Justia Banking Opinion Summaries

The Sherzers obtained two loans secured by mortgages on their home: one for $705,000 and one for $171,000. The lender, Homestar, later assigned both to HSBC. Less than three years after the closing date the Sherzers wrote a letter to Homestar and HSBC, asserting that Homestar had failed to provide all disclosures required by Truth in Lending Act (TILA), 15 U.S.C. 1601 TILA. The letter claimed that these failures were material violations and that the Sherzers were exercising their right to rescind the loan agreements. HSBC agreed to rescind the smaller loan. The Sherzers filed suit, more than three years after their closing date, seeking a declaration of rescission. The district court dismissed the suit as untimely. The Third Circuit reversed. An obligor's right to rescind a loan pursuant to TILA "expire[s] three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first,"Hardiman 15 U.S.C. 1635(f). An obligor must send valid written notice of rescission before the three years expire; the statute says nothing about filing a suit within that three-year period. View "Sherzer v. Homestar Mortg. Servs." on Justia Law

Plaintiffs filed a Chapter 7 bankruptcy petition and sought to surrender their home. When Plaintiffs' mortgage lenders (collectively, Beneficial) refused to foreclose or otherwise take title to the residence, Plaintiffs demanded that the mortgage lien be released. After Beneficial also refused to release the mortgage lien, Plaintiffs began an adversary proceeding claiming a discharge injunction violation. The bankruptcy court found Beneficial did not violate the discharge injunction. The bankruptcy appellate panel affirmed. Plaintiffs appealed, arguing that because the facts of this case so closely mirrored those in Pratt v. General Motors Acceptance Corp., the same result should follow. The First Circuit Court of Appeals affirmed the bankruptcy court's judgment, holding that the bankruptcy court's legal conclusions were correct and that the court did not err in its judgment. View "Canning v. Beneficial Me., Inc." on Justia Law

Mortgagors appealed from the district court's dismissal of their claims against the FHLMC and other financial institutions, a law firm, and others. Mortgagors asserted twenty-one claims under Minnesota law related to defendants' rights to the mortgages on the mortgagors' homes. The court rejected the mortgagors' argument that the district court improperly dismissed their claims against the law firm and their contention that their complaint made out a Minnesota slander-of-title action. The court also concluded that the mortgagors did not make out a quiet title claim and the district court properly dismissed their claims against the financial institutions. View "Peterson, et al v. CitiMortgage, Inc., et al" on Justia Law

Mortgagors filed suit in Minnesota state court against defendants, alleging numerous deficiencies in the assignment of their mortgages and in their foreclosures. In this appeal, plaintiffs asserted that the district court erred in denying their motion to remand when it concluded that they failed to make out claims for slander of title, declaratory judgment, and quiet title, and in mistakenly relying on Jackson v. Mortgage Registration Sys. Because the court recently concluded that nearly identical claims against a resident law firm had no reasonable basis in law and fact under Minnesota law and constituted fraudulent joinder, the court rejected plaintiffs' contention that the district court erred by dismissing the claims against the law firm and denying remand; the court disposed of the slander-of-title claim because the court recently upheld the dismissal of a virtually identical claim in Butler v. Bank of America; the court denied plaintiffs' request for declaratory judgment to determine whether defendants had "any true interest in or right to foreclose on their properties" and whether the notes were properly accelerated by the correct party; and the court affirmed the district court's dismissal of the quiet title action. View "Karnatcheva, et al v. JP Morgan Chase Bank, et al" on Justia Law

This case arose from a land development project dispute where the Retreat took out a short-term purchase loan from a Georgia bank to finance the acquisition of the land. At issue was the district court's interpretation of an exclusion in a title insurance policy issued by First American to the bank and the district court's decision that First American was entitled to summary judgment based on that exclusion. The court held that the district court correctly interpreted the terms of the title insurance contract; the district court's conclusion that the affidavit at issue would be admissible at trial was not an abuse of discretion; and the evidence demonstrated that the bank was fully aware of the Retreat property's lack of dedicated access when it extended the purchase loan and took out the insurance policy from First American. Because there were no genuine issues of material fact in dispute and because First American was entitled to judgment as a matter of law, summary judgment was appropriate. View "Cynergy, LLC v. First American Title Ins. Co." on Justia Law

Selma Development, LLC (Selma) obtained a loan from TierOne Bank (TierOne) that was guaranteed with six individual guaranty agreements. Selma later defaulted on the note. The property was sold at a trustee's sale, but the sale price was insufficient to cover the debt. TierOne brought an action seeking payment from the guarantors (Defendants). After a hearing, the trial court concluded that the fair market value of the property greatly exceeded the amount received from the trustee's sale. The court then granted TierOne's motion for summary judgment and entered judgment against Selma for $306,230 and against Defendants for $586,229. The Supreme Court vacated the trial court's judgment remanded, holding (1) once the trial court determined that the fair market value of the property was greater than the amount received at the trustee's sale, it had to determine whether the Nebraska Trust Deeds Act applied to the guarantors, and accordingly, its order determining fair market value was not a final order; and (2) Defendants offered evidence which created a genuine issue of material fact regarding their defenses, precluding summary judgment. View "Selma Dev., LLC v. Great W. Bank" on Justia Law

Plaintiffs sued Wells Fargo for fraudulent misrepresentation and promissory estoppel after Wells Fargo initiated foreclosure when plaintiffs stopped paying on their mortgage loan. The court held that plaintiffs have not stated a plausible claim for fraudulent misrepresentation regarding the modification of their home loan and therefore, the district court did not err in dismissing plaintiffs' claims under Rules 12(b)(6) and 9(b). The court also held that plaintiffs have not stated a plausible claim for promissory estoppel and the district court did not err in dismissing their claim. View "Freitas, et al v. Wells Fargo Home Mortgage, Inc." on Justia Law

Plaintiff bank (Bank) claimed to be the holder of a mortgage given by Defendant. Bank filed a complaint in equity in the land court under the Massachusetts Soldiers' and Sailors' Civil Relief Act to determine if Defendant was entitled to foreclosure protections under the Federal Servicemembers Civil Relief Act (SCRA). Defendant conceded she was not entitled to protection under the SCRA but moved to dismiss the complaint on the ground that Bank lacked standing to bring a servicemember proceeding because it was not the clear holder of her note or mortgage. The land court denied Defendant's motion, determining that Bank had standing based on its right to purchase Defendant's mortgage. The court then authorized Bank to make an entry and to sell the property covered by the mortgage. The Supreme Court vacated the land court's judgment, holding (1) because Defendant was not entitled to appear or be heard at the servicemember proceeding, the land court should not have accepted or entertained Defendant's filings; (2) only mortgagees or those acting on behalf of mortgagees having standing to bring servicemember proceedings; and (3) in the present case, the judge used the incorrect standard in making the determination that Bank had standing. Remanded. View "HSBC Bank USA, N.A. v. Matt" on Justia Law

Klie purchased property with financing from Coldwell Banker, which assigned its rights to the Federal National Mortgage Corporation (Fannie Mae) but continued to service the loan. The assignment was never recorded. In 2007, servicing rights transferred to JP Morgan. Coldwell Banker assigned its rights in the note and mortgage (none) to JP Morgan, which reassigned to Fannie Mae. Chase, an arm of JP Morgan, serviced the loan until Klie died. With the loan in default, Chase’s law firm, RACJ, prepared an assignment of the note and mortgage that purported to establish Chase’s right to foreclose and filed a foreclosure actionf, naming Glazer, a beneficiary of Klie’s estate. The court entered a decree of foreclosure, but later vacated and demanded that RACJ produce the original note. Chase dismissed the foreclosure without prejudice. Glazer filed suit, alleging that Chase and RACJ violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and Ohio law by falsely stating that Chase owned the note and mortgage, improperly scheduling a foreclosure sale, and refusing to verify the debt upon request. Chase and RACJ moved to dismiss. The district court dismissed. The Sixth Circuit reversed, holding that mortgage foreclosure is debt collection under the Act. View "Glazer v. Chase Home Fin. LLC" on Justia Law

Taxpayer owned fifteen acres of land in Ludlow, Massachusetts. Taxpayer obtained a commitment from Bank to make a loan to fund development on the land. The commitment stipulated that the loan would be made to Taxpayer or "nominee" and that, if Taxpayer assigned the commitment to a nominee, he would be required to guarantee the loan personally. Taxpayer subsequently transferred title of the property to an LLC he formed. Later, the loan became delinquent, and Bank foreclosed on unsold lots in the development. After selling the lots at auction, Bank filed this interpleader action to determine who had the right to the surplus proceeds. The United States claimed an interest in the fund, as did the town of Ludlow. At issue was who was the "nominee" of Taxpayer for purposes of the federal tax lien that attached to Taxpayer's property. The district court held in favor of the United States, concluding that the LLC was Taxpayer's nominee. The First Circuit Court of Appeals affirmed, holding that the nature of the relationship between Taxpayer pointed to the fact that the LLC was a "legal fiction," and therefore, the district court did not err in concluding that the LLC was Taxpayer's nominee. View "Berkshire Bank v. Town of Ludlow, Mass." on Justia Law