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

Mealey's Mortgage Lending

November 20, 2023
Florida Federal Judge Approves $9M Settlement Between DOJ, Bank On Redlining Claims

JACKSONVILLE, Fla. — A federal judge in Florida has approved a consent order under which Ameris Bank agrees to pay $9 million to resolve the U.S. Department of Justice’s (DOJ) allegations that it engaged in a pattern or practice of redlining in predominately Black and Hispanic neighborhoods in Jacksonville.
November 20, 2023
Louisiana High Court Refuses To Review Ruling In Suit Alleging Insured Stole Files

NEW ORLEANS — The Louisiana Supreme Court refused to disturb a Louisiana appeals court’s finding that a residential mortgage broker’s electronic loan files are “tangible” under state law and, therefore, can be defined as “‘property’ that is susceptible to ‘loss of use’” under a competitor’s business liability insurance policy, allowing to stand the lower court’s reversal of a summary judgment ruling in favor of an insurer that intervened in the broker’s lawsuit alleging that its insured used stolen files to broker mortgage loans for its customers.
November 20, 2023
Lender Urges 4th Circuit To Review Class Certification In Alleged Kickbacks Case

RICHMOND, Va. — Review of a class certification ruling by a trial court in a case brought by mortgagors who allege that they paid excess charges due to illegal kickbacks should occur as the borrowers have failed to show that damages can be measured on a classwide basis, lender Mr. Cooper Group Inc. argues in its Nov. 17 reply brief filed in the Fourth Circuit U.S. Court of Appeals.
November 17, 2023
Nationstar Granted Dismissal Of Claims That It Unjustly Denied COVID-19 Aid

ALLENTOWN, Pa. — A federal judge in Pennsylvania granted a loan servicer’s motion to dismiss putative class claims accusing it of denying a borrower a COVID-19 loss mitigation option on the ground that it would not have reduced the principal and interest portions of his Federal Housing Administration (FHA) mortgage, opining in a footnote that the borrower failed to “adequately plead a violation.”
November 17, 2023
$3.58M Settlement Granted Preliminary Approval In Mortgage Pay-To-Pay Suit

WASHINGTON, D.C. — A federal judge in the District of Columbia granted preliminary approval of a $3,587,254 class settlement to be paid by Nationstar Mortgage LLC, doing business as Mr. Cooper, to end a complaint over the company’s practice of charging mortgagors “convenience fees” to pay their mortgage over the phone.
November 17, 2023
Judge Dismisses Unfair Practices Claims For Lender’s Inquiries About Ex

SAN DIEGO — A California federal judge granted a mortgage lender’s motion to dismiss a woman’s suit accusing it of allegedly harassing her and accusing her of mortgage fraud in violation of the California debt collection law and unfair competition law (UCL) by sending her and her accountant questions about her former husband, alimony payments and finances, with the judge finding that debt collection claims don’t apply because she had no outstanding debt at the time.
November 14, 2023
Judgment Issued For Mortgagee In Row With Estate Administrator Over Fire Loss

PHILADELPHIA — A Pennsylvania federal judge granted judgment in favor of a mortgage company in an estate administrator’s breach of contract suit against it over failure to return $312,034.34 in fire loss draft funds to the estate, finding that because the company’s limited time offer to settle the loan balance did not include an agreement to return the loss draft funds, the administrator failed to prove his breach of contract claim.
November 13, 2023
Class Claims ‘Pure Profit’ Fees Tacked On After Condo Foreclosure Sale

MIAMI — A mortgage servicer violated the Fair Debt Collection Practices Act (FDCPA) and state laws when it allegedly included excessive, unauthorized and fraudulent fees in a payoff quote that were “nothing more than pure profit,” the owner of a condominium claims in a class action filed in a federal court in Florida.
November 13, 2023
Counsel Exits Case After Citing Lender-Client’s Inability To Pay

BALTIMORE — A federal judge in Maryland granted a law firm’s motion to withdraw as counsel after it told the judge that its client — a mortgage lender facing claims that it engaged in an illegal kickback scheme — lacked the assets or resources required to continue paying it for its services.
November 10, 2023
Borrowers Voluntarily Dismiss UCL Claim Against Mortgage Servicer, Beneficiary

SAN FRANCISCO — Two borrowers who were facing foreclosure due to a severely delinquent loan filed notice in California federal court of voluntary dismissal of their claim against a mortgage loan servicer and beneficiary for violation of California’s unfair competition law (UCL) after a judge dismissed their other federal and California law claims on statute of limitations grounds and for failure to state a claim.
November 06, 2023
U.S. Supreme Court Hears Arguments In Appeal Over FCRA And Sovereign Immunity

WASHINGTON, D.C. — Congress did not waive the United States’ sovereign immunity when it amended the Fair Credit Reporting Act (FCRA) to provide that an individual who violates the FCRA is liable for monetary damages, the assistant to the solicitor general told the U.S. Supreme Court Nov. 6 during oral arguments in an appeal concerning a borrower’s attempt to sue the U.S. Department of Agriculture (USDA) Rural Development Rural Housing Service for allegedly misrepresenting that he was past due on his mortgage.
November 06, 2023
Split Panel Affirms Dismissal Of UCL Suit Against Unlicensed Mortgage Lender

SAN DIEGO — A split California appellate panel on Nov. 3 affirmed the dismissal of a couple’s putative class action against a mortgage lender that issued them a $550,000 home loan while unlicensed to issue loans in California, ruling that the couple failed to plead an injury establishing standing under California’s unfair competition law (UCL), while a dissenting justice said the couple’s UCL claims were sufficiently pleaded.
November 06, 2023
Lender Seeks Class Cert Review By 4th Circuit In Mortgage Kickbacks Case

RICHMOND, Va. — A trial court “relied on a flawed . . . standard” when it certified a class of mortgagors in a lawsuit alleging excess charges and illegal kickbacks “based merely on the face of the Plaintiffs’ complaint, while noting that classes had been certified in other cases against other lenders,” lender Mr. Cooper Group Inc. argues in a petition filed in the Fourth Circuit U.S. Court of Appeals seeking permission to appeal.
November 03, 2023
Couple, Wells Fargo Agree To Dismiss RESPA Suit After Reaching Settlement

LOS ANGELES — A couple has agreed to dismiss with prejudice their complaint alleging that Wells Fargo Bank NA violated the Real Estate Settlement Procedures Act (RESPA) after notifying the court that the parties had reached a confidential settlement.
November 03, 2023
Magistrate Judge Recommends Dismissing Borrower’s Claims To Avoid Foreclosure

AUSTIN, Texas — A federal magistrate judge in Texas recommended granting a mortgage servicer’s motion to dismiss all but one claim against it because the claims, which include breach of contract, usury and fraud in an attempted foreclosure, are barred by the doctrine of res judicata and the applicable statute of limitations.
November 03, 2023
State Claim Partially Dismissed In Borrower’s Foreclosure Counsel Fees Countersuit

SEATTLE — A borrower’s counterclaim that the assignee of his mortgage loan and the loan’s servicer violated the Washington Consumer Protection Act (CPA) when rolling attorney fees from the borrower’s earlier Real Estate Settlement Procedures Act (RESPA) case into his loan payoff amount was “clearly inadequate” and could not be cured, a federal judge in Washington ruled, partially granting a motion to dismiss by those two counterdefendants.
November 01, 2023
Judge Approves Consent Order In Discrimination Suit Against Rhode Island Bank

PROVIDENCE, R.I. — A federal judge in Rhode Island on Oct. 31 approved a jointly filed consent order under which a Rhode Island bank will invest a minimum of $7 million into a loan subsidy fund designed to increase lending opportunities for Black and Hispanic residents to resolve a U.S. government action accusing the bank of discriminating against Black and Hispanic home loan applicants.
October 27, 2023
Illinois Appeals Court Affirms Foreclosure Dismissal, Appeal Moot After Sale

OTTAWA, Ill. — An Illinois appellate panel upheld a lower court’s decision to dismiss claims of improper notification of foreclosure against a lender who foreclosed on and sold a borrower’s property because Illinois law protects the new buyer’s interest and the borrower did not obtain a stay of the trial court’s order confirming the property’s sale, rendering the appeal moot.
October 27, 2023
ECOA, FHA Claims Dismissed In Class Action Alleging Reverse Redlining

FLINT, Mich. — A federal judge in Michigan granted a motion for summary judgment and dismissed Fair Housing Act (FHA) and Equal Credit Opportunity Act (ECOA) claims against lenders and agents named in a putative class action because the homebuyers who brought the complaint failed to show that alleged reverse redlining in Michigan caused a disparate impact as compared to the Midwest as a region.
October 23, 2023
DOJ Reaches $9 Million Settlement With Florida Bank On Redlining Claims

JACKSONVILLE, Fla. — The U.S. Department of Justice and Ameris Bank have filed a consent order in a Florida federal court under which the bank agrees to pay $9 million to resolve allegations that it engaged in a pattern or practice of redlining predominately Black and Hispanic neighborhoods in Jacksonville.
October 19, 2023
Texas Borrower’s Fraud, Promissory Estoppel Suit Over Refinance Denial Dismissed

FORT WORTH, Texas — A federal judge in Texas dismissed a borrower’s suit against his mortgage lender and loan servicer in a dispute over the borrower’s denial of a mortgage refinance loan, finding that the borrower failed to sufficiently plead his claims of fraud by nondisclosure and promissory estoppel.
October 20, 2023
Judge Dismisses Remaining CARES Act, RESPA, MMPA Claims In Action Against Lenders

ST. LOUIS — A federal judge has dismissed 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, finding that the loan in question is not covered by the Real Estate Settlement Procedures Act (RESPA) and that the Coronavirus Aid, Relief and Economic Security Act (CARES Act) does not include a private right of action.
October 20, 2023
2nd Circuit Affirms Ruling On Mortgage Servicers’ Conduct During Discovery

NEW YORK — The Second Circuit U.S. Court of Appeals said a district court did not abuse its discretion in finding that additional sanctions were not warranted in a mortgage default and fee-splitting lawsuit because the fee payment data sought by the borrower would not have changed the case’s outcome.
October 19, 2023
Class Certified In Case Alleging Mortgage Lender Kickbacks, Overcharging

BALTIMORE — A federal judge in Maryland certified a class of borrowers who allege that they were overcharged for mortgage title and settlement services in violation of the Real Estate Settlement Procedures Act (RESPA) after they were referred to a title and settlement company allegedly providing their lender with illegal kickbacks laundered through third-party marketing companies.
October 19, 2023
Government, Rhode Island Bank Seek Entry Of Consent Order In Discrimination Suit

PROVIDENCE, R.I. — The U.S. government and a Rhode Island state-chartered bank filed a joint motion for entry of a consent order in a suit filed by the government accusing the bank of discriminating against Black and Hispanic home loan applicants after the parties reached an agreement that requires the bank to invest a minimum of $7 million into a loan subsidy fund designed to increase lending opportunities for Black and Hispanic residents.