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Mealey's Mortgage Lending

March 14, 2022
Borrower’s Take On Trustee’s Fiduciary Duty Not In Line With Virginia Precedent

RICHMOND, Va. — A federal district court did not err in ruling that a substitute trustee in a foreclosure dispute was fraudulently joined in the litigation because a borrower has failed to provide any controlling precedent to support his construction of the trustee’s implied fiduciary obligations in the underlying foreclosure proceedings after the execution of a loan modification agreement (LMA), a Fourth Circuit U.S. Court of Appeals panel ruled Feb. 24 in affirming in an unpublished per curiam summary order.
March 10, 2022
Mortgagors Appeal Class RESPA Suit Over Captive Reinsurance To 9th Circuit

FRESNO, Calif. — Following a joint stipulation of dismissal entered shortly before a jury trial was scheduled to start in California federal court, mortgagors who initiated a long-running Real Estate Settlement Procedures Act (RESPA) class action over captive reinsurance agreements on March 2 filed a notice of appeal to the Ninth Circuit U.S. Court of Appeals.
March 09, 2022
Dismissal Of RICO Claims Sought In Suit Over Mortgage Loan, Force-Placed Insurance

SACRAMENTO, Calif. — Arguing that the complaint fails to allege violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), a second defendant on March 7 moved in California federal court for dismissal of all claims against it in a putative class action that alleges unfair and deceptive practices connected to home mortgage loan servicing and that a reinsurance program does not serve a legitimate purpose.
March 08, 2022
Borrower’s Claims In Discriminatory Lending Suit Don’t Pass Muster, Lender Argues

PHILADELPHIA — Dismissal of an African-American borrower’s discriminatory lending lawsuit against his commercial mortgage lender is necessary because he has failed to sufficiently plead that the lender violated Pennsylvania’s unfair trade practices statute or that the lender’s alleged failure to notify the borrower that his loan included a maturity date, which resulted in unnecessary legal fees and a refinance of the loan, supports a showing of an intent to discriminate, the lender argues in a March 3 motion to dismiss filed in Pennsylvania federal court.
February 25, 2022
Loan Default Precluded Borrower From Bringing Contract Claim, Panel Rules

SAN FRANCISCO — A federal district court did not err in granting summary judgment on behalf of a mortgage lender and the assignee of the note in a breach of contract dispute stemming from the foreclosure on a mortgage loan because the lower court correctly determined that a borrower was precluded from bringing his breach of contract claim since, inter alia, he had defaulted on the loan by failing to make the necessary monthly payments since 2011, a Ninth Circuit U.S. Court of Appeals panel ruled Feb. 23 in affirming in an unpublished memorandum opinion.
February 25, 2022
Wells Fargo Named In Borrower’s Racial Bias Suit Over Lending Practices

SAN FRANCISCO — An African-American borrower sued Wells Fargo Bank NA and its parent company in California federal court on Feb. 17, alleging that the defendants engaged in racial redlining and other discriminatory measures against minority home loan borrowers in violation of federal law.
February 24, 2022
Split Panel Partly Overturns Dismissal Of RESPA Claims In Loan Servicing Suit

RICHMOND, Va. — In a partially divided opinion, a Fourth Circuit U.S. Court of Appeals panel on Feb. 22 ruled that although a federal district court correctly ruled that a borrower’s letter to her mortgage loan servicer challenging an adverse entry on the borrower’s credit report did not qualify as a qualified written request (QWR) under the Real Estate Settlement Procedures Act (RESPA) and Consumer Financial Protection Bureau (CFPB) Regulation X, it erred in determining that another borrower’s letter to the same loan servicer was not a QWR when it granted the loan servicer’s motion to dismiss.
February 24, 2022
Fannie Mae’s Nonjudicial Foreclosures Protected, Fannie Mae, FHFA Argue

WASHINGTON, D.C. — A federal circuit court did not err in affirming a federal district court’s dismissal of borrowers’ class claims for violation of their right to due process against the Federal Housing Finance Agency (FHFA) and Fannie Mae over their handling of nonjudicial foreclosures, and the appellate court’s decision does not conflict with the rulings of any other federal appellate court, the FHFA and Fannie Mae argue in a Feb. 9 response brief filed in the U.S. Supreme Court.
February 24, 2022
Panel: Arbitration Of Borrower’s Set-Off Claims Not Allowed Under Dodd-Frank

RICHMOND, Va. — A provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act that amended the Truth In Lending Act (TILA) precludes a bank from applying predispute arguments that required arbitration of a borrower’s set-off claims related to residential mortgage loans against the bank because the arbitration agreement in question was not formed until after the provision’s effective date, a Fourth Circuit U.S. Court of Appeals panel held Feb. 15 in a 2-1 ruling affirming in part and reversing in part.
February 22, 2022
Loan Servicer’s Debt Collection Efforts Violated RESPA, FDCPA, Borrowers Say

CINCINNATI — Borrowers sued their mortgage loan servicer and the assignee of their mortgage loans in Ohio federal court on Feb. 18, alleging that the defendants violated the Real Estate Settlement Procedures Act (RESPA) and the Fair Debt Collection Practices Act (FDCPA) by seeking to foreclose on a second mortgage loan that the borrowers believed was part of a loan modification the borrowers obtained for a first mortgage on their home.
February 17, 2022
Panel Upholds Dismissal Of Abandoned Contract Claim In Foreclosure Dispute

ATLANTA — A federal district court did not err in dismissing a borrower’s breach of contract claim against parties in a lawsuit stemming from the foreclosure sale of property the borrower owned because the claim was contradictory in nature and he abandoned it on appeal, an 11th Circuit U.S. Court of Appeals panel ruled Feb. 15 in a per curiam opinion.
February 16, 2022
Loan Servicer: Borrowers’ Reading Of FDCPA In Convenience Fee Suit Illogical

SAN FRANCISCO — A federal district court did not err in dismissing a lawsuit brought by borrowers who alleged that their mortgage loan servicer violated provisions of the Fair Debt Collection Practices Act (FDCPA) by charging them convenience fees for making their loan payments online or over the telephone because nothing in the statute bars the loan servicer from charging such fees, the loan servicer argues in a Feb. 14 appellee brief filed in the Ninth Circuit U.S. Court of Appeals.
February 15, 2022
County’s FHA Claims Do Not Survive Summary Judgment In Predatory Lending Lawsuit

CHICAGO — A federal judge in Illinois on Feb. 10 ruled that Cook County, Ill., has failed to sufficiently plead a causal connection between the alleged discriminatory and predatory lending practices of Bank of America Corp. and several of its related entities (collectively, Bank of America) and the injuries the county sustained as a result of Bank of America’s alleged practices in stating its claims for violation of the Fair Housing Act of 1968 (FHA).
February 14, 2022
Panel Rejects Class Member’s Objections To Settlement In Loss Mitigation Suit

RICHMOND, Va. — In what it deemed an issue of first impression in the circuit, a Fourth Circuit U.S. Court of Appeals panel on Feb. 10 ruled that a federal magistrate judge did not lack jurisdiction to approve a consumer class action settlement between borrowers and mortgage loan servicer Nationstar Mortgage LLC over its handling of loss mitigation applications, joining with all other federal circuit courts that have addressed the issue of whether a magistrate judge has jurisdiction to approve a class action settlement even though an absent class member objected to the magistrate judge overseeing the settlement.
February 14, 2022
Borrower: Claims In Wrongful Foreclosure Suit Not Barred By Judicial Estoppel

SAN DIEGO — A borrower’s claims against her mortgage loan servicer in a wrongful foreclosure action are not subject to judicial estoppel based on the borrower’s alleged failure to notify a bankruptcy court of her claims against the loan servicer because her claim arose more than 3-1/2 years after the bankruptcy filing, the borrower argues in a Jan. 31 brief in opposition to the loan servicer’s motion for judgment on the pleadings filed in California federal court.
February 14, 2022
Mortgage Lender’s Dismissal Bid A ‘Rerun’ Of Prior Motion, Borrower Argues

PORTLAND, Ore. — Calling her mortgage lender’s motion to dismiss a “rerun” of its prior motion, a borrower argues in a Jan. 4 opposition brief filed in Oregon federal court that dismissal of her amended complaint alleging that the lender mishandled her mortgage loan application, causing her to lose out on the purchase of a home, is not warranted because the lender “recirculates virtually the same arguments it made previously,” which were substantially rejected.
February 08, 2022
Borrower Claims Against Lender In Loan Modification, Foreclosure Suit Dismissed

BALTIMORE — Although a borrower has sufficiently alleged causation in alleging that his mortgage lender and its holding company breached the terms of the parties’ mortgage loan and violated Maryland law in failing to provide the borrower with a loan modification after defaulting on his loan, the borrower has failed to properly plead any of the elements of his claims against the defendants, a federal judge in Maryland ruled Feb. 4 in granting the defendants’ motion to dismiss and denying the borrower’s motion for leave to file an amended complaint.
February 07, 2022
9th Circuit: Foreclosure Case Wrongly Removed To California Federal Court

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 25 said a federal judge in California erred when he denied a request by two plaintiffs to remand their wrongful foreclosure claims to the state court in which the complaint was filed.
February 04, 2022
Equifax, Trans Union Named In Borrowers’ FCRA Suit Over Incorrect Credit Reports

CAMDEN, N.J. — Two credit reporting agencies (CRAs) and a mortgage lender violated provisions of the Fair Credit Reporting Act (FCRA) by failing to properly investigate and correct disputes filed by a borrower who alleges that the CRAs incorrectly listed her Chapter 13 bankruptcy and missed mortgage loan payments on her credit reports, even though she was permitted to sell her home free and clear of any liens and was discharged from her bankruptcy, the borrower alleges in a Feb. 3 complaint filed in New Jersey federal court.
February 03, 2022
Borrowers’ Claims Against Loan Originator Over Escrow Dispute Survive Dismissal

CINCINNATI — Borrowers have pleaded their state, federal and common-law claims against their mortgage loan servicer over its alleged mishandling of their mortgage escrow account with enough sufficiency to survive dismissal at this point in the litigation, a federal judge in Ohio ruled Feb. 1 in denying the loan servicer’s motion to dismiss.
February 03, 2022
Parties Agree To Dismissal Of Mortgagors’ Class RESPA Suit Over Captive Reinsurance

FRESNO, Calif. — The parties in a long-running Real Estate Settlement Procedures Act (RESPA) class action over captive reinsurance agreements on Feb. 2 filed a stipulation and proposed order for entry of judgment dismissing the case for lack of standing; a jury trial bifurcated into liability and damages phases is otherwise scheduled to start Feb. 15 in California federal court.
February 02, 2022
Class Decertification Denied In Mortgagors’ RESPA Suit Over Captive Reinsurance

FRESNO, Calif. — A California federal judge on Jan. 31 issued two orders in a long-running class action over captive reinsurance agreements that is set for a jury trial in February, denying without prejudice a motion to decertify the class TransUnion LLC v. Ramirez and partly granting and partly denying the defendants’ motion in limine as to calculating and proving damages in the Real Estate Settlement Procedures Act (RESPA) case.
January 31, 2022
Editor’s Note

The journalists and staff of Mealey’s Litigation Reports are saddened by the passing of co-founder Michael P. Mealey. He was a respected member of the newsletter community, being named publisher of the year by the National Newsletter Association and president of the National Newsletter Association. Mike and Judy Mealey started Mealey Publications Inc. in 1984. As president, Mike grew the Mealey’s Litigation Report portfolio, introduced email news bulletins and electronic CD formats and launched a continuing legal education conference business. Mealey’s was sold to LexisNexis in 2000. We hope to carry on his journalistic curiosity and integrity in the titles we continue to publish today under his name.
January 28, 2022
Waiver Of Continuing Violations Doctrine Argument Dooms Loan Purchasers’ Appeal

NEW YORK — A federal district court did not err in dismissing loan purchasers’ breach of contract claims against JPMorgan Chase Bank NA and two of its related entities in a mortgage loan purchase agreement (MLPA) dispute because the loan purchasers waived their continuing violations doctrine argument by failing to raise it in the district court, a Second Circuit U.S. Court of Appeals panel ruled Jan. 25 in affirming.
January 21, 2022
CRAs Hit With FCRA Suit Over Failure To Cure Mortgage Loan Dispute

CAMDEN, N.J. — Three credit reporting agencies (CRAs) violated provisions of the Fair Credit Reporting Act (FCRA) by improperly reporting borrowers’ mortgage loan as delinquent, even though it was not and by failing to correct the error after they were notified via dispute letter, the borrowers allege in a complaint filed Jan. 19 in New Jersey federal court.