Justia Banking Opinion Summaries

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Plaintiff filed suit against Pennymac and others for wrongful foreclosure, alleging that the assignment of his mortgage to Pennymac was invalid. The Court of Appeal affirmed the trial court's decision to sustain the defense demurrer because plaintiff failed to allege facts supporting his claim. In this case, plaintiff's complaint seemed to suggest that a borrower, by refusing to pay, can prevent a lender from assigning the debt. The court held that plaintiff failed to give a logical basis for this strange suggestion. Furthermore, plaintiff's remaining causes of action also failed. View "Myles v. Pennymac Loan Services, LLC" on Justia Law

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This case stemmed from the 2007-2009 financial crisis and recession. In 2005 and 2007, Federal Home Loan Bank of Seattle purchased for residential mortgage-backed securities (RMBS) from investment bank Credit Suisse. Federal Home Loan also bought certificates from Barclays Bank. In 2009, Federal Home Loan separately brought suit under the Securities Act against Credit Suisse and Barclays. Federal Home Loan alleged Credit Suisse and Barclays each had made untrue or misleading statements relating to the certificates it purchased. n each case, the investment banks moved for summary judgment, which was granted. Federal Home Loan sought review of each case, arguing that reliance on the statements wasn't an element under the Act. The Washington Supreme Court concurred and concluded a plaintiff need not prove reliance under the Act. the Court of Appeals was reversed and the matter remanded for further proceedings. View "Fed. Home Loan Bank of Seattle v. Credit Suisse Sec. (USA) LLC" on Justia Law

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The Supreme Judicial Court affirmed the decision of the superior court denying Beal Bank USA's complaint to compel the assignment of a mortgage to Beal by the insolvent originating lender, New Century Mortgage Corporation, holding that the court did not err in denying the relief sought by Beal to compel assignment of the mortgage in this case. On appeal, Beal argued that because it was the holder of the note secured by the mortgage, the court erred when it failed to apply the equitable trust doctrine to conclude that New Century held the mortgage in trust for Beal and that Beal was entitled to an assignment of the mortgage. The Supreme Judicial Court disagreed, holding (1) although the holder of the note may retain some equitable interest in the accompanying mortgage, any such interest, standing alone, does not equate to actual ownership of the mortgage, nor is the interest sufficient to establish a pre-foreclosure right to compel its assignment; and (2) Beal did not produce sufficient independent evidence of ownership of the mortgage to compel an assignment. View "Beal Bank USA v. New Century Mortgage Corp." on Justia Law

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Borrowers brought suit alleging that their lending bank had engaged in fraudulent real estate lending practices. The bank responded that statutes of limitations barred the borrowers’ fraud claims. Following an evidentiary hearing to establish relevant dates for the statutes of limitations inquiry, the superior court entered judgment and awarded attorney’s fees in the bank’s favor. The borrowers appealed, arguing that the superior court erred in its factual and legal determinations and otherwise violated their due process rights. Finding no reversible error, the Alaska Supreme Court affirmed the superior court’s rulings. View "Taffe v. First National Bank of Alaska" on Justia Law

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The Supreme Court affirmed the district court's grant of summary judgment in favor of Wells Fargo Bank, N.A. and dismissing Plaintiff's claims for, inter alia, breach of contract and negligence, holding that Wells Fargo did not breach the deed of trust and that Plaintiff's remaining claims presented no genuine issue of material fact. Wells Fargo assumed service of a loan obtained by Plaintiff, who executed a deed of trust with certain property serving as collateral for the loan. Plaintiff failed to pay property taxes assessed to Lot 3, which included the property. Wells Fargo paid the taxes on the entirety of Lot 3 and required Plaintiff to repay those taxes. Plaintiff later brought this suit. The district court granted summary judgment for Wells Fargo, reasoning that the deed of trust's unambiguous language permitted Wells Fargo to pay Lot 3's taxes in full. The Supreme Court affirmed, holding (1) under the deed of trust, Wells Fargo did not breach of the contract by paying the delinquent taxes on lot 3 and requiring Plaintiff to repay those taxes; and (2) because Wells Fargo did not breach the deed of trust, it likewise did not violate a duty owed to Plaintiff under the deed of trust, and as such Plaintiff's remaining claims were properly dismissed. View "Graham-Rogers v. Wells Fargo Bank, N.A." on Justia Law

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The Supreme Court reversed the decision of the court of appeals affirming the district court's dismissal of Appellants' complaint against U.S. Bank on statute of limitations grounds, holding that Appellants' breach of fiduciary duty claim was timely. On January 24, 2017, Appellants filed their lawsuit, alleging breach of fiduciary duty and unjust enrichment. U.S. Bank moved to dismiss the claim, arguing that Appellants failed to satisfy the applicable six-year statute of limitations. In response, Appellants asserted that they had suffered no damages earlier than August 2012. The district court granted the motion to dismiss, concluding that Appellants could have raised their claims in April 2010. The court of appeals affirmed, concluding that "some damage" occurred on April 27, 2010. The Supreme Court reversed, holding that U.S. Bank failed to establish - based on the pleadings - that Appellants suffered "some damage" in the form of financial harm before August 2012, and therefore, the district court erred by granting the motion to dismiss. View "Hansen v. U.S. Bank National Ass'n" on Justia Law

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Five Star Credit Union ("Five Star") attempted for over a decade to collect a debt owed by William Elliott. Five Star obtained a judgment against Elliott in 2011, but he never paid. In 2017, Five Star sought to garnish Elliott's wages by filing a process of garnishment against Elliott's employer, The Elliott Law Group, P.A. ("ELG"), a law firm under Elliott's complete control. ELG opposed the process of garnishment. Following a hearing, the trial court found that the assertions in ELG's opposition were untrue and ordered that Elliott's income from ELG be garnished. Elliott and ELG appealed. The Alabama Supreme Court determined the appellants' arguments lacked merit, and affirmed the trial court. View "Elliott Law Firm Group, P.A. v. Five Star Credit Union" on Justia Law

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Parke Bancorp (“Parke”) made a loan to 659 Chestnut LLC (“659 Chestnut”) in 2016 to finance the construction of an office building in Newark, Delaware. 659 Chestnut pleaded a claim in the Superior Court for money damages in the amount of a 1% prepayment penalty it had paid under protest when it paid off the loan. The basis of 659 Chestnut’s claim was that the parties were mutually mistaken as to the prepayment penalty provisions of the relevant loan documents. Parke counterclaimed for money damages in the amount of a 5% prepayment penalty, which it claimed was provided for in the agreement. After a bench trial, the Superior Court agreed with 659 Chestnut and entered judgment in its favor. After review, the Delaware Supreme Court reversed and directed entry of judgment in Parke’s favor on 659 Chestnut’s claim. Although Parke loan officer Timothy Cole negotiated on behalf of Parke and represented to 659 Chestnut during negotiations that there was a no-penalty window, the parties stipulated that: (1) everyone knew that Cole did not have authority to bind Parke to loan terms; and (2) everyone also knew that any terms proposed by Cole required both final documentation and approval by Parke’s loan committee. It was evident to the Supreme Court that 659 Chestnut did not offer clear and convincing evidence that Parke’s loan committee agreed to something other than the terms in the final loan documents. Accordingly, it Directed entry of judgment for Parke. View "Parke Bancorp Inc., et al. v. 659 Chestnut LLC" on Justia Law

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The debtor obtained a commercial loan from Bank. The agreement dated March 9, 2015, granted Bank a security interest in substantially all of the debtor’s assets, described in 26 categories of collateral, such as accounts, cash, equipment, instruments, goods, inventory, and all proceeds of any assets. Bank filed a financing statement with the Illinois Secretary of State, to cover “[a]ll Collateral described in First Amended and Restated Security Agreement dated March 9, 2015.” Two years later, the debtor defaulted and filed a voluntary Chapter 7 bankruptcy petition. Bank sought to recover $7.6 million on the loan and filed a declaration that its security interest was properly perfected and senior to the interests of all other claimants. The trustee countered that the security interest was not properly perfected because its financing statement did not independently describe the underlying collateral, but instead incorporated the list of assets by reference, and cited 11 U.S.C. 544(a), which empowers a trustee to avoid interests in the debtor’s property that are unperfected as of the petition date. The bankruptcy court ruled that ”[a] financing statement that fails to contain any description of collateral fails to give the particularized kind of notice” required by UCC Article 9. The trustee sold the assets for $1.9 million and holds the proceeds pending resolution of this dispute. The Seventh Circuit reversed, citing the plain and ordinary meaning of the Illinois UCC statute, and how courts typically treat financing statements. View "First Midwest Bank v. Reinbold" on Justia Law

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Shareholders filed suit against the Agencies after the FHFA placed Fannie Mae and Freddie Mac in conservatorship. In 2012, FHFA and Treasury adopted a Third Amendment to their financing agreements wherein Fannie and Freddie give Treasury nearly all their net worth each quarter as a dividend. Shareholders contend that the arrangement exceeded FHFA's statutory powers and that FHFA lacked authority to adopt the Third Amendment. The court held that shareholders plausibly alleged that the Third Amendment exceeded FHFA’s conservator powers by transferring Fannie and Freddie’s future value to a single shareholder, Treasury. Therefore, a majority of the en banc court held that this claim survived dismissal under Federal Rule of Civil Procedure 12(b)(6). A majority of the en banc court held that the Director's "for cause" removal protection was unconstitutional and therefore FHFA lacked authority to adopt the Third Amendment. The court explained that FHFA's design, an independent agency with a single Director removable only "for cause," violates the separation of powers. Finally, a different majority of the en banc court held that prospective relief was the proper remedy. Accordingly, the court reversed in part, affirmed in part, and remanded for further proceedings. View "Collilns v. Mnuchin" on Justia Law