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

Mealey's Mortgage Lending

September 19, 2023
Borrowers Allege In Class Action That Lender Wrongfully Denied, Shorted COVID-19 Aid

PHILADELPHIA — Borrowers filed a class action complaint in federal court in Pennsylvania alleging that their lender violated state and federal statutes when it denied some borrowers COVID-19 aid and approved only a portion of the aid for others claiming to be eligible for more funding.
September 18, 2023
Government Urges High Court To Uphold ‘Bedrock Principle’ Of Chevron Deference

WASHINGTON, D.C. — The U.S. secretary of Commerce, two National Oceanic and Atmospheric Administration (NOAA) officials and the National Marine Fisheries Service (NMFS) (collectively, the government) urge the U.S. Supreme Court in a Sept. 15 brief to not overrule the doctrine of Chevron deference in a challenge to fishery regulations that were upheld by the District of Columbia Circuit U.S. Court of Appeals, writing that doing so could “cause disruption” to complex federal regulatory schemes.
September 18, 2023
Class Certified In Suit Alleging Illegal Kickbacks And Scheme To Defraud Borrowers

BALTIMORE — A federal judge in Maryland certified a class of borrowers and two subclasses of borrowers, finding that a lender’s argument that some of the class did not endure financial losses failed to “undermine the predominance of common legal and factual issues” in the case alleging that the lender engaged in both an illegal kickback agreement with its title and settlement company and a related plan to defraud borrowers on more than 750 loans into paying made-up charges for title and settlement services.
September 14, 2023
Bank’s Motion To Dismiss Rejected In Part; Claims Handling Violations Alleged

DAYTON, Ohio — A federal judge in Ohio set a settlement conference after denying part of a bank’s motion to dismiss and ruling that two borrowers adequately stated their claim that the bank violated the Real Estate Settlement Procedures Act (RESPA) by failing to sufficiently address one out of three alleged errors in loan modification paperwork.
September 14, 2023
Most Counts Stand, 1 Dismissed In RESPA Case Alleging Mortgage Servicer Erred

BALTIMORE — A federal magistrate judge in Maryland dismissed a claim alleging that a mortgage servicer violated the Real Estate Settlement Procedures Act (RESPA) by failing to offer all applicable loss mitigation options, ruling that the mortgage servicer had the discretion to choose which loan modification option it offered, but the judge allowed the remaining RESPA and state law claims to stand, ruling that the borrowers sufficiently stated their claims that the servicer failed to adequately respond to their letter reporting errors and seeking payment history information.
September 12, 2023
Florida Panel Finds Trial Court ‘Exceeded Its Authority’ In Foreclosure Case

WEST PALM BEACH, Fla. — A Florida appeals panel affirmed a trial court’s ruling that denied a bank’s attempt to foreclose on a home but reversed the portion of the trial court’s ruling that established terms of the mortgage repayment because the trial court exceeded its authority in creating a resolution for the past-due payments.
September 12, 2023
Federal Judge Rejects Bank’s Motion To Dismiss RESPA Case Alleging Vicarious Liability

COEUR D’ALENE, Idaho — A federal judge in Idaho denied a bank’s motion to dismiss a complaint alleging violations of the Real Estate Settlement Procedures Act (RESPA) and ruled that as the master servicer of a homeowner’s loan, the bank can plausibly be held liable for the actions of its subservicer.
September 08, 2023
Massachusetts Appeals Court OKs Home Foreclosure, Says Bank Effort ‘Reasonable’

BOSTON — The Massachusetts Appeals Court affirmed a housing court’s judgment allowing a home foreclosure by Wells Fargo Bank N.A. to stand on the ground that the bank made “reasonable efforts” to contact the homeowner in keeping with regulatory requirements of loans guaranteed by the U.S. Department of Veterans Affairs (VA).
September 07, 2023
Solicitor General Asks High Court Not To Hear National Bank Act Preemption Cases

WASHINGTON D.C. — The U.S. solicitor general urged the Supreme Court in an amicus curiae brief to deny petitions for writs of certiorari on the grounds that lower courts failed to apply the proper assessment of the degree to which the National Bank Act (NBA) preempts state laws in two unrelated appeals regarding whether lenders are required to pay interest on mortgage escrow accounts.
August 29, 2023
Judge: Borrower Can Amend Suit Against Bank For Notice Of Default During COVID

SAN FRANCISCO — A California federal judge on Aug. 28 refused to dismiss a borrower’s claim for violation of California’s unfair competition law (UCL) against her bank for causing a notice of default on her loan while her application for loan assistance filed during the coronavirus pandemic was pending, dismissed her claim for violation of Real Estate Settlement Procedures Act (RESPA) regulations and granted her leave to amend.
August 25, 2023
Wells Fargo Asks Federal Court To Toss Case Alleging Profits Off Rate Lock Fees

SAN FRANCISCO — Wells Fargo moved to dismiss a proposed class complaint filed in a California federal court alleging that the bank wrongly charged borrowers rate lock extension fees and admitted its misconduct by voluntarily refunding its customers but profited “in the billions of dollars” through investments of the money collected through the fees.
August 24, 2023
Lender To 7th Circuit: ECOA Discrimination Protection Not For Prospective Borrowers

CHICAGO — A lending and consulting company and its owner argue that discrimination protection of the Equal Credit Opportunity Act (ECOA) does not extend to prospective borrowers in urging the Seventh Circuit U.S. Court of Appeals to affirm a lower court’s dismissal of the Consumer Financial Protection Bureau’s complaint against them.
August 24, 2023
Appraisal Bias Case Against Lender, Appraiser And Appraiser Counterclaims Continue

BALTIMORE — A federal judge in Maryland declined to dismiss Black homeowners’ claims alleging that a mortgage lender and property appraiser violated several provisions of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) by undervaluing their home based on their race and by denying a mortgage refinancing application based on that appraisal, but the judge also declined to dismiss the appraiser’s defamation and false light invasion of privacy counterclaims against the homeowners.
August 24, 2023
Homeowner Alleges In Class Action Suit That Lender Unjustly Denied COVID-19 Aid

ALLENTOWN, Pa. — A homeowner filed a class action in Pennsylvania federal court alleging violations of federal statutes and the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) when a lender denied him 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.
August 24, 2023
Homeowner Opposes Bank Of America’s Motion To Dismiss Pay-To-Pay Class Action Suit

CHARLESTON, W.Va. — A homeowner who filed a federal class action suit against Bank of America N.A. (BANA) after the company began charging her a fee to pay her mortgage over the phone responded to a motion to dismiss with allegations that the bank violated West Virginia state and federal laws in charging fees not permitted by mortgage agreements or statutes.
August 24, 2023
7th Circuit: Omission Of Credit Report Material Info Actionable Under FCRA

CHICAGO — The Seventh Circuit U.S. Court of Appeals disagreed with a lower court’s ruling that credit reporting agency Experian Information Solutions Inc. was immune from liability in reporting a borrower’s mortgage as delinquent, maintaining that Experian’s omission of a related payment agreement between the lender and borrower is actionable under the Fair Credit Reporting Act (FCRA).
August 24, 2023
Federal Judge In California Dismisses Foreclosure Suit Citing Statute Of Limitations

CONCORD, Calif. — A federal judge in California dismissed a homeowners’ lawsuit but allowed them to amend their complaint that alleged that a mortgage loan servicer violated several state and federal statutes when it foreclosed on the homeowners’ property.
August 24, 2023
7th Circuit: County Cannot Recover Under FHA For Banks’ Predatory Lending

CHICAGO — The Seventh Circuit U.S. Court of Appeals ruled that a county in Illinois that says it was injured by a bank’s predatory loan practices because of vacant homes, diminished home values and lost tax revenue is not entitled to relief under the Fair Housing Act (FHA) because the county “did not suffer ‘first-tier injuries’.”
August 24, 2023
Class Certified In Suit Alleging Borrowers Were Illegally Charged For Inspections

GREENBELT, Md. — A federal judge in Maryland granted class certification to a homeowner, finding that she adequately made her case to represent at least 100 borrowers in a suit alleging that a mortgage servicer violated several state laws when it charged inspection fees to delinquent borrowers even after signing a memorandum of understanding in another case to prevent such fees.
August 24, 2023
Borrower To Appeal Decision By Judge To Let Dismissal Stand In Loan Denial Case

BATON ROUGE, La. — A borrower has filed a notice of appeal in 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 after a federal judge in Louisiana denied his motion to reconsider the dismissal of his claims with prejudice.
August 23, 2023
Borrower Seeks Extension To Object To R&R After Judge Adopts It, Dismissing

ATLANTA — Noting that a borrower’s request for an extension of time to object to a magistrate judge’s order and final report and recommendation (O&R) that his second amended complaint alleging wrongful foreclosure should be dismissed is untimely, the lenders tell a Georgia federal court that it is also moot because the request was filed four days after the judge adopted the magistrate’s report.
August 17, 2023
UBS To Pay $1.43 Billion In Residential Mortgage-Backed Securities Settlement

BROOKLYN, N.Y. — Swiss bank UBS AG and some of its U.S.-based affiliates agreed to pay $1,435,000,000 in civil penalties to settle a civil suit alleging fraud linked to the underwriting and issuance of residential mortgage-backed securities (RMBS), the U.S. Department of Justice (DOJ) announced.
August 16, 2023
USDA To High Court: FCRA Does Not Waive Government’s Sovereign Immunity

WASHINGTON, D.C. — A waiver of sovereign immunity requires “clear statutory language,” and the general remedial provisions of the Fair Credit Reporting Act (FCRA) do not contain such a waiver, the U.S. Department of Agriculture tells the U.S. Supreme Court in an Aug. 15 petitioner brief challenging a Third Circuit U.S. Court of Appeals ruling allowing a borrower to sue the department for allegedly misreporting that he was past due in his mortgage loan payments.
August 11, 2023
Borrower Asks For Reconsideration Of Dismissal Against Mortgage Servicer

PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel improperly found that res judicata applied to quiet title claims, a borrower argues in his motion for reconsideration of the dismissal of his complaint, further asserting that the appellate court erred in finding that his claims were barred by statutes of limitations.
August 11, 2023
Federal Jury Awards Mortgage Servicing Company $22M For Dispute Over Owed Funds

NEWARK, N.J. — A jury in a New Jersey federal court returned a verdict in a dispute over who was entitled to funds after a mortgage lender ended a long-standing servicing agreement with another company, finding that the servicing company was entitled to more than $22 million on its fraud and conversion claims while awarding the lender $247,000 for breach of contract.