Justia Banking Opinion Summaries

Plaintiff filed suit against Fannie Mae, seeking to quiet title on the ground that Wells Fargo waived its right to foreclose by accepting payments for sixteen months after the initial default, so it could not sell the property at issue to Fannie Mae. The court concluded that Wells Fargo engaged only in conduct that was contemplated by the DOT’s non-waiver provisions and thus was entirely consistent with its intent to preserve the right to accelerate and foreclose. Therefore, plaintiff failed to allege any facts that would make his claim to relief plausible. Accordingly, the court affirmed the district court's dismissal of his suit. View "Martin v. Federal National Mtge Assoc." on Justia Law

The dispute in this receivership action centered on the receiver’s sale of commercial property owned by P.T.A. Realty, LLC to NMLM Realty, LLC. NMLM’s agent, Liberty Title & Escrow Company, failed to list all the municipal taxes owed on the property, resulting in an overpayment of funds to Bank of America, N.A. NMLM filed a petition for restitution against the Bank, which Liberty incorporated in its own petition for restitution against the Bank. The Bank argued that it was insulated from a restitution claim as a third-party creditor that received the payment in good faith and without notice of Liberty’s error. A hearing justice ruled in favor of the Bank. NMLM and Liberty filed a joint notice of appeal. The Supreme Court affirmed, holding (1) there was no evidence that, at the time the proceeds from the sale were disbursed, the Bank knew that it was receiving an overpayment of funds; and (2) therefore, the Bank received the excess funds in good faith, and NMLM and Liberty could not seek the return of their erroneous payment predicated on the theory of unjust enrichment. View "Bank of America, N.A. v. P.T.A. Realty, LLC, et al." on Justia Law

Various members of the Doty family gave three deeds of trust (DOT) conveying specific tracts of real estate to West Gate Bank, Inc. as security for certain loans. The DOTs also secured future advances given by the Bank. One advance was documented by Promissory Note 257. The Dotys defaulted on Note 257, and therefore, the Bank exercised its power of sale under one DOT and applied the funds generated by the sale to Note 257. The Dotys later brought a declaratory judgment action asking the district court to declare that the Bank was barred by Neb. Rev. Stat. 76-1013 from recovering any amount still owed under Note 257. The district court granted summary judgment in favor of the Dotys, concluding that the Bank was barred by the three-month statute of limitations in section 76-1013 from taking action to collect amounts due on Note 257. The Supreme Court reversed, holding that the district court (1) correctly determined that section 76-1013 precludes the Bank from bringing a personal deficiency action against the Dotys for the balance owed under Note 275; but (2) erred in determining that the three-month statute of limitations set forth in section 76-1013 applies to successive foreclosures on remaining collateral. Remanded. View "Doty v. West Gate Bank, Inc." on Justia Law

Plaintiff was a borrower on a home loan secured by a deed of trust. The deed of trust was assigned multiple times. After Plaintiff’s home was sold at public auction, Plaintiff filed this wrongful foreclosure action alleging that the assignment of the deed of trust to the foreclosing party bore defects rendering the assignment void. The court of appeals concluded that Plaintiff could not state a cause of action for wrongful foreclosure based on the allegedly void assignment because she lacked standing to assert improprieties in the assignment where, as an unrelated third party to that assignment, Plaintiff was unaffected by such deficiencies. The Supreme Court reversed, holding that a home loan borrower who has suffered a nonjudicial foreclosure has standing to sue for wrongful foreclosure based on an allegedly void assignment even though she was in default on the loan and was not a party to the challenged assignment because an allegation that the assignment was void will support an action for wrongful foreclosure. View "Yvanova v. New Century Mortgage Corp." on Justia Law

JAS, Inc. purchased certain property at a trustee’s sale. JAS later filed a quiet title action, naming several defendants, including Mortgage Electronic Systems, Inc. (MERS), Countrywide Home Loans, Inc., and OneWest Bank, FSB. Bank of America, N.A. (BOA), the successor to Countrywide, later intervened. The district court granted summary judgment in favor of BOA, concluding that the trustee’s sale of the property was void ab initio for failure to strictly follow Montana’s foreclosure laws. The Supreme Court affirmed, holding (1) the district court properly voided the sale on the basis of failure of strict compliance with the Small Tract Financing Act of Montana; and (2) the issue of JAS’s recovery of the funds it paid to OneWest Bank at the trustee’s sale was not properly before the Court. View "JAS, Inc. v. Eisele" on Justia Law

Petitioners executed a promissory note and mortgage in favor of Mortgage Electronic Registrations Systems, Inc. The notary acknowledgment on the mortgage was left blank. The mortgage was subsequently recorded with the county recorder. The interest in the mortgage was later assigned to Bank. Thereafter, Petitioners initiated a Chapter 13 bankruptcy and commenced an adversary proceeding seeking to avoid the mortgage as defectively executed. The bankruptcy court determined that its interpretation of Ohio Rev. Code 1301.401 would be dispositive in this case and certified to the Supreme Court questions of state law concerning whether section 1301.401 has an effect on the case. The Supreme Court answered that section 1301.401 applies to all recorded mortgages in Ohio and acts to provide constructive notice to the world of the existence and contents of a recorded mortgage that was deficiently executed under Ohio Rev. Code 5301.01. View "In re Messer" on Justia Law

Bank was the holder of a promissory note executed by Mortgagors and the mortgage that secured the note. After Mortgagors defaulted on the note Bank brought a foreclosure action and obtained an in rem judgment and decree of foreclosure against Mortgagors. More than two years after the entry of the original judgment, the property had not been sold, and Bank filed a notice of rescission of the foreclosure. Bank subsequently filed this foreclosure action and moved for summary judgment. Mortgagor counterclaimed for quiet title and wrongful foreclosure, arguing that she was entitled to own the property because the house was not sold within two years of the foreclosure decree. The district court granted summary judgment in favor of Bank. The Supreme Court affirmed, holding that the two-year special statute of limitations in Iowa Code 615.1(1) does not limit the period of time for a mortgagee to rescind a prior foreclosure judgment. View "U.S. Bank Nat’l Ass’n v. Callen" on Justia Law

At issue in this quiet title action was whether the two-year special statute of limitations in Iowa Code 615.1(1) applies only to judgment liens or whether the underlying debt is also extinguished after the end of the two-year period. The district court granted summary judgment in favor of Bank. The court of appeals affirmed. The Supreme Court affirmed, holding (1) in accordance with U.S. Bank Nat’l Ass’n v. Callen, the two-year special statute of limitations in section 615.1(1) does not apply to rescission; and (2) Mortgagor’s unclean hands defense to foreclosure has been waived. View "Kobal v. Wells Fargo Bank, N.A." on Justia Law

Greg and Jessica Skinner appealed a judgment dismissing the Skinners’ claim of negligence against U.S. Bank Home Mortgage. U.S. Bank retained insurance funds received after the Skinners’ home was destroyed by fire and released a portion of the funds as the home was rebuilt. There were serious defects in the new construction that ultimately culminated in the project being abandoned. The Skinners claimed that the district court improperly granted summary judgment because U.S. Bank owed the Skinners a fiduciary duties regarding the disbursement of the insurance proceeds. Finding no reversible error, the Supreme Court affirmed. View "Skinner v. U.S. Bank Home Mortgage" on Justia Law

Under Cal. Code Civ. Proc. 580b, when an individual borrows money from a bank to buy a home and the bank forecloses on the home, the bank can collect proceeds from the foreclosure sale but may not obtain a deficiency judgment against the borrower. In this case, a Borrower arranged a short sale of her home and sold her home to a third party for an amount that fell short of her outstanding loan balance to a Bank. The Bank then demanded the balance remaining on the Borrower’s home. The Borrower brought this declaratory action, claiming that section 580b prohibited the Bank from collecting the deficiency. The trial court sustained the Bank’s demurrer. The court of appeals reversed, concluding that section 580b’s protections apply after a short sale, not just a foreclosure. The Supreme Court affirmed, holding that section 580b applies to short sales just as it does to foreclosure sales. View "Coker v. JPMorgan Chase Bank" on Justia Law