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

Mealey's Mortgage Lending

October 18, 2023
Mortgage Servicer’s Motion To Dismiss Pay-To-Pay Class Claims Granted

CENTRAL ISLIP, N.Y. — A federal judge in New York granted a mortgage servicer’s motion to dismiss all claims in a putative class complaint regarding pay-to-pay mortgage fees on the ground that the borrowers failed to sufficiently plead facts showing that they complied with notice of grievance provisions of their mortgage agreements, but the judge allowed a federal advisory opinion to be considered in the case.
October 18, 2023
Mississippi Supreme Court Majority Affirms Arbitration Denial In Foreclosure Case

JACKSON, Miss. — The Mississippi Supreme Court affirmed a lower court’s denial of a lender’s motion for arbitration in a 6-2 majority opinion, ruling that the bank waived its right to compel arbitration by substantially participating in a borrower’s lawsuit and that the borrower’s amended complaint seeking to nullify the bank’s foreclosure did not reinstate the bank’s right to compel arbitration.
October 18, 2023
U.S. Supreme Court Denies Petition Challenging Foreclosure, Sheriff’s Sale

WASHINGTON, D.C. — The U.S. Supreme Court denied a pro se petition for a writ of certiorari filed by a Michigan woman alleging that the Sixth Circuit U.S. Court of Appeals erred when it upheld the foreclosure of her home and the subsequent sheriff’s sale, both of which she alleged were carried out improperly after she questioned the authority of the servicer on her loan.
October 16, 2023
Supreme Court Grants Certiorari In 2nd Challenge To Chevron Deference

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 13 granted a petition for a writ of certiorari in a second case challenging the doctrine of Chevron deference and ordered that it be briefed on a schedule allowing argument “in tandem” with a pending case pertaining to the same issue, both of which involve challenges to regulations that require fishing vessels to pay federal monitors.
October 16, 2023
High Court Won’t Review FCA Suit Alleging Fraudulent Compliance With HUD Rules

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 16 denied a former underwriter’s petition for a writ of certiorari seeking review and reversal of a Seventh Circuit U.S. Court of Appeals’ determination that she failed to show that a lender’s alleged violations of the federal False Claims Act (FCA) caused harm to the U.S. Department of Housing and Urban Development.
October 16, 2023
Mortgage Servicer’s Motion To Dismiss Hurricane Ian Home Damage Suit Denied

FORT MYERS, Fla. — A federal judge in Florida denied a mortgage servicer’s motion to dismiss on the ground that it did not address two borrowers’ allegations that the servicer is liable for Hurricane Ian damage to their home because it failed to timely pay flood insurance premiums three times.
October 13, 2023
U.S. Supreme Court Agrees To Hear National Bank Act Preemption Case

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 13 granted a petition for a writ of certiorari filed by mortgagors in a case seeking interest pursuant to New York law on escrowed accounts from Bank of America N.A. (BOA) in which they ask the high court justices to decide whether “the National Bank Act preempt[s] the application of state escrow-interest law to national banks.”
October 12, 2023
Mortgage Prepayment Processing Fraud, Unjust Enrichment Claims Dismissed

NORFOLK, Va. — A federal judge in Virginia partly granted a subservicer’s motion to dismiss a couple’s state law fraud and unjust enrichment claims involving the alleged mishandling of mortgage payments while denying the motion with respect to claims that the subservicer engaged in conversion and unfair or unconscionable conduct.
October 12, 2023
Mortgage Borrower Seeks 11th Circuit Review Of Wrongful Debt Collection Dismissal

ATLANTA — A borrower has filed a notice of appeal in the 11th Circuit U.S. Court of Appeals after a federal judge in Florida dismissed with prejudice an amended complaint alleging that a mortgage servicer engaged in wrongful debt collection in violation of Florida and federal laws when it attempted to collect bankruptcy litigation costs.
October 12, 2023
Texas Supreme Court To Decide If Wells Fargo Can Rescind, Re-Accelerate Loan

AUSTIN, Texas — A lender and mortgage servicer argue in their appellee brief before the Texas Supreme Court that a lender can simultaneously rescind and re-accelerate a loan to foreclose on a property under Texas law while two borrowers argue that the two actions cannot happen simultaneously.
October 11, 2023
Federal Judge Grants Borrowers Classes Summary Judgment In ‘Pay-To-Pay’ Case

HOUSTON — A federal judge in Texas adopted the recommendation of a magistrate judge to grant summary judgment to two classes of mortgagors with Federal Housing Administration (FHA) loans who sued a servicer and subservicer over “pay-to-pay fees” and left certain issues for the damages stage concerning whether some class members are precluded from recovery due to loan modifications, the statute of limitations and bankruptcy.
October 11, 2023
Borrower’s Class Claims Of Racially Discriminatory Loans Dismissed By Federal Judge

CHICAGO — A mortgagor who accuses a lender of charging Black borrowers higher interest rates and fewer credits to lower closing costs than what is offered to white borrowers failed to state plausible claims for racial bias, a federal judge in Illinois ruled, granting the lender’s motion to dismiss the putative class complaint with leave to amend.
October 11, 2023
Mortgage Servicer Accuses Payment Processor Of Misusing Customer Data

DALLAS — A mortgage payment processor misused a mortgage servicer’s customer data when it conducted quality assurance (QA) testing with customers’ nonpublic, personal information while in a live production environment rather than a walled-off testing environment, the mortgage servicer alleges in a complaint filed in a federal court in Texas.
October 11, 2023
3rd Circuit Won’t Reconsider Dismissal Of Borrower’s Suit Against Bank

PHILADELPHIA — The Third Circuit U.S. Court of Appeals denied a borrower’s pro se request to rehear a panel’s decision affirming the dismissal of his complaint against a bank and others arising from an earlier Pennsylvania state court foreclosure action.
October 11, 2023
Judge Dismisses UCL Claim, Allows Debt-Collection Claims In Mortgage Servicing Row

SAN FRANCISCO — A California federal magistrate judge granted in part and denied in part a motion to dismiss a suit brought against a mortgage lender, its affiliate and a servicer, finding that the borrower and a resident of the property at issue did not allege a loss of money as required by their claim for violation of California’s unfair competition law (UCL) but brought valid debt collection claims for unfair practices pertaining to payment of a consumer debt during a COVID-19 forbearance period.
October 09, 2023
Summary Judgment Granted On Fraud And Other Claims Against Mortgage Servicer

DALLAS — A federal judge in Texas accepted a magistrate judge’s recommendation to grant a mortgage servicer’s motion for summary judgment on two borrowers’ claims of fraud, breach of contract and promissory estoppel, dismissing the claims with prejudice in the case alleging that the servicer told borrowers that their mortgage was “forgiven” then later attempted to collect the alleged debt.
October 09, 2023
Amici Support High Court Arguments That FCRA Waives USDA’s Sovereign Immunity

WASHINGTON, D.C. — A think tank and several nonprofits and legal clinics filed two amicus curiae briefs in the U.S. Supreme Court supporting arguments by a borrower that the Fair Credit Reporting Act (FCRA) “unambiguously authoriz[es] suit against federal agencies,” including the U.S. Department of Agriculture, clearing the way for the borrower to proceed with a lawsuit alleging that the USDA misrepresented that he was past due on his mortgage.
October 03, 2023
High Court Won’t Review Dismissal Of Mortgage Default Suit

WASHINGTON, D.C. — The U.S. Supreme Court on Oct 2. declined to review a Fourth Circuit U.S. Court of Appeals panel’s dismissal of a borrower’s appeal seeking to reverse dismissal orders against her lender and a loan modification provider for lack of jurisdiction on timeliness grounds in a lawsuit stemming from the sale of her home via foreclosure while she was in bankruptcy proceedings.
September 21, 2023
Oklahoma Supreme Court Partially Reverses Judgment In Wrongful Foreclosure Case

OKLAHOMA CITY — The Oklahoma Supreme Court reversed a trial court’s wrongful foreclosure judgment in favor of the borrower because the bank did not dismiss its prior foreclosure action against the borrower with prejudice as was required for the borrower to allege a claim for wrongful foreclosure.
September 21, 2023
Federal Judge Grants Summary Judgment, Affirming Bank’s Authority To Foreclose

BOSTON — A federal judge in Massachusetts granted a motion for summary judgment filed by two banks and a loan servicing company because one of the banks offered evidence showing that, contrary to a borrower’s complaint, it had the authority to foreclose on his property.
September 21, 2023
Illinois Panel Affirms Dismissal Of Suit Claiming Reverse Mortgage Fraud

CHICAGO — An Illinois appeals court affirmed a lower court’s ruling to dismiss a complaint filed by three borrowers who allege that a lender fraudulently took their homes in a reverse mortgage scheme because the claims are barred by the state’s statute of limitations.
September 21, 2023
Hispanic Workers’ Claims Of Bias Against Wells Fargo Stayed In Federal Court

SAN ANTONIO — A federal judge in Texas compelled arbitration individually staying claims for 16 of 17 plaintiffs who filed an amended class action against Wells Fargo Bank N.A. alleging that the bank forces its employees to offer predatory mortgage lending options to Spanish-speaking customers and excludes members of a bilingual team from opportunities within the company.
September 20, 2023
Mortgage Servicer Removes Class Complaint Claiming Inaccurate Credit Reporting

CHICAGO — A mortgage servicer has removed to a federal court in Illinois a borrower’s putative class complaint alleging that it supplied incorrect payment history information to consumer credit reporting agencies (CRAs), asserting federal question jurisdiction and standing under Article III of the U.S. Constitution.
September 20, 2023
Federal Judge Approves Class Settlement In Pay-To-Pay Mortgage Fees Case

WHEELING, W.Va. — A federal judge in West Virginia granted a motion seeking final approval of a $910,000 settlement in a class action alleging that a bank illegally charged hundreds of borrowers convenience fees to pay their monthly mortgage payments online or by telephone in violation of the West Virginia Consumer Credit and Protection Act (WVCCPA).
September 20, 2023
Lender Waives Right To Respond To Cert Petition In FCA Suit Over Mortgage Fraud

WASHINGTON, D.C. — A mortgage lender on Sept. 19 waived its right to respond to a relator’s petition for a writ of certiorari with the U.S. Supreme Court, seeking review and reversal of the Seventh Circuit U.S. Court of Appeals’ decision upholding a lower court’s grant of summary judgment for the lender in the relator’s False Claims Act (FCA) suit alleging that the lender made false representations to the U.S. Department of Housing and Urban Development.