Justia Banking Opinion Summaries

In 1973, the brothers’ father, Marvin, purchased property in Sequatchie County. In 1997, he obtained a $200,000 home equity line of credit. A Deed of Trust was recorded. The terms of the loan required monthly interest payments until the maturity date—May 2007—when a final balloon payment of the entire outstanding balance would become due. The loan’s maturity date passed but Regions did not demand payment of the entire balance, refinance the loan, or foreclose on the property, but continued to accept monthly interest payments. After Marvin’s death, the brothers used the property for their trucking business and made payments on the loan through the business account. Regions learned of Marvin’s death in 2011 but continued to accept payments. In 2017, the brothers realized that Regions was sending statements demanding payment of the entire debt. A Regions representative informed them that the property would be foreclosed on with “no further discussion.” In 2018, Regions filed a foreclosure action, requesting a declaration that the loan’s maturity date had been extended. Based on an apparent tax lien, the IRS removed the case to federal court.The Sixth Circuit affirmed summary judgment in favor of the brothers. Tennessee law provides a 10-year statute of limitations for the enforcement of liens. The maturity date of the loan was never extended; Tennessee law requires a written instrument, “duly executed and acknowledged,” and “filed for record with the register of the county.” View "Regions Bank v. Fletcher" on Justia Law

In 2006, Respondent Jerome Silvernagel took out a second mortgage on a home. He agreed to make monthly payments to pay down the principal and 10% annual interest, with any remaining balance due in 2036. Silvernagel alone signed the promissory note, agreeing to repay the underlying loan. But both he and Respondent Dan Wu signed the deed of trust securing payment of the note. The deed of trust contained an acceleration clause, giving the lender the power to declare the entire loan immediately due and payable upon default. When exercised, acceleration authorized the lender to foreclose on the property to satisfy the outstanding debt and any related fees. In 2012, a bankruptcy court discharged Silvernagel’s personal liability on the mortgage under Chapter 7 of the Bankruptcy Code. Silvernagel had stopped making payments on the note before the discharge and made no payments since. The discharge prohibited creditors from attempting to collect the debt from Silvernagel directly, but it did not extinguish “the right to enforce a valid lien, such as a mortgage or security interest, against the debtor’s property after the bankruptcy.” In 2019, US Bank allegedly threatened to foreclose on the property if Silvernagel did not make payments on his mortgage. Silvernagel and Wu (hereinafter collectively, “Silvernagel”) filed this case in response, requesting declaratory relief to prevent US Bank’s enforcement of the deed of trust. He argued that US Bank’s interest was extinguished by the six-year statute of limitations on debt collection. Alternatively, he asserted that the doctrine of laches prevented enforcement of the agreement. The trial court dismissed the case, determining that US Bank’s claim had not accrued (meaning that the six-year limitation period hadn’t even commenced). A division of the court of appeals reversed, holding that the statute of limitations began to run upon Silvernagel’s 2012 bankruptcy discharge, barring US Bank’s claim. The Colorado Supreme Court reversed the judgment of the court of appeals: when there is no evidence that the lender accelerated payment on the mortgage agreement, a claim for any future payment doesn’t accrue until that payment is missed under the agreement’s original terms. View "US Bank, N.A. v. Silvernagel, et al." on Justia Law

An Ohio tax lien on real property is enforced through a foreclosure action, which may result in a sale of the property at auction. If such a sale occurs and the price exceeds the amount of the lien, the excess funds may go to junior lienholders or the owner. If the tax-delinquent property is abandoned, an auction may not be required; the property may be transferred directly to a land bank, free of liens. When that happens, the county gives up its right to collect the tax debt, and any junior lienholders and the owner get nothing. The properties at issue were transferred directly to county land banks. US Bank owned one foreclosed property and claims to have held mortgages on the other two. US Bank alleges that at the time of the transfers, the fair market value of each property was greater than the associated tax lien and that the transfers to the land banks constituted takings without just compensation.The Supreme Court of Ohio affirmed the dismissals of the suits. US Bank lacks standing in one case; it did not hold the mortgage at the time of the alleged taking. As to the other properties, US Bank had adequate remedies in the ordinary course of the law. It could have redeemed the properties by paying the taxes; it could have sought transfers of the foreclosure actions from the boards of revision to the common pleas courts; it could have appealed the foreclosure adjudications to those courts. View "US Bank Trust, National Association v. Cuyahoga County" on Justia Law

In this foreclosure proceeding, the Supreme Court vacated the judgment of the intermediate court of appeals (ICA) affirming the circuit court's order granting Deutsche Bank's motion for summary judgment on its complaint to foreclose a mortgage, holding that Deutsche Bank did not establish that it had standing to foreclose.In 2006, Blaine Yata executed a note and mortgage to New Century Mortgage Corporation. The mortgage was later assigned to Deutsche Bank National Trust Company, as trustee for Morgan Stanley ABS Capital I Inc. Trust 2006-NC4 (Deutsche Bank). When Yata defaulted on the note, Deutsche Bank brought a complaint to foreclose on the mortgage. The circuit court granted summary judgment for Deutsche Bank. The ICA affirmed. The Supreme Court vacated the ICA's judgment on appeal, holding (1) the ICA misapplied U.S. Bank Trust, N.A. v Verhagen, 489 P.3d at 419 (2021) in determining that Deutsche Bank's documents were admissible; and (2) even if the documents were admissible, they would not establish that Deutsche Bank had possession of the note when it filed the complaint. View "Deutsche Bank National Trust Co. v. Yata" on Justia Law

In this appeal from the court of appeals' decision affirming a default judgment in a foreclosure case the Supreme Court held that, when a defendant is known to be represented by a lawyer, a plaintiff must send a copy of the notice of intent to the defendant in addition to the defendant's lawyer.Plaintiff in this case served a foreclosure lawsuit on an attorney that Plaintiff argued held himself out as Defendant's lawyer in the foreclosure suit. The attorney filed an acceptance of notice on Defendant's behalf, but no one filed any response to the petition. The district court entered a default judgment against Defendant. The Supreme Court reversed and remanded the case, holding (1) Iowa R. Civ. P. 1.972(3) required Plaintiff in this case to mail notice of intent to both Defendant and Defendant's lawyer; and (2) Plaintiff's failure to comply with the rule's notice provisions left the district court without authority to enter the underlying default judgment against Defendant. View "Lincoln Savings Bank v. Emmert" on Justia Law

Philip and Jennie Bowling purchased their house via a promissory note in 1986. The loan was secured by a mortgage, which was eventually assigned to U.S. Bank National Association ("U.S. Bank"). A little over a decade later, the Bowlings began missing loan payments. Litton Loan Servicing, LP ("Litton"), the original servicer for the loan, sent the Bowlings several notices of default between July 1999 and June 2011, before eventually transferring service of the loan to another entity, Ocwen Loan Servicing, LLC ("Ocwen"). In September 2011, Ocwen allegedly notified the Bowlings that they were in default. Ocwen then scheduled a foreclosure sale, which took place in October 2012. A company called WGB, LLC ("WGB"), purchased the Bowlings' house at the foreclosure sale, but the Bowlings refused to vacate the property. A few weeks later, WGB filed an ejectment action against them. The Bowlings answered by asserting that they had not defaulted on the loan and that the foreclosure sale was invalid. The Bowlings also named as third-party defendants U.S. Bank, Ocwen, and Litton (collectively, "the banks"), alleging that the banks had mishandled the loan, the foreclosure sale, and related matters. In total, the Bowlings asserted 15 third-party claims against the banks. Rule 54(b) of the Alabama Rules of Civil Procedure gives a trial court discretion to certify a partial judgment as final, and thus immediately appealable, even though some piece of the case remains pending in the trial court. This appeal stemmed from a Rule 54(b) certification. After review, the Alabama Supreme Court concluded the Jefferson Circuit Court exceeded its discretion in certifying its partial judgment as immediately appealable. Because an improper Rule 54(b) certification cannot support an appeal on the merits of the underlying judgment, the Supreme Court dismissed this appeal for lack of jurisdiction. View "Bowling v. U.S. Bank National Association, et al." on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court granting summary judgment concluding that Plains Commerce Bank could not foreclose on certain trust real estate, that the trustee's mortgage on trust real estate was void and unenforceable, and that Plaintiff was entitled to attorney fees, holding that the attorney fee award was an abuse of discretion.Garry and Betty Beck treated an irrevocable spendthrift trust naming their three children as secondary beneficiaries. Their child Matthew Beck took out a substantial personal loan with Plains Commerce and granted a mortgage to the bank on trust real estate as partial collateral. When Matthew defaulted on the loan, Plains Commerce brought a foreclosure action against Matthew in his capacity as trustee. Jamie Moeckly intervened on behalf of the trust. The circuit court granted summary judgment for Jamie and further granted her motion for attorney fees. The Supreme Court reversed in part, holding (1) the circuit court erred in awarding attorney fees to Jamie as intervenor for the trust; and (2) because there was no mortgage foreclosure the statutory provision in S.D. Codified Laws 15-17-38 authorizing attorney fees "on foreclosure" did not apply. View "Plains Commerce Bank, Inc. v. Beck" on Justia Law

The Supreme Court reversed the judgment of the appellate court affirming the decision of the trial court to deny Defendant's motion to open the judgment and vacated the trial court's judgment of foreclosure by sale in favor of Plaintiff, The Bank of New York Mellon, holding that the appellate court erred.The trial court concluded that Defendant's motion to open constituted a collateral attack on an earlier judgment. Defendant appealed, arguing that Plaintiff lacked standing to pursue foreclosure, and thus, the trial court lacked jurisdiction over the action. The appellate court disagreed, concluding that Defendant's motion to open constituted an impermissible collateral attack on the foreclosure judgment. The Supreme Court reversed and remanded the case, holding that the appellate court (1) erroneously concluded that Defendant's motion to open was a collateral attack because, at the time Defendant filed his motion to open, the trial court had jurisdiction to open the judgment under Neb. Rev. Stat. 52-212a; and (2) this Court rejects the alternative ground that the trial court properly denied Defendant's motion to open in which he claimed that the trial court lacked subject matter jurisdiction. View "Bank of New York Mellon v. Tope" on Justia Law

Jimmy and Laura Bailey mortgaged their home in October 2009 to Quicken Loans (first mortgage). A week later, the Baileys entered into an equity line of credit a month later with ArrowPointe Federal Credit Union (the LOC) to the maximum principal amount. The ArrowPointe LOC was secured by a mortgage; ArrowPointe had record notice of the first mortgage. Shortly after taking out the second mortgage, the Baileys refinanced the first mortgage with Quicken in a greater amount than the previous first mortgage. The Baileys executed a “Title Company Client Acknowledgement” at the closing of the refinanced mortgage, which stated the only outstanding lien on the subject property was the first mortgage. There was no clear explanation in the record as to whether Quicken obtained a title examination to ascertain whether there were any outstanding additional liens; Quicken did not ask ArrowPointe to sign a subordination agreement, and ArrowPointe was unaware of the refinance. The Baileys used money from the refinance to pay the first mortgage. Quicken released the first mortgage and recorded the refinance. The Baileys ultimately defaulted on the LOC, and ArrowPointe filed an action to declare its lien had priority over the refinance. US Bank, assignee to the Quicken refinance, argued it was entitled to priority under the replacement mortgage doctrine. ArrowPointe argued it was entitled to priority because Quicken had record notice of its LOC at the time of refinancing. A referee concluded South Carolina did not recognize the replacement mortgage doctrine, and because there was no subordination agreement, ArrowPointe had priority under the race-notice statute. The referee ordered foreclosure and sale of the subject property. Finding no reversible error in the referee’s order, the South Carolina Supreme Court affirmed. View "ArrowPointe Federal Credit Union v. Bailey" on Justia Law

In 2004, Foster, a real estate investor, purchased Florida property, with a $1.1 million loan secured by a PNC mortgage. Foster and PNC had multiple disputes. PNC acquired force‐placed insurance. While the parties disputed that issue, Foster only made payments in the amount originally specified in a 2010 modification although the payments had increased as a result of the force‐placed insurance policies. In 2012, PNC began returning Foster’s payments as incomplete payments. As of May 2019, PNC claimed Foster owed more than $1.75 million. PNC reported delinquent payments to credit agencies; Foster’s credit score dropped.Foster’s lawsuit included a claim under the Fair Credit Reporting Act (FCRA) for PNC’s failure to investigate the two credit reporting disputes; a breach of contract claim regarding the force‐placed insurance policies; a breach of the implied duty of good faith and fair dealing claim for the insurance; and a breach of fiduciary duty claim for the alleged mishandling of the escrow account. PNC counterclaimed to seek judgment on the loan. After determining that Foster’s affidavit was conclusory and speculative as to proof of insurance and his loan payments and that his evidence of damages was too general and conclusory, the district court granted PNC judgment. The Seventh Circuit affirmed but found that the FCRA claim should be dismissed for lack of standing. Foster did not establish an injury-in-fact fairly traceable to PNC’s conduct. View "Foster v. PNC Bank, National Association" on Justia Law