Justia Banking Opinion Summaries

OneWest commenced a foreclosure action against defendant. The district court denied defendant's cross-motion to dismiss and granted OneWest's motion for summary judgment. The district court held in part that a national bank such as OneWest is a citizen only of the state in which its main office is located - not also of the state of its principal place of business - and that OneWest’s main office is indisputably in California. The court agreed with the district court and joined its sister circuits in holding that, for purposes of subject matter jurisdiction, a national bank is a citizen only of the state in which its main office is located. The court also concluded that OneWest had standing to foreclose based on LSA's assignment of all of its rights that FDIC previously had to defendant's loan as the conservator and receiver of IndyMac Federal. Accordingly, the court affirmed the judgment. View "OneWest Bank, N.A. v. Melina" on Justia Law

Plaintiff-lender Deutsche Bank National Trust Company (as trustee) appealed a superior court decision to grant defendant-borrower Kevin Pinette's motion to dismiss. The lender tried to foreclose on property of Pinette, but the superior court dismissed its claims on foreclosure, the unpaid balance on a promissory note, and a deficiency judgment on the ground that they were barred by claim preclusion, as lender had previously instituted an identical action against borrower in 2013, which had been dismissed for failure to prosecute. On appeal, the lender argued that because the 2013 action did not actually adjudge the enforceability of the note and mortgage, the dismissal did not have preclusive effect. Further, lender urged the Vermont Supreme Court to hold that in the mortgage foreclosure context, dismissals with prejudice did not bar subsequent actions based upon new defaults occurring after dismissal of the prior action. Finding no reversible error, the Supreme Court affirmed. View "Deutsche Bank v. Pinette" on Justia Law

In 2014, the trustee under a deed of trust conveyed the Parrish property to the Federal National Mortgage Association (Fannie Mae), which sent the Parrishes a notice to vacate and filed a summons for unlawful detainer in the general district court. The Parrishes alleged that the foreclosure was invalid because their deed of trust incorporated 12 C.F.R. 1024.41(g), which, they asserted, prohibits foreclosure if a borrower submitted a completed loss mitigation application more than 37 days before the foreclosure sale. They alleged that they had submitted such an application. The court awarded Fannie Mae possession. On appeal, Fannie Mae argued that the court should exclude any defense contesting the foreclosure’s validity because the lower court lacked subject matter jurisdiction to try title in a proceeding on unlawful detainer. Fannie Mae contended that because the circuit court’s subject matter jurisdiction on appeal from the general district court was derivative of the general district court’s jurisdiction, the circuit court also lacked jurisdiction. The court awarded Fannie Mae possession. The Supreme Court of Virginia vacated, restoring the parties to their status quo before the unlawful detainer proceeding. Courts not of record lack power to try title unless expressly conferred by the General Assembly. The court cited Code sections 16.1-77(3) and 8.01-126 and acknowledged the practical implications of its holding. View "Parrish v. Fed. Nat'l Mortgage Ass'n" on Justia Law

222 plaintiffs, homeowners, in 22 related mass actions against various financial institutions and mortgage loan servicers, appeal from an order dismissing those actions after the trial court sustained without leave to amend defendants' demurrers to an “omnibus” third amended complaint. Each mass action involves numerous plaintiffs whose loans originated with and/or were serviced by a single defendant or related affiliates. The omnibus complaint asserted seven causes of action. On appeal, plaintiffs challenge only the trial court's denial of their request for leave to amend their unfair business practices cause of action (the UCL claim) to add factual allegations to support an entirely different theory that was suggested in seven sentences of the 29-page complaint. The court concluded that the trial court did not abuse its discretion by denying plaintiffs leave to amend their complaint because they failed to show that their proposed additional facts are sufficient to state a UCL claim. Moreover, even if their proposed additional facts were sufficient, they clearly demonstrate that the claim could not be prosecuted as a mass action because the 222 plaintiffs' claims do not arise out of the same transaction or occurrence, as required by Code of Civil Procedure section 378. Accordingly, the court affirmed the judgment. View "Aghaji v. Bank of America" on Justia Law

After a foreclosure case, Davis filed various claims against an entity that he calls “Wells Fargo U.S. Bank National Association as Trustee for the Structured Asset Investment Loan Trust, 2005-11” as the purported holder of Davis’s mortgage. Davis also sued Assurant, believing it to be the provider of insurance on his home. His claims arise from damage that occurred to his house after Wells Fargo locked him out of it, which went unrepaired and worsened into severe structural problems. The district court dismissed Davis’s claims against Wells Fargo, on the grounds that claim preclusion and a statute of limitations barred recovery, and claims against Assurant for lack of subject matter jurisdiction. The Court reasoned that Davis lacked standing to bring those claims because he sued the wrong corporate entity, namely Assurant, when he should have sued Assurant’s wholly-owned subsidiary, ASIC. The Third Circuit affirmed dismissal of Wells Fargo, but vacated as to Assurant. Standing is a jurisdictional predicate, but generally focuses on whether the plaintiff is the right party to bring particular claims, not on whether the plaintiff has sued the right party. View "Davis v. Wells Fargo" on Justia Law

The Lindsays were minority shareholders of the 304 Corporation; its principal asset was Mid City Bank. In 2010, the Nebraska Department of Banking and Finance and the FDIC began an examination of the bank. In 2011, the Department appointed the FDIC as the bank's receiver, stating that “‘large commercial real estate loan and poor management practices . . . led to a deterioration of the bank’s capital’” so that there was “‘no option but to declare the insolvent institution receivership.’” The bank reopened and regained good standing. In 2014, the FDIC filed suit, alleging that Fitl “was grossly negligent and breached his fiduciary duties,” 12 U.S.C. 1821(d)(2)(A)(i). The Lindsays also filed suit, alleging breach of fiduciary duties. The court dismissed. The Nebraska Supreme Court affirmed. The Lindsays’ claims are similar to all other shareholders’ claims and did not arise from a special duty, since the injury was not “separate and distinct.” The district court correctly concluded that the Lindsays’ claims were derivative in nature and that as a result of the FDIC lawsuit, the Lindsays had no standing to bring a derivative action on behalf of the corporation. View "Lindsay v. Fitl" on Justia Law

The Federal National Mortgage Association (Fannie Mae) filed a complaint for summary process in the Housing Court to establish its right to possession of the Rego house, which Fannie Mae purchased at a foreclosure sale. The Regos argued that the foreclosure sale conducted by GMAC, which held the mortgage, was void because GMAC's attorneys had not been authorized by a prior writing to undertake the actions set forth in G. L. 244, 14. They also asserted an equitable defense and counterclaims. The judge granted Fannie Mae summary judgment "as to possession only," and scheduled a bench trial on the counterclaims, but later dismissed the counterclaims for lack of subject matter jurisdiction. The Massachusetts Supreme Judicial Court vacated. The foreclosure suffered no defect on the asserted ground that GMAC failed to provide such authorization to its attorneys, but the Housing Court has limited authorization to entertain counterclaims and an equitable defense to the foreclosure sale in the summary process action. View "Fed. Nat'l Mortgage Ass'n v. Rego" on Justia Law

Garofolo took out a $159,700 home-equity loan. She made timely payments and paid off the loan in, 2014. Ocwen had become the note’s holder. A release of lien was promptly recorded in Travis County, but Garofolo did not receive a release of lien in recordable form as required by her loan’s terms. Garofolo notified Ocwen she had not received the document. Upon passage of 60 days following that notification, and still without the release, Garofolo sued, alleging violation of the home-equity lending provisions of the Texas Constitution and breach of contract. She sought forfeiture of all principal and interest paid on the loan. The federal district court dismissed. The Fifth Circuit certified questions of law to the Texas Supreme Court, which responded that the constitution lays out the terms and conditions a home equity loan must include if the lender wishes to foreclose on a homestead following borrower default, but does not create a constitutional cause of action or remedy for a lender’s breach of those conditions. A post-origination breach of terms and conditions may give rise to a breach-of-contract claim for which forfeiture can sometimes be an appropriate remedy. When forfeiture is unavailable, the borrower must show actual damages or seek some other remedy such as specific performance. View "Garofolo v. Ocwen Loan Serv., L.L.C." on Justia Law

The Fangmans sought to represent a class of approximately 4,000 to 5,000 individuals who, from 2009 to 2014, retained Genuine Title for settlement and title services and utilized various lenders for the purchase and/or refinancing of their residences, allegedly as a result of referrals from the lenders. All of the lenders are servicers of federally related mortgage loans. The complaint alleges an illegal kickback scheme and that “sham companies” that were created by Genuine Title to conceal the kickbacks, which were not disclosed on the HUD-1 form. After dismissing most of the federal claims, the federal court certified to the Maryland Court of Appeals the question of law: Does Md. Code , Real Prop. [(1974, 2015 Repl. Vol.) 14-127 imply a private right of action?” The statute prohibits certain consideration in real estate transactions. That court responded “no” and held that RP 14-127 does not contain an express or implied private right of action, as neither its plain language, legislative history, nor legislative purpose demonstrates any intent on the General Assembly’s part to create a private right of action. View "Fangman v. Genuine Title, LLC" on Justia Law

In this action for wrongful foreclosure, the homeowner, Monica Sciarratta, alleged that as a result of a void assignment of her promissory note and deed of trust, the entity that conducted a nonjudicial foreclosure sale on her home had no interest in either the underlying debt or the subject property. In Yvanova v. New Century Mortgage Corp., (62 Cal.4th 919 (2016)), the California Supreme Court held that the homeowner has standing to sue for wrongful foreclosure. However, Yvanova did not address "any of the substantive elements of the wrongful foreclosure tort," and in particular did not address "prejudice . . . as an element of wrongful foreclosure." The issue this case presented was the question of "prejudice" left open in Yvanova: The Court of Appeal found that policy considerations that drove the standing analysis in Yvanova compelled a similar result in this case. "[A] homeowner who has been foreclosed on by one with no right to do so -by those facts alone- sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure. When a non-debtholder forecloses, a homeowner is harmed by losing her home to an entity with no legal right to take it. Therefore under those circumstances, the void assignment is the proximate cause of actual injury and all that is required to be alleged to satisfy the element of prejudice or harm in a wrongful foreclosure cause of action." The opposite rule, urged by defendants in this case, would allow an entity to foreclose with impunity on homes that were worth less than the amount of the debt, even if there were no legal justification whatsoever for the foreclosure. "The potential consequences of wrongfully evicting homeowners are too severe to allow such a result." The Court of Appeal reversed the judgment of dismissal entered after the trial court erroneously sustained a demurrer to Sciarratta's first amended complaint without leave to amend, and remanded for further proceedings. View "Sciarratta v. U.S. Bank" on Justia Law