Justia Banking Opinion Summaries

In 2008, plaintiffs obtained a loan from Quicken and granted a mortgage on their property to Quicken’s nominee, Mortgage Electronic Registration Systems, “MERS.” The note and mortgage ultimately were conveyed to Bank of America. Plaintiffs defaulted. Bank of America foreclosed by advertisement under Mich. Comp. Laws 600.3201. The Federal Home Loan Mortgage Corporation, “Freddie Mac,” purchased the property at a foreclosure sale. The plaintiffs did not exercise their “equity of redemption” within the six-month statutory redemption period under Michigan law. Freddie Mac initiated eviction. In their counter-complaint, plaintiffs argued that the foreclosure was fraudulent and violated Michigan law because there was no chain of title evidencing ownership by Bank of America, which, therefore, did not have standing to foreclose; Freddie Mac was negligent for failing to evaluate plaintiffs’ loan under the Home Affordable Modification Program; the foreclosure and subsequent eviction were “wrongful” under Michigan law; and Freddie Mac violated their due process rights because its status as a government actor precluded foreclosure by advertisement. The Sixth Circuit affirmed dismissal of plaintiffs’ claims, reasoning that any negligence was not attributable to Freddie Mac and compliance with Michigan’s foreclosure-by-advertisement procedures satisfied the requirements of the Due Process Clause. View "Rush v. Freddie Mac" on Justia Law

Plaintiffs obtained a home loan and granted a mortgage that was eventually assigned to Bank of America (BOA). Plaintiffs defaulted in 2007. In 2011, plaintiffs received a letter explaining the right to seek a loan modification. Plaintiffs sought assistance from NMCA; met with BOA’s counsel; provided information and forms prepared with help from NMCA; and were offered reduced payments for a three-month trial period. If all trial period payments were timely, the loan would be permanently modified. Plaintiffs allege that they made the three payments, but did not receive any further information, and that BOA returned two payments. BOA offered plaintiffs a permanent loan modification, instructing plaintiffs to execute and return a loan modification agreement. Plaintiffs do not allege that they returned the agreement. BOA never received the documents. BOA sent a letter informing them that because they were in default and had not accepted the modification agreement, a nonjudicial foreclosure would proceed. Notice was published. The property was sold at a sheriff’s sale. BOA purchased the property, and executed a quitclaim deed to Federal National Mortgage Association, which filed a possession action after the redemption period expired. Six months later, plaintiffs sued, claiming Quiet Title; violations of due process rights; and illegal/improper foreclosure and sheriff’s sale. The district court dismissed all claims. The Sixth Circuit affirmed, holding that the Michigan foreclosure procedure does not violate due process. View "Garcia v. Fed. Nat'l Mortg. Ass'n" on Justia Law

Defendant executed a promissory note in favor of the entity that was soon to merge with First Tennessee Bank National Association. The note was secured by a deed of trust for property in California. First Tennessee later filed a complaint against Defendant, alleging that he was in default on the note and seeking damages in the amount of $274,467. The district court granted summary judgment in favor of Defendant, concluding that First Tennessee’s claim was barred by a California statute of limitations. First Tennessee appealed, arguing that the district court erred in finding that the limitations period was not tolled by either a California statute or provision of the Servicemembers Civil Relief Act (SCRA). The Supreme Court affirmed, holding (1) the California tolling statute could not be applied against Defendant, a nonresident of California, without violating the Commerce Clause; and (2) although Defendant was a member of the National Guard, he was neither on “active duty” during his membership nor had he ever been called to active service, and therefore, the SCRA provided no basis to toll the limitations period. View "First Tenn. Bank Nat’l Ass’n v. Newham" on Justia Law

Plaintiffs, pension funds, filed suit, seeking to hold BNYM responsible for the losses allegedly caused by Countrywide's breach of its representations and warranties in connection with 530 residential mortgage-backed securities (RMBS) created between 2004 and 2008 for which BNYM acts as trustee. The court affirmed the portion of the district court's order dismissing plaintiffs' claims related to the trusts in which they did not invest for lack of standing because plaintiffs' claims do not implicate the "same set of concerns" as those of absent class members who purchased certificates issued by trusts in which no named plaintiff invested; reversed the portion of that order denying BNYM's motion to dismiss plaintiffs' Trust Indenture Act (TIA), 15 U.S.C. 77aaa-77aaaa, claims related to the PSA-governed (pooling and servicing agreements) New York trusts where the New York certificates at issue are exempt from section 304(a)(2) of the TIA; and the court remanded in part for further proceedings. View "Retirement Board v. Bank of New York Mellon" on Justia Law

In 2011, in response to an increased number of foreclosures, the City of Springfield enacted two ordinances addressing properties left vacant during or after the foreclosure process. The mediation ordinance established a program requiring mandatory mediation between mortgagors and mortgagees. The foreclosure ordinance required owners of buildings that are vacant or undergoing foreclosure to register with the City. Six banks holding mortgage notes on properties in the City (Plaintiffs) filed suit seeking declaratory and injunctive relief from the enforcement of the ordinances. The federal district court allowed the City’s motion for summary judgment. Plaintiffs appealed, and the First Circuit certified two questions to the Supreme Judicial Court. The Court answered (1) the foreclosure statute preempts the mediation ordinance in whole but does not preempt the foreclosure ordinance; (2) the foreclosure ordinance is preempted by the Massachusetts Oil and Hazardous Material Release Prevention Act and the state sanitary code; and (3) the foreclosure ordinance does not impose an unlawful tax in violation of the Constitution of the Commonwealth of Massachusetts. View "Easthampton Savings Bank v. City of Springfield" on Justia Law

Plaintiff filed suit seeking declaratory and injunctive relief against a Georgia post-judgment garnishment statute. Plaintiff obtained funds from a workers' compensation settlement after suffering a permanent disability on the job. Plaintiff also received Social Security disability payments. One of plaintiff's creditors issued a garnishment summons that resulted in the freezing of plaintiff's worker's compensation funds for four months before plaintiff's creditor finally conceded that plaintiff's funds were exempt from garnishment and agreed to the dissolution of the hold on his funds. The court concluded that plaintiff had Article III standing and that his claim is not moot. The court declined to pass on the constitutionality of Georgia's post-judgment garnishment statute before ensuring that all interested parties have had notice and a chance to present all evidence and argument, and the district court has had an opportunity to examine and consider that evidence and argument on the merits. Accordingly, the court reversed the district court's sua sponte dismissal of plaintiff's suit for lack of standing and remanded, because it was substantially likely that plaintiff and his wife's exempt funds will soon be the subject of a garnishment summons again. View "Strickland v. Alexander, et al." on Justia Law

In 2012, St. Louis County adopted an ordinance that implemented a foreclosure mediation program requiring lenders to provide residential borrowers an opportunity to mediate prior to foreclosure. Two bankers filed suit against the County seeking a declaratory judgment establishing that the ordinance was invalid. The circuit court sustained the County’s motion for summary judgment, concluding that the County possessed the charter authority to enact the ordinance, the ordinance was a valid exercise of the County’s police power, the ordinance was not preempted by state law, and the fees associated with the ordinance did not violate the Hancock Amendment. The Supreme Court reversed, holding that the ordinance was void and unenforceable ab initio because the County exceeded its charter authority in enacting the ordinance. View "Mo. Bankers Ass’n, Inc. v. St. Louis County, Mo." on Justia Law

This case arose out of the collapse of SIV, managed by Cheyne and structured by Morgan Stanley. PSERS and Commerzbank appealed from the final order of judgment denying class certification, dismissal of Commerzbank's claim for lack of standing; and dismissal of PSERS's claim because its presence as a party would destroy complete diversity, the sole basis of subject matter jurisdiction. The court affirmed the denial of class certification and dismissal of PSERS; held that it was not a permissible exercise of discretion for the district court to limit Commerzbank's ability to establish its standing; certified to the New York Court of Appeals the question of whether a reasonable trier of fact could find that Commerzbank had acquired from a third party that had purchased securities a fraud claim against Morgan Stanley; and certified the question whether, if Commerzbank has standing, a reasonable trier of fact could hold Morgan Stanley liable for fraud based on the present record. View "Pennsylvania Public School Employees’ Retirement System v. Morgan Stanley" on Justia Law

This case stemmed from the district court’s approval of the Utah Department of Financial Institutions’ (UDFI) seizure of America West Bank Members, L.C. (Bank) and the appointment of the Federal Deposit Insurance Corporation as receiver of the Bank. The Bank filed a complaint against the State, UDFI, and the director of UDFI (collectively, the State), alleging breach of contract, breach of the covenant of good faith and fair dealing, constitutional takings, and due process violations. The district court dismissed the Bank’s claims for lack of sufficient factual allegations under Utah R. Civ. P. 12(b)(6). The Supreme Court affirmed, holding (1) the district court did not err when it dismissed the Bank’s claims; and (2) the district court did not hold the Bank to a heightened pleading standard. View "America West Bank Members, L.C. v. State" on Justia Law

The respondents in this case were fourteen non-residents who were named in a petition filed by the New Hampshire Bank Commissioner, as liquidator for Noble Trust Company (Noble) and Aegean Scotia Holdings, LLC (Aegean Scotia). They appealed a superior court order denying their motions to dismiss for lack of personal jurisdiction. Each respondent had signed an individual account application with Noble Trust Company, which had a New Hampshire address. Respondents' accounts were funded with either a check deposit (mailed to New Hampshire) or wired electronically. As respondents tried to check on their accounts, withdraw from or close their accounts, they encountered problems. Respondents' petition alleged Noble was involved in a Ponzi scheme, in which the Bank was using their money to cover losses of other investors. They sought to set aside transfers of money from Noble to the respondents, impose constructive trusts, and recover for unjust enrichment and conversion. The respondents moved to dismiss the suit for lack of personal jurisdiction. The trial court denied the motion, finding that the court could exercise personal jurisdiction over the respondents on the basis that: (1) respondents Carlson and the Schweitzers filed proofs of claim in the liquidation proceeding against Noble in New Hampshire; and (2) the remaining respondents had sufficient minimum contacts with New Hampshire. The Supreme Court found no reversible error with the superior court's decision, and remanded the case for further proceedings. View "New Hampshire Bank Commissioner v. Sweeney" on Justia Law