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

Mealey's Mortgage Lending

September 14, 2022
Only Borrower’s Negligence Claim Survives Dismissal In Reverse Mortgage Suit

BROOKLYN, N.Y. — A federal judge in New York on Sept. 12 substantially granted a mortgage lender’s motion to dismiss in a borrower’s lawsuit alleging that the lender breached the terms of a reverse mortgage contract by misrepresenting the status of the reverse mortgage and allowing the borrower’s home to be sold at foreclosure, ruling that only the borrower’s claim for negligence may proceed.
September 14, 2022
Wells Fargo To Pay $94M To Settle Class Claims Over COVID-19 Forbearance Program

COLUMBUS, Ohio — Wells Fargo Bank NA will pay $94 million to end a mortgage borrower class action alleging that the lender violated state and federal law by engaging in a scheme to place borrowers into a forbearance program during the COVID-19 pandemic, according to a motion for preliminary approval of the proposed settlement filed by the borrower on Sept. 9 in Ohio federal court.
September 02, 2022
Loan Servicer Awarded $37,545.04 In Fees, Property Taxes In Foreclosure Suit

ST. THOMAS, Virgin Islands — A federal judge in the U.S. Virgin Islands on Aug. 31 awarded a mortgage loan servicer nearly the entire amount of attorney fees and property tax expenses it sought, post-judgment, in a foreclosure action, ruling that, for the most part the fees and expenses sought were in line with Virgin Islands precedent.
September 01, 2022
Mortgage Loan Servicer’s Trustee Sale Notices Did Not Accelerate Loan

PHOENIX — A mortgage loan servicer did not accelerate a borrower’s debt by recording and serving the borrower with a notice of trustee’s sale because those actions, under Arizona law, do not accelerate the debt as a matter of law, the Arizona Supreme Court ruled in affirming a state appellate court’s ruling in favor of the loan servicer.
August 26, 2022
Borrower’s Claims In Force-Placed Insurance Suit Dismissed As Conclusory

ST. CROIX, Virgin Islands — A federal judge in the Virgin Islands on Aug. 25 ruled that a borrower has failed to sufficiently state any of her 15 claims against her mortgage loan servicer to support her allegations that the loan servicer breached the terms of a mortgage agreement and violated federal and Virgin Islands law by failing to cover property damage claims under the terms of a force-placed insurance policy the servicer required the borrower to maintain.
August 26, 2022
Maryland Panel Overturns Order Dismissing Borrower Lawsuit With Prejudice

BALTIMORE — A Maryland trial court erred in dismissing a borrower’s case against several parties in connection with a foreclosure proceeding and the filing of erroneous documents in connection with the proceeding with prejudice under state law because the borrower had sought voluntary dismissal of her action without prejudice, a Maryland Court of Appeals panel ruled Aug. 23 in reversing and remanding.
August 26, 2022
Borrower’s FCRA Suit Administratively Terminated After Settlement Reached

KANSAS CITY, Kan. — Without providing further detail, a federal judge in Kansas on Aug. 18 issued an order administratively terminating a borrower’s Fair Credit Reporting Act (FCRA) lawsuit against Equifax Information Services LLC without prejudice after the parties to the litigation filed a notice stating that they agreed to an undisclosed settlement.
August 26, 2022
4th Circuit Will Not Rehear Borrower’s Delayed Appeal In Foreclosure Suit

RICHMOND, Va. — Without providing detail, the Fourth Circuit U.S. Court of Appeals on Aug. 17 denied a borrower’s petition for rehearing and rehearing en banc of an appeal of a federal district court’s orders dismissing two parties from a lawsuit alleging that the parties, as well as a third defendant, violated the terms of an automatic stay when they foreclosed on her mortgage refinance loan while the borrower was in the midst of Chapter 13 bankruptcy proceedings.
August 24, 2022
4th Circuit: Home Defects Details Don’t Trigger Arbitration Of Mortgage Claims

RICHMOND, Va. — Mobile homeowners’ inclusion of details related to already settled construction defects claims in an amended complaint against the seller, lender and home insurance provider arising out of the mortgage loan for their home does not trigger the arbitration agreement the homeowners signed at the time of purchase as the information was necessary to add context to those claims, a Fourth Circuit U.S. Court of Appeals panel ruled Aug. 19, affirming a trial court’s denial of a motion to stay and compel arbitration.
August 24, 2022
Rejection Of Property Buyer’s Bid Allowable Under Idaho High Court Precedent

BOISE, Idaho — An Idaho trial court did not err in determining that a trustee for certain real property and a company hired to oversee a foreclosure auction properly rejected a real estate purchaser’s bid for the property because the court properly relied on state Supreme Court precedent in reaching its decision and in determining that the trustee and company were not required to postpone the auction to allow the purchaser to pay for its bid, the Idaho Supreme Court ruled Aug. 22 in affirming.
August 16, 2022
Borrowers Reach Proposed Settlement With Mortgage Loan Servicer In FCRA Suit

CAMDEN, N.J. — Borrowers in a Fair Credit Reporting Act (FCRA) lawsuit over alleged erroneous accounts reported by credit-reporting agency Equifax Information Services LLC on their credit reports stemming from the borrowers’ filing for Chapter 13 bankruptcy filed a notice of settlement on Aug. 11 in New Jersey federal court, stating that they had agreed to the terms of a proposed settlement with the lone remaining defendant in the action.
August 16, 2022
Nevada High Court: Lender Entitled To Receiver After Commercial Loan Default

CARSON CITY, Nev. — In an issue of first impression, the Nevada Supreme Court on Aug. 11 ruled that a state trial court erred in ruling that a commercial mortgage lender was not entitled to the appointment of a receiver after borrowers defaulted on loans for the purchase of multifamily apartment complexes because the “appointment of a receiver is not subject” to the trial court’s discretion.
August 15, 2022
Mortgagors Argue ‘Manifest Injustice’ In Appeal Over Class RESPA Suit

SAN FRANCISCO — Seeking reversal of a decision denying modification of a final pretrial order (PTO), mortgagors in a long-running Real Estate Settlement Procedures Act (RESPA) class action over captive reinsurance agreements argue in a July 25 appellant brief before the Ninth Circuit U.S. Court of Appeals that a California federal court’s ruling “resulted in manifest injustice and was tantamount to case-ending sanctions.”
August 12, 2022
Panel: Note Identifies Lender, Gives Standing To Pursue Nonjudicial Foreclosure

AUSTIN, Texas — A First District Texas Court of Appeals panel on Aug. 11 affirmed a trial court’s grant of summary judgment in favor of a mortgage lender and loan servicer in a foreclosure dispute, ruling that the lender/servicer provided sufficient evidence to show that it was both the owner and holder of the note.
August 11, 2022
Expert Testimony Properly Excluded In Discriminatory Lending Suit, Banks Argue

CHICAGO — A federal district court properly excluded testimony on behalf of Cook County, Ill., by two experts the county sought to use to prove that Bank of America Corp. and other banks engaged in a massive discriminatory and predatory lending scheme against minority borrowers in violation of the Fair Housing Act of 1968 (FHA) because neither expert’s testimony was reliable under the framework set forth in Daubert v. Merrell Dow Pharmaceuticals Inc., the banks argue in an Aug. 2 appellee brief filed in the Seventh Circuit U.S. Court of Appeals.
August 10, 2022
Judge Sides With Loan Servicer In Settlement Agreement Breach Suit

AUGUSTA, Ga. — A federal judge in Georgia on Aug. 8 dismissed borrowers’ claims against their mortgage loan holder alleging that the loan servicer violated the terms of a settlement agreement by failing to mark their account as current, ruling that the servicer performed each of its required duties under the terms of the settlement.
August 08, 2022
Amicus: Precedent Misapplied In Granting Lender Summary Judgment In FCA Suit

CHICAGO — A federal judge in Indiana erred in granting summary judgment against a relator in a False Claims Act (FCA) lawsuit in which the relator alleged that a mortgage lender fraudulently approved insurance for Federal Housing Authority Administration (FHA) loans that did not meet U.S. Department of Housing and Urban development requirements because the judge improperly ruled that the relator failed to plead the elements of materiality and causation in stating her claims, the U.S. government argues in an Aug. 1 brief as amicus curiae filed in the Seventh Circuit U.S. Court of Appeals.
July 28, 2022
Trident Mortgage To Pay More Than $20M To Resolve Lending Discrimination Claims

PHILADELPHIA — A mortgage lender will pay more than $20 million to increase credit opportunities in the Philadelphia metropolitan area as part of a consent order the lender reached with the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Justice stemming from the lender’s alleged pattern of discriminatory lending known as redlining, according to court documents filed in Pennsylvania federal court on July 27.
July 22, 2022
Summary Judgment Ruling In Wrongful Foreclosure Suit Appealed To 5th Circuit

HOUSTON — A borrower filed a notice of appeal on July 1 in Texas federal court, stating that she will appeal a Texas federal court judge’s grant of summary judgment in favor of her mortgage lender on her wrongful foreclosure claim.
July 22, 2022
Borrower Claims In Lawsuit Stemming From Mortgage Foreclosure Dismissed

NEWARK, N.J. — A federal judge in New Jersey on July 19 ruled that a borrower has failed to sufficiently plead any of its claims against parties involved in foreclosure proceedings stemming from the borrower’s default on his mortgage loan.
July 21, 2022
Panel Lacks Jurisdiction To Hear Appeal In Foreclosure Actions

RICHMOND, Va. — A Fourth Circuit U.S. Court of Appeals panel on July 19 ruled that it lacked the necessary jurisdiction to hear a borrower’s appeal of a federal district court’s orders dismissing two parties from a lawsuit alleging that the parties, as well as a third defendant, violated the terms of an automatic stay when they foreclosed on her mortgage refinance loan while the borrower was in the midst of Chapter 13 bankruptcy proceedings, because the borrower filed her appeal seven years after the district court entered final judgment.
July 21, 2022
Ocwen Dodges Sanctions In Discovery Dispute But Must Submit Some Loan Documents

INDIANAPOLIS — In a mixed ruling for Ocwen Loan Servicing LLC, an Indiana federal magistrate judge on July 7 ordered the company to turn over about half of the documents that it withheld from discovery requests submitted by a customer suing it for real estate settlement and debt collection practices.
July 20, 2022
Dismissal Of Claims In Borrower Suit Over Home Seizure Overturned On Appeal

SAN FRANCISCO — Although a federal district court erred in dismissing certain claims brought by a borrower against his mortgage loan servicer and one of its agents on claims that they forcibly entered his home while he was at work and took possession of the property and certain of the borrower’s personal belongings while the judicial foreclosure proceedings were ongoing, the court did not err in granting summary judgment in favor of the loan servicer on the borrower’s claim for conversion, a Ninth Circuit U.S. Court of Appeals panel ruled July 15 in affirming in part and reversing in part.
July 20, 2022
Judge Orders Borrower’s Discriminatory Lending Claim Dismissed With Prejudice

PHILADELPHIA — A federal judge in Pennsylvania on July 5 issued a two-page order dismissing an African-American borrower’s race discrimination claim against his commercial mortgage lender with prejudice, ruling that the borrower has failed to sufficiently state a claim for relief.
July 18, 2022
Panel Partially Sends Foreclosure Proceeds Dispute Back To District Court

NEW YORK — A Second Circuit U.S. Court of Appeals panel on July 14 partially returned a commercial mortgage loan foreclosure proceeds distribution dispute to federal district court to make a determination in the first instance regarding the proper manner of payment “of Interest on Advances.”