Justia Banking Opinion Summaries

Articles Posted in Real Estate & Property Law
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Plaintiff, individually and on behalf of others similarly situated, filed suit against defendant, alleging violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Plaintiff alleged that defendant failed to provide the "amount of the debt" within five days after an initial communication with a consumer in connection with the collection of a debt, as required by section 1692g. The court declined to hold that a mortgage foreclosure complaint was an initial communication with a consumer in connection with the collection debt. In this case, the court concluded that neither the Foreclosure Complaint nor the July Letter were initial communications giving rise to the requirements of section 1692g(a). The court held, however, that the August Letter was an initial communication in connection with the collection of a debt, and that the Payoff Statement attached to the August Letter did not adequately state the amount of the debt. The Payoff Statement included a "Total Amount Due," but that amount may have included unspecified "fees, costs, additional payments, and/or escrow disbursements" that were not yet due at the time the statement was issued. The court explained that a statement was incomplete where, as here, it omits information allowing the least sophisticated consumer to determine the minimum amount she owes at the time of the notice, what she will need to pay to resolve the debt at any given moment in the future, and an explanation of any fees and interest that will cause the balance to increase. Accordingly, the court vacated and remanded for further proceedings. View "Carlin v. Davidson Fink LLP" on Justia Law

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After securing two loans with deeds of trust on the same property, Appellants paid off the smaller loan. A title agent filed a deed of reconveyance containing a scrivener’s error that mistakenly released Appellants’ interest in their property from the larger lien. Although the error was later corrected, Appellants argued that U.S. Bank, the beneficiary to the larger loan, did not have a valid, perfected lien prior to commencement of Appellants’ Chapter 7 bankruptcy proceedings. The district court granted U.S. Bank’s motion for judgment on the pleadings. The Supreme Court affirmed, holding that the lien at issue survived Appellants’ bankruptcy proceedings because the lien was unaffected by the scrivener’s error contained within the deed of reconveyance. View "Reeves v. US Bank National Ass’n" on Justia Law

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CitiMortgage, Inc. obtained a judgment of foreclosure against the family homestead of Homeowners - husband and wife. Homeowners attempted to appeal without legal representation. The Court of Appeals dismissed the attempted appeal with prejudice because of defects in Homeowners’ filings. Homeowners filed a petition to transfer, which the Supreme Court initially denied. On reconsideration, the Court vacated the order denying transfer and assumed jurisdiction over this appeal. The Court then affirmed the judgment of the trial court, holding that, under the facts presented in this case, the trial court correctly granted summary judgment in favor of CitiMortgage. View "McCullough v. CitiMortgage, Inc." on Justia Law

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Fried bought a home in 2007 for $553,330; an appraisal estimated the home’s value at $570,000. Fried borrowed $497,950 at a fixed interest rate. Because the loan-to-purchase-price ratio was more than 80%, Chase, the servicer for Fried’s mortgage required her to obtain private mortgage insurance. Fried had to pay monthly premiums for that insurance until the ratio reached 78%; projected to happen around March 2016. After the housing market crashed in 2008, Fried had trouble making mortgage payments. Chase modified Fried’s mortgage under the Home Affordable Mortgage Program, part of the Emergency Economic Stabilization Act of 2008, by reducing the principal balance to $463,737. By reassessing the value of Fried’s home at the time of the modification, Chase extended Fried’s mortgage insurance premiums to 2026. The district court declined to dismiss Fried’s purported class action under the Homeowners Protection Act, 12 U.S.C. 4901. The Third Circuit affirmed, finding that the Act does not permit a servicer to rely on an updated property value, estimated by a broker, to recalculate the length of a homeowner’s mortgage insurance obligation following a modification; the Act requires that the ending of that obligation remain tied to the initial purchase price of the home. View "Fried v. JP Morgan Chase & Co" on Justia Law

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David and Crystal Holm filed a wrongful foreclosure action against Wells Fargo Home Mortgage, Inc. for allegedly foreclosing on their home without right. The Holms also filed a quiet title action against Freddie Mac, which took title to the property after the foreclosure sale. After a jury-waived trial, the trial court entered judgment in favor of the Holms on their wrongful foreclosure claim, awarded them actual and punitive damages, and quieted title to the house in the Holms. The mortgage companies appealed. The Supreme Court affirmed in part and reversed in part, holding (1) the trial court did not abuse its discretion in sanctioning the mortgage companies for their discovery violations; (2) substantial evidence supported the trial court’s conclusion that Wells Fargo wrongfully foreclosed on the Holms’ house; but (3) the trial court erred in awarding damages and quieting title to the house in the Holms because the mortgage companies had a constitutional right to have a jury determine the extent of the Holms’ actual and punitive damages on the wrongful foreclosure claim. Remanded for a new trial before a jury on the Holms’ damages for wrongful foreclosure. View "Holm v. Wells Fargo Home Mortgage, Inc." on Justia Law

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Bank of America, N.A. filed a complaint seeking to foreclose on Homeowner’s property. Homeowner asserted numerous defenses, including that the Bank was not the lawful holder of the note and mortgage and therefore was not entitled to foreclosure. Homeowner also asserted four counterclaims. The circuit court granted Bank of America’s motion to dismiss Homeowner’s counterclaims. Thereafter, the court granted Bank of America’s motion for summary judgment, finding that the Bank was the “current holder” of the note and mortgage and was therefore entitled to foreclosure of the mortgage and sale of the property. The intermediate court of appeals (ICA) affirmed. The Supreme Court vacated the ICA’s judgment on appeal and vacated the circuit court’s judgment to the extent it granted summary judgment to Bank of America, holding (1) the circuit court erred in granting Bank of America’s motion for summary judgment; and (2) the ICA erred in determining that it did not have jurisdiction over the circuit court’s order granting the Bank’s motion to dismiss Homeowner’s counterclaims. Because the ICA did not reach the merits of Homeowner’s appeal with respect to the dismissal of her counterclaims, the case must be remanded to address the merits of Homeowner’s appeal of the dismissal of her counterclaims. View "Bank of America, N.A. v. Reyes-Toledo" on Justia Law

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JPMorgan Chase Bank, N.A. filed a complaint against Terrance Lowell seeking foreclosure on residential property. The complaint alleged that Lowell had defaulted by failing to make payments due on a promissory note. After a bench trial, the district court entered a judgment of foreclosure in favor of JPMorgan. The Supreme Judicial Court vacated the judgment, holding (1) the district court properly admitted certain documents pursuant to the business records exception to the hearsay rule; but (2) the district court erred by finding that the notice of default issued by JPMorgan complied with the requirement established in Me. Rev. Stat. 14, 6111(1-A)(C), which is a required element of foreclosure. Remanded for entry of judgment in favor of Lowell. View "JPMorgan Chase Bank, N.A. v. Lowell" on Justia Law

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At issue in this case was a non-judicial foreclosure conducted pursuant to Haw. Rev. Stat. Chapter 667 Part I, which was repealed by the legislature by Act 182. Russell Hungate, the property owner, filed a complaint and first amended complaint alleging that Deutsche Bank National Trust Company (Deutsche Bank) and David B. Rosen and his law office (collectively, Rosen), the attorney hired by Deutsche Bank to conduct the foreclosure of Hungate’s property, violated statutory, contractual, and common law duties and committed unfair or deceptive acts or practices. The circuit court granted Rosen’s motion to dismiss and then granted Deutsche Bank’s motion to dismiss. The Supreme Court vacated in part the circuit court’s orders, holding (1) the circuit court erred in dismissing the majority to Hungate’s claims alleging Haw. Rev. Stat. Chapter 667 Part I violations against Deutsche Bank; (2) Duetsche Bank must use reasonable means to obtain the best price for a foreclosed property; and (3) the circuit court erred in dismissing Hungate’s unfair or deceptive acts or practices claim against Deutsche Bank, but property dismissed Hungate’s claim against Rosen. View "Hungate v. Rosen" on Justia Law

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Homeowners obtained loans from Bank for the construction of a new home and entered into an agreement with Contractor to complete the new home construction. When Homeowners defaulted on payments owed to Contractor and on both loans, the house was sold at foreclosure, and Homeowners filed for bankruptcy. Contractor filed a fourth amended complaint against Homeowners, who were later dismissed as parties, and Bank. Following a trial the court granted summary judgment for Bank on Contractor’s claims of fraud and civil conspiracy. The Supreme Court reversed. After remand, Contractor filed a fifth amended complaint, which differed from the fourth amended complaint in several respects. The district court determined that the election of remedies doctrine and judicial estoppel required a dismissal of Contractor’s claims. The Supreme Court reversed, holding (1) Contractor’s claims were consistently premised on the existence of a contract, and therefore, no election was required; and (2) Contractor’s claims were based on different facts and obligations, and therefore, both could be pursued. View "deNourie & Yost Homes, LLC v. Frost" on Justia Law

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In 2009, the SEC initiated the Nadel action following the collapse of a Ponzi scheme perpetrated by Arthur Nadel. In 2010, the district court entered an order establishing a claims administration process by which potential claimants could file proof of their claims against the receivership. Wells Fargo submitted a Proof of Claim as to its loan that secured one receivership property within the set claim bar date, but did not submit a Proof of Claim detailing its secured interest in the other two receivership properties. In 2012, Wells Fargo submitted a motion seeking a determination that the filing of Proofs of Claim was unnecessary to preserve its security interests in, and claims against, collateral in the Receiver's possession. In the alternative, Wells Fargo sought leave to file belated claims. The district court granted the Receiver's motion seeking a determination that Wells Fargo's failure to submit Proofs of Claim for the loans secured by two properties extinguished its interests in those properties, and the release of the proceeds from the sale of one of the properties for which Wells Fargo did not file a Proof of Claim. Determining that Wells Fargo's appeal was timely, the court concluded that the district court erred when it terminated Wells Fargo's security interest in the properties at issue. The court found bankruptcy law was both analogous and instructive here. The court reasoned that, in the bankruptcy context, a secured creditor’s lien remains intact through the bankruptcy, regardless of whether the creditor files a proof of claim. In this case, the court concluded that Wells Fargo's security interests remained intact as to the two properties for which it did not file a Proof of Claim in the district court. Accordingly, the court reversed and remanded. View "SEC v. Wells Fargo Bank, N.A." on Justia Law