Justia Banking Opinion Summaries

Appellant obtained a home loan from Countywide Home Loans. The promissory note was secured by a deed of trust naming Countrywide as the lender and Mortgage Electronic Registration Systems (MERS) as beneficiary of the deed of trust. MERS assigned its interest in the deed of trust to HSBC Bank. Bank of America later acquired Countrywide and its assets, including Appellant's promissory note. After Appellant defaulted on the loan, Appellant participated in Nevada's Foreclosure Mediation Program (FMP). BAC Home Loans Servicing, as a representative of Bank of America, appeared at the mediation. After the mediation, Appellant filed a petition for judicial review, which the district court denied. Appellant appealed, arguing that Bank of America lacked authority to negotiate a loan modification at the mediation because the note and deed of trust were assigned to two separate entities. The Supreme Court reversed the district court's denial of Appellant's petition for judicial review and refusal to impose sanctions, holding that because Bank of America was not the deed of trust beneficiary at the time of the FMP mediation, Bank of America failed to satisfy Nev. Rev. Stat. 107.086(4)'s attendance and participation requirement. Remanded. View " Bergenfield v. Bank of Am." on Justia Law

These two consolidated cases involved a bond for which Hartford Fire Insurance Company (Hartford) was the surety. Each bond principal was sued, and both cases resulted in the entry of default judgments. Hartford was not given notice of either lawsuit against its principals or notice that default judgments were being sought. Hartford learned of the default judgments only after the plaintiffs in those cases sought payment on the bonds. In each case, Hartford ultimately was found liable on the bond. Hartford appealed, asserting that the circuit courts erred in finding the bonds to be judgment bonds and in holding Hartford liable on the bonds under the circumstances. The Supreme Court affirmed, holding that the two bonds at issue were judgment bonds, and therefore, the circuit courts correctly found that default judgments entered against the bond principals were conclusive and binding against Hartford. View "Hartford Fire Ins. Co. v. Curtis" on Justia Law

A trust (Trust) purchased lots in an RV park. The purchase agreement for the lots granted Trust an easement for access to a lake over and across lakefront property. At the time of the purchase, the lake property was encumbered by a deed of trust issued by Bank. After the owners of the lake property became delinquent on their loan obligations, Bank attempted to foreclose on the lake property by way of a trustee's sale, at which it purchased the property. Because Bank failed to provide Trust with notice of the sale, Bank subsequently noticed a second trustee's sale of the lake property, this time providing notice to Trust. Trust filed a complaint against Bank, claiming the Bank was precluded from holding the second sale and that it therefore could not extinguish its easement via the second sale. Bank subsequently purchased the property at the second trustees sale. The district court concluded (1) the first trustee's sale was invalid, but the second trustee's sale was valid; and (2) Trust's easement claims were therefore subordinate to Bank's interests in the lake property. The Supreme Court affirmed, holding that the district court correctly concluded that Bank effectively foreclosed on Trust's easement through the second trustee's sale. View "Terry L. Bell Generations Trust v. Flathead Bank of Bigfork" on Justia Law

This dispute arose out of a nonjudicial foreclosure proceeding that Respondent bank initiated against a home owned by Appellants. Respondent purchased the home at the trustee's sale. When Appellants did not vacate, Respondent filed an unlawful detainer action. Appellants responded by filing a complaint seeking to quiet title to the property, alleging that Respondent did not own the promissory note or deed of trust and had foreclosed without proper notice under Nev. Rev. Sat. 107.080, invalidating the trustee's sale. Respondent filed a motion to dismiss Appellants' complaint, which the federal district court granted. Appellants appealed, arguing that the district court should not have ruled on the motion dismiss because the prior-exclusive-jurisdiction doctrine required the federal court to abstain in favor of the earlier-filed unlawful detainer action. The federal court agreed that if both the quiet title action and the unlawful detainer action were characterized as in rem or quasi in rem, then the court was required to vacate the district court's dismissal of the quiet title action. The Nevada Supreme Court accepted certification to answer the characterization of the parties' actions and held that quiet title and unlawful detainer proceedings are in rem or quasi in rem in nature. View "Chapman v. Deutsche Bank Nat'l Trust Co." on Justia Law

After Countrywide Home Loans Servicing filed a complaint in foreclosure against Appellants, the trial court granted default judgment in favor of Countrywide, and the property was sold at a sheriff's sale. Countrywide subsequently filed a notice of voluntary dismissal and then refiled its complaint in foreclosure. The trial court granted the order of foreclosure, rejecting Appellants' claim that the action was precluded by res judicata. The appellate court affirmed, concluding that until the order confirming the sheriff's sale is entered, the plaintiff may terminate the case without prejudice by filing a notice of voluntary dismissal. The Supreme Court reversed, holding that a judgment of foreclosure cannot be dissolved by the filing of a notice of voluntary dismissal after a trial court has entered judgment on the underlying note. Remanded. View "Countrywide Home Loans Servicing, L.P. v. Nichpor" on Justia Law

Beginning in 2003, Schmitz convinced financial institutions and others to lend him money, ostensibly for real estate development, by stating that he was the beneficiary of a multi-million dollar trust fund whose assets were available as collateral. There was no trust; Schmitz concocted a trail of paper and digital documents, even creating a phony financial services firm (with a website and virtual office space), and filing suit against fictitious employees of the (non-existent) firm claiming mishandling of the trust. Schmitz obtained more than $6 million from seven banks and two additional lenders. He used about half to pay off previous lenders, and the rest for personal expenses. Schmitz pleaded guilty to mail fraud affecting a financial institution, 18 U.S.C. 1341. Because Schmitz began the charged fraud in 2003, while on supervised release in connection with a prior state conviction, the advisory Guidelines range was 87 to 108 months in prison. The court imposed an 87-month sentence. The Seventh Circuit affirmed, rejecting arguments that “factor creep” in the Guidelines has inflated beyond reason the sentencing range for white collar frauds, particularly for someone of Schmitz’s age (60) and health and concerning the timespan of the fraud. View "United States v. Schmitz" on Justia Law

The U.S. Commodity Futures Trading Commission served administrative subpoenas on Worth, a precious metal wholesaler, Mintco, a precious metal dealer, and DSD, a depository that stores precious metals, seeking documents relating to purchases and sales of precious metals, in connection with its investigation into whether those companies violated the Commodity Exchange Act, 7 U.S.C. 1. The companies handed over the requested documents, but redacted the names and contact information of the individual customers, retailers, and intermediaries, asserting that they (the companies) were covered by the Right to Financial Privacy Act, which requires that customers of a “financial institution” be given notice and the opportunity to object before any disclosures, 12 U.S.C. 3401, 3402(2), 3405. The district court held that the RFPA does not apply to the companies. The Seventh Circuit affirmed, finding that the nature of the businesses is readily distinguishable from that of the other entities listed in the RFPA’s definition of “financial institution.” View "Commodities Futures Trading Comm'n v. Worth Bullion Grp. Inc., " on Justia Law

Harris was a registered representative with an affiliated broker of MetLife and sold insurance, annuities, and other financial products. Investigations by the Illinois Securities Division, MetLife, and the IRS revealed that for almost eight years, Harris had been diverting client funds, using deposit and accounting methods that substantially departed from MetLife’s standard practices. She manipulated software to generate account summaries that falsely displayed the investments that her clients intended to purchase. Harris received $10,938,986.58 in client funds from more than 50 but fewer than 250 clients, reinvested $4,055,945.73 on the clients’ behalf, and used the balance for personal purposes. MetLife settled with clients who suffered a loss, paying more than $7 million. Harris pled guilty to mail fraud, 18 U.S.C. 1341 and money laundering, 18 U.S.C. 1957. The court’s sentencing calculation included addition of 18 offense levels for a loss in excess of $2.5 million, four levels for the number of victims, two levels for sophisticated means, for a total offense level of 35. The final guideline range was 168 to 210 months; the court sentenced her to 210 months in prison plus $6,812,764.98 in restitution. The Seventh Circuit affirmed, rejecting an argument that the court erred in counting married couples as two separate victims. View "United States v. Harris" on Justia Law

Plaintiffs sued U.S. Bank after the Bank enforced its rights under a revolving credit agreement on which plaintiffs failed to make timely payment. The district court granted summary judgment for the Bank, ruling that plaintiffs, by signing forbearance agreements, released all claims against the Bank, and rejected the contention that these agreements were void because of duress caused by an alleged forgery. The alleged forgery was immaterial to the claims because plaintiffs failed to pay the loan by the maturity date, and the Bank was entitled to enforce its rights under the revolving credit agreement. The court agreed with the district court that the alleged forgery was immaterial and affirmed the judgment. View "Meyer, et al v. U.S. Bank National Assoc." on Justia Law

In 2009, Epling purchased a manufactured home, borrowing funds from Vanderbilt secured by a security interest in her manufactured home. Epling resided in Magoffin County, Kentucky. Vanderbilt filed an application for first title and an application for a title lien statement in Bell County, Kentucky and later filed the Certificate of Title for the manufactured home, which listed Vanderbilt’s lien, in Bell County. In 2010, Epling filed a voluntary Chapter 7 bankruptcy petition. The trustee initiated a strong-arm proceeding to avoid Vanderbilt’s lien on the manufactured home, under 11 U.S.C. 544, because the lien was not properly perfected under the Kentucky law. The bankruptcy court granted the trustee summary judgment, concluding that Vanderbilt had failed to perfect its lien because it had filed the required title lien statement in its county of residence, rather than in Epling’s county of residence. The district court and Sixth Circuit affirmed. View "Vanderbilt Mortg. & Fin., Inc. v. Westenhoefer" on Justia Law