Justia Banking Opinion Summaries

Defendant was assigned the serving rights to Plaintiff's mortgage on a piece of property. Plaintiff sued Defendant, claiming that Defendant attempted to collect more than was due on the loan. The parties settled. Plaintiff then filed this action against Defendant, alleging breach of the settlement agreement, defamation, and violations of the Maryland Consumer Debt Collection Act and the Maryland Consumer Protection Act. An order of default was later entered against Defendant. Defendant subsequently filed a motion for a new trial or to alter or amend the judgment, requesting that the default judgments be set aside because Plaintiff's claims were legally deficient. The trial court denied the motion. The court of special appeals affirmed. The Court of Appeals affirmed, holding that a defaulting party who does not file a motion to vacate the order of default after a default judgment has been entered cannot file a Maryland Rule 2-534 motion to alter or amend a judgment to contest liability, and the defaulting party cannot appeal that judgment in order to contest liability.View "Franklin Credit Mgmt. Corp. v. Nefflen" on Justia Law

Lender loaned Borrowers $52,000 pursuant to a loan agreement (agreement) and promissory note ( note). After Borrowers stopped making payments on the loan, Lender filed a petition to collect the total principal due on the agreement and note. The trial judge determined (1) Lender did not meet its burden to prove a breach of contract on the agreement and note because it did not show evidence of the terms of the agreement and repayment schedule, and (2) even if there was an enforceable contract, Lender failed to prove damages. The Supreme Court reversed, holding (1) the record established as a matter of law that Lender proved the existence of a contract based upon the agreement and note; and (2) the district court applied the wrong burden of proof to determine a breach and the amount of damages owed, if any, on the agreement and note. Remanded. View "Iowa Mortgage Ctr., LLC v. Baccam" on Justia Law

The Brattons brought an action against CitiFinancial, Inc. (Citi) alleging that Citi erroneously placed a mortgage on their property and did not release the mortgage after it was notified of the error. The circuit court granted summary judgment for the Brattons and awarded damages pursuant to Ky. Rev. Stat. 382.365. The court of appeals reversed, holding that the Brattons failed to comply with the requirements of section 382.365(4) because they did not give notice by certified mail. The Supreme Court affirmed but on different grounds, holding that section 382.365 simply did not apply to the situation in this case.View "Bratton v. CitiFinancial, Inc." on Justia Law

Plaintiff executed a promissory note to Dollar Mortgage Corporation (DMC) secured by a mortgage on Plaintiff's real property. The mortgage was held by Mortgage Electronic Registration Systems (MERS) as the mortgagee and nominee for DMC. Eventually, Deutsche Bank National Trust Company became the holder of Plaintiff's note as custodian for OneWest Bank. Later, MERS assigned Plaintiff's mortgage to the Federal National Mortgage Association (FNMA). AFter Plaintiff defaulted on his mortgage, FNMA purchased the property at a foreclosure sale. Plaintiff subsequently file this action seeking declaratory relief as to the validity of the foreclosure sale and the ownership of the property, an order quieting title to the property, and damages for negligent misrepresentation. The trial court granted summary judgment for Defendants, finding, among other things, that Plaintiff did not have standing to challenge the validity of the assignment of the mortgage because he was a stranger to the assignment. The Supreme Court vacated in part and affirmed in part the judgment of the superior court, holding (1) Plaintiff had standing to challenge the validity of the assignment of the mortgage; and (2) the superior court did not err in the remainder of its judgment. View "Mruk v. Mortgage Elec. Registration Sys., Inc." on Justia Law

In each of these three consolidated cases plaintiff banks brought summary process actions against defendants, former homeowners-mortgagors, after foreclosure. Each defendant raised several defenses and counterclaims in his or her answer to the complaint, including challenges to the bank's right to possession and title as derived through foreclosure sale. Each bank filed a motion to strike the affirmative defenses and to dismiss the counterclaims, arguing that the only defenses and counterclaims available in summary process are those related to landlord-tenant relationships between the parties and those challenging title based on a failure to strictly comply with the power of sale provided in the mortgage. The housing court judge (1) granted the defendants' motions as to landlord-tenant-related defenses and counterclaims, and (2) denied the defendants' motions as to the other defenses and counterclaims, including those challenging title. The Supreme Court affirmed, holding that the housing court has jurisdiction to hear defenses and counterclaims challenging the title of a plaintiff in a post-foreclosure summary process action and has the authority to award damages in conjunction with such counterclaims.View "Bank of Am., N.A. v. Rosa" on Justia Law

Plaintiffs filed suit against their sons, their former attorney, a limited liability company (SMP), and others, challenging the validity of their mortgages delivered to SMP. Without first seeking mediation, SMP counterclaimed to foreclose on a mortgage granted by Plaintiffs on their agricultural property. The district court foreclosed the mortgage and denied Plaintiffs' motion to quash or stay the sheriff's sale. The court of appeals reversed, concluding that the district court lacked subject matter jurisdiction to foreclose on the agricultural property because SMP had not first obtained a mediation release as required by Iowa Code 654A.6(1). The Supreme Court reversed, holding that SMP was not required to obtain the mediation release prior to filing a counterclaim to foreclose its mortgage.View "Schaefer v. Putnam" on Justia Law

Borrowers obtained a home loan from Mann Mortgage and executed of deed of trust (DOT) naming the lender. Borrowers also signed a promissory note, which was endorsed to GreenPoint Mortgage Funding, Inc. Mortgage Electronic Registration Systems (MERS) was identified in the DOT as the beneficiary of the note. Borrowers later defaulted on the note. MERS then assigned its interest in the DOT to Greenpoint, and Greenpoint assigned the servicing rights to Countrywide Home Loans. Following a series of cancelled foreclosure sales, Borrowers filed a complaint against MERS, Greenpoint, and Countrywide (collectively, Lenders), alleging that they lacked the authority to foreclose. The district court granted summary judgment for Lenders. The Supreme Court reversed, holding that the district court erred in granting summary judgment to Lenders because (1) MERS did not qualify as a beneficiary of the DOT under Montana's Small Tract Financing Act; and (2) MERS' agency relationship with the lender was not sufficiently established to warrant summary judgment. View "Pilgeram v. Greenpoint Mortgage Funding, Inc." on Justia Law

Plaintiffs in these cases were judgment debtors whose bank accounts were frozen by judgment creditors in anticipation of enforcement of a money judgment pursuant to N.Y. C.P.L.R. 52. Plaintiffs brought putative class actions in federal court seeking injunctive relief and money damages against their banks on the grounds that their bank accounts were restrained in violation of the Exempt Income Protection Act (EIPA), which requires banks, when served with restraining notices by judgment creditors, to forward certain notices and forms to judgment debtors. In these cases, the banks allegedly failed to send the required forms. The district courts granted the banks' motions to dismiss, concluding that the EIPA does not imply a private right of action. The Second Circuit Court of Appeals certified questions of law to the New York Court of Appeals, which answered by holding (1) a private right to bring a plenary action for injunctive relief and money damages cannot be implied from the EIPA; but (2) a judgment debtor can secure relief from a bank arising from a violation of the EIPA in an Article 52 special proceeding.View "Cruz v. TD Bank, N.A." on Justia Law

The underlying class action here was brought against Southern Financial Life Insurance Company, which sold credit life and disability insurance through lending institutions, by purchasers of Southern Financial's credit life and disability policies. During the discovery phase, the trial court entered an order compelling Southern Financial to produce certain loan information and documents regarding the putative class members and the insurance sold to them. Southern Financial did not comply with the order, arguing that the loan information was not in its "possession, custody or control" within the meaning of Ky. R. Civ. P. 34.01, but rather, the information was in the possession of the individual lenders. After applying principles of general agency law, the trial court overruled the objection. Southern Financial subsequently sought a writ of prohibition to prevent the trial court's enforcement of the discovery order. The court of appeals declined to issue a writ. The Supreme Court affirmed, holding that Southern Financial was legally in control of the information it was compelled to disclose in the trial court's order, and therefore, the trial court committed no error.View "S. Fin. Life Ins. Co. v. Pike Circuit Court" on Justia Law

McCluskey executed a promissory note for $330,186, on a Naperville property, with Wells Fargo as the mortgage holder. After service in foreclosure proceedings, McCluskey did not answer or plead. An order of default and judgment of foreclosure entered. After failed negotiations on a loan modification and a rescheduled sale date, Wells Fargo was the successful bidder on the property for a price of $235,985.69. Before Wells Fargo moved to confirm the sale, McCluskey moved to vacate the default judgment and set aside the sale under section 2-1301(e) of the Code of Civil Procedure, rather than the Foreclosure Law (15-1508(b)). The trial court denied her motion and confirmed the sale. The appellate court reversed, holding that the court could exercise discretion under civil procedure law, even after a judicial sale, if the movant could present a compelling excuse for lack of diligence and a meritorious defense. The Illinois Supreme Court reversed. After a motion to confirm a judicial sale, foreclosure law governs and provides standards for exercise of discretion in dealing with a motion to vacate. At that point, it is not sufficient under the foreclosure statute to merely raise a meritorious defense to the complaint. In this case, the motion to vacate preceded the motion to confirm, so the trial court could have considered the motion to vacate under civil procedure law. Under these facts, however, the court did not err in denying the motion, even under that more liberal standard. McCluskey admitted her default, was properly served, and had notice of the default, the judgment of foreclosure, and the sale, then later raised pleading defenses for the first time.View "Wells Fargo Bank, N.A., v. McCluskey" on Justia Law