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

Mealey's Mortgage Lending

February 05, 2024
Judge Denies Mortgage Servicer’s Motion To Dismiss Loan Modification UCL Suit

LOS ANGELES — A California federal judge granted in part and denied in part a mortgage loan servicer’s motion to dismiss a suit accusing it of improperly denying a borrower’s loan modification applications, finding that the plaintiff’s claims are not time-barred because she now alleges that she recently discovered that the servicer sent her statements with errors that contributed to the principal balance on her loan.
February 05, 2024
Pa. Superior Court Affirms Summary Judgment For PNC In Mortgage Foreclosure Suit

PHILADELPHIA — A Pennsylvania Superior Court panel in a nonprecedential decision affirmed a trial court’s summary judgment ruling for PNC Bank National Association in a mortgage foreclosure action in which the mortgagor alleged that PNC did not possess the original promissory note and summary judgment was granted while there were still “a genuine issue of material fact over the non-principal and interest damages.”
February 02, 2024
Split Maine High Court Vacates Mortgage Discharge Order In Foreclosure Suit

PORTLAND, Maine — A divided Maine Supreme Judicial Court affirmed a trial court’s ruling in a foreclosure that a default notice sent to a mortgagor was defective but vacated the portion of the judgment requiring the bank subsidiary to discharge the mortgage, citing Finch v. U.S. Bank, N.A.
January 31, 2024
Tennessee Federal Judge Approves $1.9M Redlining Settlement Between DOJ, Bank

MEMPHIS, Tenn. — A federal judge in Tennessee on Jan. 30 approved a consent order in which Patriot Bank agreed to resolve the U.S. Department of Justice’s allegations that it “engaged in a pattern or practice of unlawful redlining” by establishing a $1.3 million loan subsidy fund to increase access to mortgage, refinancing and similar services for residents of majority-Black and Hispanic neighborhoods in Memphis.
January 30, 2024
RESPA Case Against Mortgage Servicer Dismissed After Parties Reach Settlement

BALTIMORE — A federal magistrate judge in Maryland on Jan. 29 dismissed borrowers’ suit against their mortgage servicer, alleging violations of the Real Estate Settlement Procedures Act (RESPA) and state law claims after being advised by the parties that they had reached a settlement.
January 26, 2024
3 Complaints Consolidated That Accuse Navy Federal Of Biased Mortgage Denials

ALEXANDRIA, Va. — A federal judge in Virginia granted two motions to consolidate three putative class complaints accusing Navy Federal Credit Union of discriminating against individuals seeking mortgages based on race, appointed interim co-lead class counsel and ordered that those attorneys should handle any settlement discussions and pleadings.
January 26, 2024
Woman’s Lending Discrimination Claims Time-Barred, Fail, Judge Says

SAN FRANCISCO — A woman’s civil rights and fair housing claims stemming from a bank’s denial of her mortgage application are time-barred under precedent establishing that the statute of limitations runs from the date of the incident, while her equal credit claim is not sufficient, a federal judge in California said in granting a motion to dismiss.
January 26, 2024
Appellees Urge 2nd Circuit To Affirm Ruling In ERISA Mortgage-Backed Securities Row

NEW YORK — Fighting arguments that a pension fund’s investment in mortgage-backed securities (MBS) made the mortgages plan assets under the Employee Retirement Income Security Act, mortgage servicers told the Second Circuit Court of Appeals that “straightforward application of the governing regulation defeats” those claims.
January 25, 2024
Decertification Denied, Class Redefined In Mortgage Case Alleging Kickbacks

BALTIMORE — A federal judge in Maryland denied a mortgage servicer’s motion to decertify a class of borrowers suing over kickbacks allegedly paid by a title company to the servicer’s employees but amended the class definition to limit it to borrowers in certain states who paid title service charges in excess of $500 plus the cost of title insurance, opining that the new definition will “ensure that the predominance and adequacy requirements of [Federal Rule of Civil Procedure 23] remain satisfied.”
January 25, 2024
Firm, Professor Back BOA’s Arguments In High Court N.Y. Escrow Law Preemption Case

WASHINGTON, D.C. — A law professor filed an amicus curiae brief in the U.S. Supreme Court on Jan. 24, joining amicus Washington Legal Foundation in supporting Bank of America N.A.’s (BOA) arguments in an appeal concerning whether the National Bank Act (NBA) preempts New York’s escrow-interest law; BOA in its brief tells the high court justices that the preemption exists as “[s]tates cannot control national-bank powers.”
January 24, 2024
Divided Maine Supreme Court Upends Foreclosure Notice Discharge Precedent

AUGUSTA, Maine — Stare decisis does not preclude revising recent opinion requiring discharge of a mortgage when a foreclosure notice included even a simple typographical error, a position that deviated from previous precedent and was not adopted by any other courts, a divided Maine Supreme Judicial Court said.
January 24, 2024
Judge Says Loan Applicants Aren’t Purchasers Under Law, Didn’t Rely On Statements

PHILADELPHIA — Mortgage applicants who received what they admit was a conditional approval are not purchasers and, therefore, are not protected by Pennsylvania’s consumer protection law and lack any evidence of reliance on misstatements about the loan that could form the basis of a fraud claim, a federal judge in Pennsylvania said in granting summary judgment.
January 22, 2024
Consolidated Mr. Cooper Data Breach Plaintiffs To Submit Proposed Deadlines

DALLAS — Eight days after 20 putative class actions over a data breach experienced by Mr. Cooper Group Inc. were consolidated in Texas federal court, the judge granted the mortgage servicer’s motion for relief from the impending deadline for it to respond to the complaint against it, directing the parties to submit an agreed-upon schedule with proposed deadlines for filing motions, an amended complaint and other items.
January 19, 2024
Ohio Appeals Panel Upholds Class Certification In Mortgage Recording Case

CINCINNATI — Certification of a class in a case seeking damages for violations of Ohio’s mortgage-recording statute that occurred allegedly in part due to the coronavirus pandemic was appropriate as the lead plaintiff and class have standing, common questions predominate and amendments to the statute that barred class recovery do not impact this class as the amendments did not take effect until two months later, an Ohio appellate panel ruled.
January 19, 2024
Tennessee Bank Agrees To Pay $1.9M To Resolve Justice Department’s Redlining Suit

MEMPHIS, Tenn. — Patriot Bank has agreed to pay $1.9 million to resolve the U.S. Department of Justice’s allegations that it “engaged in a pattern or practice of unlawful redlining” by avoiding providing mortgages services to Memphis neighborhoods that are majority Black and Hispanic, according to a consent order filed in a federal court in Tennessee.
January 17, 2024
High Court Told ‘Chaos’ Will Ensue ‘In A World Without Chevron’ Deference

WASHINGTON, D.C. — The U.S. Supreme Court was told Jan. 17 that “chaos” will ensue “in a world without Chevron” deference by government attorneys, who urged it to apply stare decisis and uphold Chevron, which is being challenged in two cases arising out of federal fishing regulations.
January 17, 2024
Hawaii Panel Allows Some Claims Against Lender’s Attorney In Reverse Mortgage Case

HONOLULU — Two borrowers suing over foreclosure proceedings involving their reverse mortgages may proceed with certain fraud and elder abuse claims against their lender’s attorney and his firm, a Hawaii appellate panel ruled, opining in part that “the litigation privilege is not an absolute bar against an action by a borrower against a foreclosing lender’s attorney arising out of the attorney’s fraud on the court in a prior foreclosure action.”
January 17, 2024
Confusion Doesn’t Save Mortgage Claims, Servicer Tells 9th Circuit

RIVERSIDE, Calif. — Borrowers’ contract claims are time-barred where they knew that a problem existed with their loan but failed to further investigate, and confusion over who serviced the product cannot form the basis of statutory or implied covenant claims, a mortgage services company tells the Ninth Circuit U.S. Court of Appeals.
January 16, 2024
4th Circuit Denies Borrowers Permission To Appeal Amendment Of Class Definition

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals has denied borrowers’ petition for permission to appeal a Maryland federal judge’s December sua sponte ruling modifying the class definition in their suit alleging that they were overcharged for mortgage services as a result of a kickback scheme.
January 12, 2024
Borrower Seeks Preliminary Approval Of Junk Fees Pact In Nearly Decade-Old Case

SACRAMENTO, Calif. — A mortgagor who filed a class complaint alleging unlawfully marked-up fees against Ocwen Financial Corp. and Ocwen Loan Servicing LLC (together, Ocwen) in 2014, in part under the Racketeer Influenced and Corrupt Organizations Act (RICO) and California’s unfair competition law (UCL), filed a motion in a federal court in California seeking preliminary approval of a class settlement that will provide fee reimbursements to nationwide settlement class members and fee reversals or credits to members of a California settlement subclass.
January 11, 2024
Reverse-Mortgage Borrower Seeks Documents As Dismissal Motion Is Pending

CENTRAL ISLIP, N.Y. — Documents sought from one of the defendants in putative class case over fees and other charges for reverse mortgages complied with two prior courts orders as that defendant’s bankruptcy plan administrator consented to production of the documents and the documents being sought have not already been requested or produced in a separate case over property taxes against the same defendants, a borrower argues in a supplemental status report filed in a federal court in New York.
January 10, 2024
California Federal Judge Dismisses Amended Foreclosure Suit, This Time With Prejudice

CONCORD, Calif. — A federal judge in California has dismissed without leave to amend a lawsuit by homeowners alleging that their mortgage servicer violated federal and state statutes when it foreclosed on their property, finding that the Truth in Lending Act (TILA) claim in the second amended complaint remains time-barred and that the plaintiffs failed to state a claim for their various state law claims.
January 10, 2024
Judge Grants Summary Judgment In Case Involving Improperly Discharged Mortgage

BOSTON — A bank is entitled to summary judgment in its action seeking to strike the discharge of a mortgage, a federal judge in Massachusetts said after finding sufficient evidence that the discharge was entered in error and that nothing precluded the court from concluding otherwise.
January 09, 2024
Case Stayed After Borrowers, Servicer Reach Settlement In RESPA Violation Suit

MIAMI — A federal judge in Florida, acting sua sponte, stayed a suit filed by borrowers alleging that a mortgage servicer violated the Real Estate Settlement Procedures Act (RESPA) when filing a foreclosure suit against them and ordered the suit to be administratively closed after the parties notified the court that they had reached a settlement.
January 04, 2024
Homeowner Alleges Bank Improperly Denied Mortgage Relief Needed During COVID-19

JACKSON, Miss. — A Mississippi homeowner sued an Illinois mortgage servicer in Mississippi federal court alleging violations of the Fair Housing Act and Equal Credit Opportunity Act after the servicer foreclosed on her home without offering modifications to her mortgage terms the homeowner needed after experiencing income loss due to her divorce and the COVID-19 pandemic.