Justia Banking Opinion Summaries

This case required the Supreme Court to determine whether Appellee, Mortgage Electronic Registration Systems, Inc. (MERS) had "good cause" for failing to timely release a satisfied real estate lien it held on Gary and Sharon Hall's property. The circuit court concluded that the Halls were not entitled to statutory damages because, although MERS filed a release referencing the wrong mortgage, the Halls provided insufficient notice to MERS of the release's actual deficiency. Thus, the court found MERS had "good cause" not to file a new release once it checked and found it had already filed one. The court of appeals affirmed. The Supreme Court affirmed, holding that MERS satisfied the "good cause" requirement under these particular circumstances. View "Hall v. Mortgage Elec. Registration Sys., Inc." on Justia Law

In 2005, Appellants Billy and Jeanette Baber executed a promissory note ("Note") payable to Ameriquest Mortgage Company, Inc. ("Lender"). To secure payment of the Note, Appellants executed and delivered to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Lender, as mortgagee, a mortgage which conveyed and mortgaged to the mortgagee certain real property located in Oklahoma County. In both the Note and Mortgage, Ameriquest Mortgage Company is named as the Lender and Payee. Appellants defaulted on the Note. Appellee initiated foreclosure proceedings in 2006. A copy of the non-indorsed Note and Mortgage was included with the petition. In their answer, Appellants demanded strict proof of the ownership of the Note and Mortgage. Appellee U.S. Bank as trustee for the Lender, moved for summary judgment; in an attached affidavit, Appellee asserted it currently held both the Note and Mortgage at issue, and again produced a copy of both the unindorsed Note and Mortgage. The trial court granted judgment on the Note and foreclosure on the mortgage in favor of U.S. Bank. Appellants moved to vacate that judgment, arguing they were denied their statutory right to respond to the bank's cross-motion for summary judgment that the motion was not delivered to them in a timely fashion and that they did not receive notice of a hearing that occurred on September 5, 2010. Upon review, the Supreme Court found that the bank by its unindorsed Note and Mortgage, did not prove that it was entitled to enforce either. The Court reversed the trial court's grant of summary judgment and remanded the case for further proceedings. View "U.S. Bank National Ass'n v. Baber" on Justia Law

Plaintiff-Appellant Bruce McDonald took out a loan (Note) secured by a deed of trust on Colorado real property in favor of the lender, IndyMac Bank. Plaintiff made payments on the loan from its 2003 inception until April 2009, including while IndyMac was operated in receivership by the Federal Deposit Insurance Corporation (FDIC). The FDIC sold IndyMac to a holding company that operated it as Defendant-Appellee OneWest, F.S.B. and OneWest, as the new loan servicer, notified Plaintiff of the sale. Plaintiff stopped making payments because OneWest "did not provide [him] with the instrument or reasonable evidence of authority to make such a presentment" in accordance with his demands for the original Note. Ultimately, OneWest foreclosed on the property and obtained a Rule 120 Order authorizing the sale of the property, after it produced the original Note, the deed of trust, and a pooling and servicing agreement governing the Note. The property was sold in 2010. OneWest purchased it, later assigning its interest in the property to the Federal Home Loan Mortgage Corp (FHLMC). Plaintiff filed suit in state district court claiming that OneWest was not entitled to payment on the Note and the order of sale was void. FHLMC filed a forcible entry and detainer action against Plaintiff seeking to evict him; Plaintiff obtained a stay pending resolution of his state court action. Plaintiff then amended his state-court complaint to join FHLMC and include a quiet title action; neither defendant answered and the state district court granted a default judgment quieting title in Plaintiff. Onewest appealed the default judgment. While the appeal was pending, Plaintiff filed this federal action against OneWest Bank on civil RICO, pattern of racketeering activities, violation of the Fair Debt Collection Practices Act, fraud, and violation of the Colorado Consumer Protection Act. The federal district court noted that it probably lacked subject matter jurisdiction under the Rooker-Feldman doctrine given that Plaintiff was attempting to litigate the same claims that the Rule 120 court had rejected. The court ultimately dismissed the action on the basis of Plaintiff's failure to state a claim. Plaintiff appealed. Upon review of the case, the Tenth Circuit found that Plaintiff's counsel admitted that the issue of the validity of the Note was presented at state court, but was not covered by the notice of appeal to the Tenth Circuit. Furthermore, Plaintiff's Rule 60 motion was not filed until nearly six months after the notice of appeal was filed, and no new notice of appeal was entered on this issue. Therefore, the Tenth Circuit was unable to consider these claims in this appeal, and affirmed the judgment of dismissal. View "McDonald v. OneWest Bank" on Justia Law

Plaintiff-Appellant Jean Rosenfield appealed a district court's order that granted a motion to dismiss filed by Defendant-Appellee HSBC Bank, USA (HSBC). Plaintiff brought claims seeking declaratory and injunctive relief, and damages against HSBC for alleged violations of the Truth in Lending Act (TILA), contending her lender failed to make required disclosures in a residential loan refinancing agreement executed by the parties, and that because of this, she was entitled to a rescission of her loan agreement. Plaintiff argued that the district court erred in dismissing her claims and by holding that she failed to timely exercise her right of rescission within the applicable three-year time bar specified by TILA. Upon review, the Tenth Circuit agreed with the district court and affirmed its judgment. View "Rosenfield v. HSBC Bank, USA" on Justia Law

Investors joined together to buy property. To finance the purchase, they formed a distinct limited liability company, IPA, to negotiate and execute a loan on their behalf with Morgan Stanley. Okun was manager of IPA, which was not allowed to hold an ownership interest in any of the investors. Morgan Stanley sold the loan to an Okun-controlled entity, Lender, LLC, and agreed to offset the purchase price by the amount of funds available in escrow, reserve, and impound accounts, in which it held a security interest and which were, under the terms of the loan, required to reimburse investors for maintenance, taxes, and other property-related expenses. Lender LLC never reestablished the accounts, depriving the Investors of $1,361,184.63. Abandoning their suit against Lender, LLC, the investors claimed that Morgan Stanley breached their loan agreement and committed conversion. The district court granted summary judgment for Morgan Stanley. The Seventh Circuit affirmed. Morgan Stanley was not barred by the Note, the Mortgage, or the RSA from assigning its interest in the escrow accounts to Okun or structuring a sale of the loan as it wished; it committed neither breach of contract nor conversion. View "IP of A W. 86th St.t 1, LLC v. Morgan Stanley Mortg. Capital Holdings, LLC" on Justia Law

After the owner of a construction project defaulted on its obligations to various creditors, mortgage holder Pinnacle Bank foreclosed on the real property securing its mortgage. Junior mortgage holder American National Bank (ANB) and construction lienholder Michael's Construction, Inc. (Michael's) both sought payment from the surplus funds resulting from the foreclosure proceeding. The district court declared that ANB's mortgage was superior to Michael's lien, but denied ANB's request for contractual interest from the date of foreclosure through the date of final judgment. The Supreme Court (1) affirmed the district court's order regarding the priority of liens; but (2) reversed the order regarding interest, holding that the district court did not have the discretion to limit ANB's recovery by denying it interest at the contractual rate from the time of foreclosure through final judgment. Remanded to determine the amount of interest due ANB under the promissory note for that time period. View "Michael's Constr., Inc. v. Am. Nat'l Bank " on Justia Law

Westin Hills West Three Townhome Owners Association (the Association) appealed an order of the district court, which entered summary judgment in favor of the owner of the property, Federal National Mortgage Association, doing business as Fannie Mae (FNMA). In this foreclosure of lien case, the Association claimed that the recording of its declaration of covenants before the deed of trust gave the assessment lien recorded after the deed of trust first priority. The district court rejected this claim. The Supreme Court affirmed, holding that the court did not err in granting FNMA's motion for summary judgment, as the deed of trust was superior to any assessment lien mentioned in the declaration of the Association. View "Westin Hills Townhome Owners Ass'n v. Fed. Nat'l Mortgage Ass'n" on Justia Law

Mutual of Omaha Bank filed a petition seeking declaratory judgment against Patrick and April Kassebaum, who owed the Bank payments due under several promissory notes. In particular, the Bank sought to have the district court declare the rights of the parties with respect to an assignment of unliquidated proceeds or personal injury litigation executed by the Kassebaums. The Kassebaums filed a motion to dismiss or, in the alternative, a motion for summary judgment, alleging that the assignment was ineffective. The district court denied the motion, and the matter proceeded to trial. A jury entered a verdict in favor of the Bank in the amount of $126,376. The Supreme Court affirmed, holding that the Kassebaums' assignment was valid and enforceable under Nebraska law. View "Mut. of Omaha Bank v. Kassebaum " on Justia Law

In 2007, Debtor purchased a manufactured home, borrowing the funds from Creditor and granting a security interest. Creditor filed an application for first title and a title lien statement in Whitley County, Kentucky. The seller of the manufactured home is located in Whitley County. Debtor resided at the time in Laurel County, Kentucky. Later, the Kentucky Transportation Cabinet issued a Certificate of Title for the Manufactured Home showing the lien as being filed in Whitley County. In 2010, Debtor filed his voluntary Chapter 7 bankruptcy petition. The Chapter 7 Trustee initiated an adversary proceeding. The Bankruptcy Court avoided the lien, 11 U.S.C. 544. The Sixth Circuit affirmed. The statute requires that title lien statements be filed in the county of the debtor’s residence even if the initial application for certificate of title or registration is filed in another county under KRS 186A.120(2)(a). View "In re: Pierce" on Justia Law

Sheneman and his son purchased distressed properties, then flipped the properties by operating an elaborate mortgage fraud scheme that convinced unwitting buyers to purchase properties they could neither afford nor rent out after purchasing. Mortgage lenders were duped into financing the purchases through misrepresentations about the buyers and their financial stability. Four buyers with few assets and no experience in the real estate market purchased 60 homes. Most of the homes were eventually foreclosed upon. The buyers and lenders each suffered significant losses. Sheneman was convicted of four counts of wire fraud, 18 U.S.C. 1343, and sentenced to 97 months' imprisonment. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence and to application of sentencing enhancements for use of sophisticated means and for losses of more than one million dollars. View "United States v. Sheneman" on Justia Law