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

Mealey's Mortgage Lending

December 22, 2023
CFPB, DOJ Sue Texas Developers, Lender Alleging Predatory Lending

HOUSTON — The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) sued a Texas developer and lender and its affiliates in federal court, claiming that they operate an illegal “bait and switch” land sales scheme that targets Hispanic borrowers and sets them up with loans they cannot afford.
December 22, 2023
Federal Class Complaint Accuses Navy Federal Of Biased Mortgage Denials

ALEXANDRIA, Va. — Navy Federal Credit Union “systematically discriminates against would-be borrowers by race,” two African-American women allege in a putative class complaint filed in a federal court in Virgina in which they claim that in 2022, a white person had a 75% chance of being approved for a conventional mortgage while Black applicants had less than a 50% chance of success.
December 21, 2023
4th Circuit Denies Lender Permission To Appeal Class Certification Ruling

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals has denied lender Mr. Cooper Group Inc. permission to appeal a lower court’s class certification ruling in a case brought by mortgagors who allege that they paid excess charges due to illegal kickbacks.
December 21, 2023
Mortgagors Suing Over Data Theft May Seek Only Declaratory, Injunctive Relief

MIAMI — A federal judge in Florida largely granted a motion to dismiss by loan servicers whose data was accessed and personally identifiable information (PII) was stolen, permitting the mortgagors to proceed only with their final claim for declaratory judgment and injunctive relief.
December 19, 2023
Judge Modifies Class Over Loan Servicer’s Alleged Kickback Scheme

BALTIMORE — After rejecting a trial plan as unworkable, a federal judge in Maryland modified a class action definition sua sponte after concluding that recent disclosures on how the class of individuals allegedly overcharged for mortgage services due to kickbacks would calculate damages left the original certified class unable to meet the adequacy and typicality requirements.
December 19, 2023
U.S. As Amicus Supports High Court Vacating New York Escrow Law Preemption Ruling

WASHINGTON, D.C. — The United States filed an amicus brief in the U.S. Supreme Court arguing that a ruling by the Second Circuit U.S. Court of Appeals that New York’s escrow-interest law is preempted by the National Bank Act (NBA) should be vacated for “the correct preemption inquiry [to occur] in the first instance.”
December 19, 2023
Hawaii Appeals Court Vacates Summary Judgment In Reverse Mortgage Foreclosure Case

HONOLULU — A Hawaii appellate panel vacated summary judgment for the lender in a reverse mortgage foreclosure case, finding that the mortgage company, which was not the original lender in the transaction, failed to show that its records were trustworthy.
December 18, 2023
Judge Won’t Reconsider 2021 Ruling Rejecting Claim That Foreclosure Was Time-Barred

BROOKLYN, N.Y. — New York’s Foreclosure Abuse Prevention Act (FAPA), implemented in December 2022, does not require a federal judge to reconsider a December 2021 grant of summary judgment to the holder of the mortgage who previously failed to foreclose on a property and determined that a letter sent a week before the statute of limitations expired was found to be “an affirmative act to decelerate the mortgage,” a federal judge in New York ruled, opining that the mortgagor still had legal options available and that the state court should decide this issue concerning state law.
December 18, 2023
Mortgagors File Amended Class Complaint Accusing PHH Of Pay-To-Pay Fees

CAMDEN. N.J. — Two women accusing a mortgage servicing company of illegally marking up fees for borrowers who remit payments online or over the phone filed an amended class complaint in a federal court in New Jersey seeking damages, including treble damages and other relief.
December 15, 2023
Judge Adopts Report Finding RESPA Letter Postage Satisfies Injury-In-Fact Standard

MIAMI — A federal judge in Florida adopted a magistrate judge’s recommendation that the court find that postage and copying costs associated with a notice-and-cure letter constituted an injury in fact and provided standing for the plaintiffs to proceed with their Real Estate Settlement Procedures Act (RESPA).
December 15, 2023
In Dispute Over HELOC Advertising, Arizona Federal Judge Again Dismisses

WASHINGTON, D.C. — Four months after his putative class action against a home equity lender was dismissed as untimely, a plaintiff saw his amended complaint again rejected by a federal judge in Arizona, who this time ordered that the case be closed.
December 14, 2023
Pretrial Conference Set In Suit To Halt Foreclosure After Claims Largely Dismissed

AUSTIN, Texas — A federal judge in Texas on Dec. 13 set an initial pretrial conference in a lawsuit by a Texas woman seeking to halt foreclosure of her home; the order came three weeks after the loan servicer’s motion to dismiss was granted, leaving only a portion of the plaintiff’s declaratory judgment claims.
December 14, 2023
Class Claims Over Timeliness Of Mortgage Payments Partially Survive Dismissal

EUGENE, Ore. — A federal judge in Oregon partially granted and partially denied dismissal of putative class claims under the Real Estate Settlement Procedures Act (RSPA) and Oregon law in a case accusing a mortgage servicer of incorrectly reporting a mortgagor’s payments as late and denied an alternative motion to strike the class allegations, finding that the request was filed too soon.
December 14, 2023
11th Circuit: Mid-Foreclosure Escrow Statements Were Not Discrete FDCPA Violation

ATLANTA — A mortgagor’s Fair Debt Collection Practices Act (FDCPA) claims against his mortgage servicer based on statements made by that company’s representative as part of a foreclosure action more than a year after it was first filed were time-barred as the statements were “not independently actionable” under the FDCPA, an 11th Circuit U.S. Court of Appeals panel ruled.
December 13, 2023
Kansas Couple Ask 10th Circuit To Revive Claims Over Disputed Mortgage Status

DENVER — A Kansas husband and wife who allege in a case referred to as “unusual” and “strange” that they have a lien on their home while their loan servicers claim that they own the house free and clear filed a reply brief in the 10th Circuit U.S. Court of Appeals arguing that summary judgment for the servicers must be reversed because a pretrial order that limited their claims and their Kansas Consumer Protection Act (KCPA) claim were subjected to “inappropriately strict construction” and the trial court “disregard[ed] . . . laws pertaining to the filing of documents necessary to affect title to real estate.”
December 11, 2023
Mortgagors Tell U.S. High Court N.Y. Escrow Law Is Not Preempted By Federal Law

WASHINGTON, D.C. — New York’s escrow-interest law was wrongly found by the Second Circuit U.S. Court of Appeals to be preempted by the National Bank Act (NBA) because the appellate panel’s test is “squarely reject[ed]” by 12 U.S. Code Section 25b, mortgagors argue in their petitioner brief filed Dec. 8 in the U.S. Supreme Court.
December 08, 2023
Default Entered Against Mortgage Lender In Class Action Alleging Kickbacks

BALTIMORE — A federal court in Maryland entered default against a mortgage lender facing class claims that it engaged in an illegal kickback scheme in response to a judge’s Dec. 1 order indicating that the lender missed the deadline to obtain new counsel or indicate why default should not be entered against it.
December 07, 2023
Court Dismisses Mortgage Borrower’s Suit Against Lender For Modification Dispute

SACRAMENTO, Calif. — A California federal magistrate judge on Dec. 6 docketed an order granting a mortgage borrower’s request to voluntarily dismiss her lawsuit accusing a lender of violating California’s unfair competition law (UCL) and other laws by not contacting her for years after her loan went into default following a modification request, one day after the magistrate recommended dismissing her suit.
November 29, 2023
On Remand, Parties Dispute Expert Exclusion Bids In RESPA Class Lawsuit

FRESNO, Calif. — Parties in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements are sparring in California federal court over expert testimony regarding whether the plaintiffs have standing under an economic harm theory.
November 29, 2023
5th Circuit Dismisses Borrower’s Appeal Of Dismissal Of ECOA Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Nov. 28 dismissed a borrower’s appeal challenging the dismissal of his lawsuit alleging that a lender violated the Equal Credit Opportunity Act (ECOA) by denying him a mortgage loan based on an allegedly incomplete loan application, noting that the borrower failed to file his appellant brief on time.
November 27, 2023
Condo Owner Dismisses Suit Against Mortgage Servicer After Settling FDCPA Claims

MIAMI — The owner of a condominium unit on Nov. 24 filed a notice of voluntary dismissal with prejudice of its class action complaint alleging that a mortgage servicer violated the Fair Debt Collection Practices Act (FDCPA) and state laws by allegedly including excessive, unauthorized and fraudulent fees in a payoff quote, just days after the parties notified a federal court in Florida that they had reached a settlement in the case.
November 21, 2023
Judge Denies Reconsideration Of Order Dismissing Remaining Claims Against Lenders

ST. LOUIS — A federal judge in Missouri has denied a motion to reconsider his order dismissing with prejudice the remaining claims against two mortgage companies asserted by self-represented litigants who alleged that one of the companies used bait-and-switch tactics to entice them into a loan forbearance program, reiterating his findings that the Real Estate Settlement Procedures Act (RESPA) does not apply to the loan in question, that the Coronavirus Aid, Relief and Economic Security Act (CARES Act) does not include a private right of action and that the Missouri Merchandising Practices Act (MMPA) does not apply to one of the companies as it is regulated by the Missouri Division of Finance.
November 21, 2023
Couple Sufficiently Alleges Facts To Support RESPA, Unfair Practices Claims

RALEIGH, N.C. — A North Carolina federal judge denied motions to dismiss filed by a mortgage lender and a realty company after determining that a couple has standing to allege that the companies engaged in an unlawful kickback scheme in which the realty company would steer all of its clients to the mortgage company for their loans and sufficiently allege facts in support of their claims for unfair trade practices and civil conspiracy.
November 21, 2023
District Court Erred In Finding Credit Bureau Did Not Report Inaccuracy, Borrower Says

CHICAGO — A district court erred in entering summary judgment in favor of a credit reporting bureau in a Fair Credit Reporting Act (FCRA) suit because the credit bureau inaccurately reported late payments on a borrower’s mortgage, the borrower says in a reply brief filed in the Seventh Circuit U.S. Court of Appeals.
November 21, 2023
3rd Circuit: Mortgagors Failed To Show Failed Foreclosure Suit Violated Pa. Law

PHILADELPHIA — A failed foreclosure lawsuit by a lender and loan servicer did not violate Pennsylvania’s Dragonetti Act as there was no showing that the filing of the case was improper, a Third Circuit U.S. Court of Appeals panel ruled, affirming a trial court’s summary judgment ruling for the lender and servicer.