Justia Banking Opinion Summaries

Spring Hill owned a 240-apartment complex in a Chicago suburb. In 2007, the owner converted the apartments into condominiums and attempted to sell them. Ginsberg recruited several people to buy units in bulk, telling them they would not need to put their own money down and that he would pay them after the closings. The scheme was a fraud that consisted of multiple components and false statements to trick financial institutions into loaning nearly $5,000,000 for these transactions. The seller made payments through Ginsberg that the buyers should have made, which meant that the stated sales prices were shams, the loans were under-collateralized, and the “buyers” had nothing at stake. The seller paid Ginsberg about $1,200,000; Ginsberg used nearly $600,000 to make payments the buyers should have made, paid over $200,000 to the buyers and their relatives, and kept nearly $400,000 for himself. The loans ultimately went into default, causing the financial institutions significant losses.The Seventh Circuit affirmed Ginsberg’s bank fraud conviction, 18 U.S.C. 1344. The evidence was sufficient for the jury to conclude Ginsberg knew that the loan applications, real estate contracts, and settlement statements contained materially false information about the transactions, including the sales prices, the down payments, and Ginsberg's fees. The court rejected a challenge to the admission of testimony by a title company employee. View "United States v. Ginsberg" on Justia Law

In 2002, Edella and Eric Johnson executed a $74,000 mortgage and associated promissory note, secured by property in Pittsburgh. The instrument was recorded and later assigned to the Bank of New York Mellon Trust Company (“Mellon”). Six years later, the Johnsons defaulted on their mortgage. In March 2009, Mellon, through its debt-collection counsel Phelan Hallinan & Schmieg, LLP (“Phelan”), filed a complaint in mortgage foreclosure. In that complaint, Phelan included a claim for attorneys’ fees of $1,300. Following a non-jury trial, the court entered judgment for Mellon. In March 2012, while the underlying mortgage foreclosure case was still ongoing, the Johnsons filed the instant class action against Phelan. When the Pennsylvania Loan Interest and Protection Law ("Act 6") was enacted in 1974, a “residential mortgage” was defined as “an obligation to pay a sum of money in an original bona fide principal amount of fifty thousand dollars ($50,000) or less.” In 2008, however, the General Assembly amended Act 6’s definition of a “residential mortgage” to increase the principal-amount ceiling to $217,873 - a base figure that automatically was adjusted for inflation annually. This appeal centered on whether that increased principal-amount ceiling should apply to mortgages that were executed before the 2008 amendment to Act 6. Specifically, the question presented was whether the $74,000 mortgage the Johnsons executed should have been considered a "residential mortgage" under Act 6, given that when Appellants' lender initiated foreclosure proceedings in 2009, the increased principal-amount ceiling had gone into effect. Because the Pennsylvania Supreme Court concluded that nothing in the 2008 legislation amending Act 6 demonstrated that the revised figure should have applied retroactively, the Supreme Court affirmed the Superior Court's order. View "Johnson v. Phelan Hallinan & Schmieg" on Justia Law

The Supreme Judicial Court affirmed the judgment entered by the superior court denying U.S. Bank Trust, N.A.'s motion to extend the time to file a notice of appeal as to its foreclosure complaint against James D. Keefe, holding that the trial court did not err in denying the motion as untimely.In denying U.S. Bank's motion seeking an extension of time to file its notice of appeal the trial court determined determined that U.S. Bank had shown good cause for the trial court to grant its motion to extend but that its authority to grant an extension of time had expired, and therefore, the motion was untimely. The Supreme Judicial Court affirmed, holding that the trial court did not err in its interpretation of the pertinent Rules of Appellate Procedure or in denying U.S. Bank's untimely motion for an extension of time. View "U.S. Bank Trust, N.A. v. Keefe" on Justia Law

A request for judicial relief under Nevada's Foreclosure Mediation Rules is the exclusive remedy under Nevada law for challenging a lender's conduct in the foreclosure mediation process.Plaintiffs filed suit alleging contractual and tortious breaches of the implied covenant of good faith and fair dealing against BNYM and its agents, Sables and Bayview. The Ninth Circuit affirmed the district court's dismissal of the complaint for failure to state a claim, holding that plaintiffs' claims rest on defendants' asserted failure to comply with the various requirements of the foreclosure mediation program, and these claims could have been raised in a timely request for review under the Foreclosure Mediation Rules. The panel explained that plaintiffs' exclusive remedy under Nevada law for addressing these deficiencies was a timely request for judicial review filed within the applicable 10-day period set forth in Nevada F.M.R. 20(2). Therefore, the district court correctly held that plaintiffs' state common-law claims and related requests for declaratory and injunctive relief failed to state a claim upon which relief could be granted. View "Tobler v. Sables, LLC" on Justia Law

The Supreme Court held that the entire amount of a homeowners' association's (HOA) yearly assessment can be included in the superpriority piece of an HOA's lien under Nev. Rev. Stat. 116.3116 so long as the assessment became due in the nine months preceding the HOA's recording of its notice of delinquent assessments.When Homeowners did not pay their 2011 yearly assessment, the HOA, in April 2011, recorded a notice of lien for delinquent assessments. A Bank, the beneficiary of the first deed of trust on the property, requested the super priority amount from the HOA's foreclosure agent and then tendered to the foreclosure agent an amount representing nine out of twelve months of assessments. The HOA continued with the foreclosure sale, and Appellants purchased the property. Appellants filed a complaint seeking to quiet title to the property. The district court granted summary judgment for the Bank, concluding that the Bank's tender cured the default on the superpriority portion of the HOA's lien and that the foreclosure sale did not therefore extinguish the Bank's deed of trust. The Supreme Court reversed, holding that because the Bank did not tender the entire superpriority amount before the HOA foreclosed on its lien, the foreclosure sale extinguished the Bank's deed of trust on the property. View "Anthony S. Noonan IRA, LLC v. U.S. Bank National Ass'n" on Justia Law

Defendant Javier Torres signed a promissory note (Note) secured by a residential mortgage (Mortgage). Torres defaulted on the Note. CitiMortgage, Inc., discovered that it had lost the original Note but had retained a digital copy setting forth its terms. CitiMortgage assigned the Mortgage and its interest in the Note to plaintiff Investors Bank (Investors). In this appeal, the issue presented for the New Jersey Supreme Court's review was whether Investors could enforce the Note. The Supreme Court affirmed the trial court: Investors Bank could enforce the note. Relying on two statutes addressing assignments, N.J.S.A. 2A:25-1 and N.J.S.A. 46:9-9, as well as common-law assignment principles, the Court held Investors had the right as an assignee of the Mortgage and transferee of the Note to enforce the Note. The Court construed N.J.S.A. 12A:3-309 to address the rights of CitiMortgage as the possessor of a note or other instrument at the time that the instrument was lost, but not to supplant New Jersey assignment statutes and common law in the setting of this appeal or to preclude an assignee in Investors’ position from asserting its rights according to the Note’s terms. Read together, "N.J.S.A. 12A:3-309, N.J.S.A. 2A:25-1, and N.J.S.A. 46:9-9 clearly authorized the assignment and entitled Investors to enforce its assigned Mortgage and transferred Note." View "Investors Bank v. Torres" on Justia Law

Alviso filed suit against numerous parties, including Wells Fargo, that were allegedly involved in a sham transaction by which a seller purported to sell a property to a buyer who obtained a mortgage loan from Aviso to fund the purchase. The title insurer involved in the sham transaction, WFG Title, is Alviso's successor-in-interest and is not prosecuting the action. The trial court granted summary judgment for Wells Fargo, finding that it had no legal obligation to maintain public title records and further finding that equity did not justify displacing Wells Fargo as senior lienholder.The Court of Appeal affirmed and held that the trial court properly granted Wells Fargo's motion for summary judgment. The court held that a fraudulent or forged deed does not convey valid title and, because Wells Fargo was not negligent, neither equitable estoppel nor Civil Code section 3543 is applicable. Finally, the court held that Alviso's remaining arguments are forfeited. View "WFG National Title Insurance Co. v. Wells Fargo Bank NA" on Justia Law

In 2006, Adams obtained a loan secured by a deed of trust against Vallejo residential property. Adams obtained a loan from an individual, Gallegos, secured by a separate deed of trust recorded against the same property. Adams defaulted on the junior loan, resulting in foreclosure and a trustee’s sale in 2008. Gallegos was the purchaser. The property was still subject to the senior loan; Adams remained the "Borrower,” named on the deed of trust. In 2017, Adams filed for chapter 7 bankruptcy. After her discharge, Adams filed a complaint, alleging “Violations of the Homeowners’ Bill of Rights” (HBOR), based on her 2016-2017 negotiations for a loan modification. She claimed that the defendants recorded notices of default and of trustee’s sale on the senior loan and failed to provide her with a single point of contact while her application was pending. The court granted the defendants judgment on the pleadings.The court of appeal reversed. While the complaint failed to allege facts sufficient to state a cause of action under the HBOR the trial court abused its discretion when it denied Adams leave to amend. The facts alleged in the complaint together with matters that are subject to judicial notice do not establish that the property is Adams’s principal residence as required under HBOR but there is a reasonable possibility that amendment of the complaint would cure this defect. View "Adams v. Bank of America" on Justia Law

A judicial foreclosure proceeding is not a form of debt collection when the proceeding does not include a request for a deficiency judgment or some other effort to recover the remaining debt. If a foreclosure plaintiff seeks not only to foreclose on the property but also to recover the remainder of the debt through a deficiency judgment, then the plaintiff is attempting to collect a debt within the meaning of the Fair Debt Collection Practices Act (FDCPA). But if the plaintiff is simply enforcing a security interest by retaking or forcing a sale of the property, without regard to any additional debt that may be owed, then the FDCPA does not apply.The Ninth Circuit affirmed the district court's dismissal of plaintiff's action under the Fair Debt Collection Practices Act over a judicial foreclosure proceeding in Oregon. The panel held that plaintiff pleaded no conduct by the defendants beyond the filing of a foreclosure complaint and actions to effectuate that proceeding. View "Barnes v. Routh Crabtree Olsen PC" on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment to Freddie Mac and M&T in a quiet title action over a foreclosed property in Nevada. At issue was whether a first deed of trust in favor of Freddie Mac, which had been placed under the conservatorship of the Federal Housing Finance Agency (FHFA), survived a non-judicial foreclosure sale of a Nevada residential property to satisfy an HOA superpriority lien. The panel held, and the parties agree, that the Housing and Economic Recovery Act (HERA) statute of limitations, 12 U.S.C. 4617(b)(12)(A), controls.The panel held that, under 12 U.S.C. 4617(b)(12), a quiet title action is a "contract" claim that is subject to a statute of limitations of at least six years; Freddie Mac and M&T Bank timely filed their quiet title action within six years of the foreclosure sale; and Freddie Mac's deed of trust, which had been placed under the conservatorship of FHFA, survived a non-judicial foreclosure sale of a Nevada residential property to satisfy a homeowners association superpriority lien. The panel also held that, although Freddie Mac and the Bank were not assignees of the FHFA, Freddie Mac was under the FHFA conservatorship, and the FHFA thus had all the rights of Freddie Mac with respect to its assets. Furthermore, although there was no contract between the purchaser and plaintiffs, the quiet title claims were entirely "dependent" upon Freddie Mac's lien on the property, an interest created by contract. View "M&T Bank v. SFR Investments Pool 1, LLC" on Justia Law