied En Banc Rehearing In Appeal Of Conviction

NEW YORK — The Ninth Circuit U.S. Court of Appeals ruled that it will not grant en banc rehearing to a woman who was seeking a new trial on claims of ineffective pretrial counsel after being convicted for her role in orchestrating a fraudulent mortgage debt assistance program (United States v. Jacqueline Graham, No. 20-832, 2nd Cir.).
December 14, 2022
Panel: Mortgage Borrower Has Prudential Standing As Debtor In Possession

NEW ORLEANS — A federal district court did not err in affirming a bankruptcy court’s denial of a debtor mortgage lender’s motion for a determination of secured claim under 11 U.S. Code Section 506(b) in a borrower’s Chapter 11 bankruptcy suit because the lender’s argument that the borrower lacks prudential standing ignores the borrower’s “fiduciary duties as a debtor in possession,” a Fifth Circuit U.S. Court of Appeals panel ruled in affirming.
December 12, 2022
Parties Granted Access To Discovery Documents In Borrower’s Loan Servicing Suit

INDIANAPOLIS — A federal magistrate judge in Indiana granted a motion to intervene and modify the terms of a stipulated protective order in a lawsuit brought by a borrower alleging that mortgage servicer Ocwen Loan Servicing LLC engaged in misconduct in the servicing of her loan, ruling that intervenor plaintiffs in a substantially similar adversary proceeding against Ocwen have shown that common questions of law or fact exist and that Ocwen will not be prejudiced by granting the motion.
December 12, 2022
Government Granted Default Judgment, Awarded Fees In Foreclosure Lawsuit

BUFFALO, N.Y. — A federal magistrate judge in New York recommended that a motion for default and order of foreclosure be granted in a foreclosure proceeding filed by the U.S. government against borrowers and several other interested parties and that the government be awarded damages, ruling that the government has presented sufficient evidence showing that the defendants have failed to respond in any way to the complaint or motions filed in the lawsuit.
December 06, 2022
9th Circuit Sets Oral Argument In Mortgagors’ Appeal Of Class RESPA Suit Ruling

SAN FRANCISCO — Oral argument in an appeal of a ruling in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements has been scheduled for Feb. 17 before a Ninth Circuit U.S. Court of Appeals panel.
November 23, 2022
Wells Fargo Had No Duty To Disclose Error In Denial Of Loan Modification

CINCINNATI — A Sixth Circuit U.S. Court of Appeals panel affirmed a federal district court’s dismissal of claims brought by borrowers who were improperly denied a loan modification by Wells Fargo Bank NA and had their home foreclosed as a result, ruling that while the lower court found that the borrowers’ claims failed because they failed to sufficiently plead causation, the panel ruled that the claims failed because the borrowers failed to plead the existence of a duty to disclose the error on the part of Wells Fargo.
November 23, 2022
Supreme Court Asked To Hear Borrowers’ Due Process Appeal In Foreclosure Suit

WASHINGTON, D.C. — Mortgage borrowers asked the U.S. Supreme Court to grant review of a Washington appellate panel’s decision affirming a state trial court’s grant of summary judgment in favor of a lender in a foreclosure dispute because the state court rulings deprived the borrowers of their constitutional right to due process.
November 23, 2022
Settlement Agreement Noted In Mortgage Loan, Force-Placed Insurance Row

SACRAMENTO, Calif. — The remaining parties in a putative class suit over home mortgage loan servicing and a reinsurance program in which the claims surviving dismissal include violation of California’s unfair competition law (UCL) have reached an unspecified settlement, they tell a California federal court in a Nov. 22 joint notice.
November 22, 2022
Supreme Court Asked To Review Man’s Foreclosure Proceeding Appeals

WASHINGTON, D.C. — U.S. Supreme Court review of the Oklahoma Supreme Court’s refusal to hear a man’s appeal in a foreclosure action against his mortgage lender is necessary because the state high court’s ruling deprived the man of his constitutional rights to due process and equal protection, the man argues in a petition for writ of certiorari filed in the U.S. Supreme Court.
November 21, 2022
Panel: Immigrant’s Removal Proper Based On Mortgage Lending Fraud Conviction

SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on Nov. 18 ruled that the Board of Immigration Appeals (BIA) did not err in upholding an immigration judge’s ruling that a U.S. immigrant was removable based on his conviction for mortgage lending fraud because, under the “three-step categorical and modified categorical approach,” the immigrant’s conviction comprised an aggravated felony.
November 21, 2022
Panel: Loan Servicer’s Quiet Title Claims Over HOA Foreclosure Sale Timely

SAN JOSE, Calif. — A federal district court did not err in granting summary judgment on quiet-title claims stemming from a homeowners association (HOA) foreclosure sale on property for which Ocwen Loan Servicing LLC was acting as mortgage loan servicer on behalf of Federal Home Loan Mortgage Corp. (Freddie Mac) because Ocwen brought its claims within the relevant statute of limitations, a Ninth Circuit U.S. Court of Appeals panel affirmed Nov. 18.
November 21, 2022
Trustee Lien’s Superpriority Status In Foreclosure Dispute Upheld On Appeal

SAN JOSE, Calif. — A Ninth Circuit U.S. Court of Appeals panel on Nov. 18 affirmed a federal district court’s grant of summary judgment in favor of a trustee on a homebuyer’s counterclaim for summary judgment in a foreclosure dispute, agreeing 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.”.
November 18, 2022
Borrower Suit Over Mortgage Loan Servicer’s Handling Of Escrow Account Dismissed

CINCINNATI — A federal judge in Ohio terminated a borrower lawsuit against a mortgage loan servicer over its handling of the borrowers’ escrow account after the parties agreed to dismiss the lawsuit’s remaining claims with prejudice, according to a docket entry.
November 17, 2022
Reverse Mortgage Trustee’s Arguments To Not Support Dismissal Of FDCPA Claim

RICHMOND, Va. — Dismissal of a borrower’s Fair Debt Collection Practices Act (FDCPA) claim against the substitute trustee in a lawsuit stemming from the trustee’s initiation of foreclosure proceedings after the borrower alleged defaulted on her reverse mortgage is not warranted because none of the trustee’s arguments in favor of dismissal of the FDCPA claim against it support such a ruling, a federal judge in Virginia ruled.
November 10, 2022
Panel Transfers Loan Servicer’s Attorney Fee Request To District Court

ATLANTA — Without providing detail, an 11th Circuit U.S. Court of Appeals panel on Nov. 9 transferred a mortgage loan servicer’s motion for $47,790 in attorney fees to federal court for consideration of whether the servicer is entitled to the fees and, if so, the proper amount to be awarded in an appeal of the lower court’s dismissal of the borrower’s wrongful foreclosure claim due to a lack of standing.
November 09, 2022
Borrower Not Released From Mortgage Debt When Dismissed From Foreclosure Suit

NEW YORK — A federal district court did not err in granting summary judgment in favor of a mortgage loan servicer in a Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA) lawsuit brought by a man alleging that the servicer violated the statute by improperly reporting a mortgage debt to a credit reporting agency because the loan servicer’s release of the man from a foreclosure action did not release him from “liability under the mortgage note,” a Second Circuit U.S. Court of Appeals panel affirmed.
November 04, 2022
Only TILA Claim Remains In Borrower Suit Against Loan Servicer, Assignee

LOS ANGELES — A federal judge in California ruled that although a borrower has sufficiently alleged that his mortgage loan servicer and the assignee of the loan violated provisions of the Trust in Lending Act (TILA) by failing to provide him with the necessary periodic statements before declaring his loan in default, the borrower has failed to sufficiently plead any of his other claims against those defendants.
November 03, 2022
Loan Servicer Denied Summary Judgment On Borrower’s Lending Law Claims

AKRON, Ohio — A federal judge in Ohio denied a mortgage loan servicer’s motion for summary judgment in a mortgage loan dispute with a borrower, ruling that genuine issues of material fact exist as to whether the loan servicer violated state and federal lending laws in its handling of the borrower’s request for a loan modification.
November 01, 2022
Alabama Trial Court Properly Awarded Woman $5,000 Homestead Award

MONTGOMERY, Ala. — An Alabama trial court did not err in granting a $5,000 homestead award to a woman in a lawsuit stemming from a foreclosure on certain real property because it was undisputed that the property was the woman’s homestead when her husband executed a commercial loan using the property as collateral without her knowledge or consent, the Alabama Supreme Court affirmed in a consolidated appeal.
October 31, 2022
Borrower’s FCRA Suit Dismissed After Settlement Reached With Final Defendant

DALLAS — A federal judge in Texas issued an order dismissing a borrower lawsuit against a mortgage lender over its alleged improper reporting to credit reporting agencies that the borrower made late payments on his mortgage loan in violation of provisions of the Fair Credit Reporting Act (FCRA) after the borrower agreed to the terms of an undisclosed settlement with the lone remaining defendant in the action.
October 31, 2022
Complaint Against Loan Servicer, LPI Insurers Rife With Time-Barred Claims

BOSTON — A federal judge in Massachusetts dismissed claims brought by a borrower alleging that her mortgage loan servicer and lender-placed insurers violated state, federal and common law by engaging in an illegal kickback scheme in which borrowers were forced to pay artificially inflated premiums for lender-placed insurance (LPI) policies, ruling that each of the borrowers’ claims was time-barred and not subject to tolling under the discovery rule.
October 26, 2022
Panel Rules On Judgment Barring Bank From Foreclosure Action Against Estate

SPRINGFIELD, Ill. — An Illinois appellate court affirmed in part a trial court’s judgment that the claim of a bank against the estate of a decedent mortgagor is statutorily time-barred under Illinois law, finding that the bank’s “failure to timely file a claim against decedent or his estate” prevents the bank from using estate assets to satisfy a debt.