Justia Banking Opinion Summaries

Conlin refinanced with a loan from Bergin, secured by a mortgage containing a provision that recognized MERS as a nominee for Bergin and Bergin’s successors. Bergin sold the note to the Real Estate Mortgage Investment Conduit, for which U.S. Bank was trustee. The mortgage was held by MERS, and serviced by GMAC. In 2008, MERS assigned the mortgage to “U.S. Bank National Association as trustee.” In 2010 Orlans sent Conlan notice (Mich. Comp. Laws 600.3205a), of default and of his ability to request loan modification, stating that it was sent on behalf of GMAC as “the creditor to whom your mortgage debt is owed or the servicing agent for the creditor.” In 2011, Orlans published notice of foreclosure sale, stating that “the mortgage is now held by U.S. Bank National Association as Trustee by assignment.” The notice was also posted on the property, which was sold at a sheriff’s sale on March 31. On October 28, 2011, Conlin sought damages and to have the foreclosure sale set aside. The district court dismissed. The Sixth Circuit affirmed. Even if the “robo-signed” assignment were invalid, Conlin was not prejudiced. He has not clearly shown fraud in the foreclosure process, as required for a challenge after expiration of the six-month redemption period. View "Conlin v. Mrtg. Elec. Registration Sys., Inc." on Justia Law

In 2004, El Camino executed equipment leases with Cyberco, a corporation held out to be a computer sales and consulting business. Cyberco actually operated under several names and was engaged in fraud. Its affiliate, Teleservices, a shell corporation, was represented as an arms-length computer manufacturer. The equipment to be leased by El Camina, which likely never existed, was allegedly manufactured by Teleservices and delivered to Cyberco, which released payment to Teleservices. In 2002, Huntington established a banking relationship with Cyberco. Cyberco used its accounts to deposit funds from El Camino. Huntington investigated a series of overdrafts. Ultimately Cyberco elected to undergo a “gradual migration” from Huntington, and Huntington agreed to credit extensions for Cyberco during the transition. El Camino purchased more than $25 million in computer equipment. El Camino sued Huntington for conversion, aiding and abetting conversion, aiding and abetting fraud, and unjust enrichment. The district court granted summary judgment on the first three claims, concluding that El Camino could not establish the requisite level of knowledge to sustain aiding and abetting and conversion claims. It later dismissed the unjust enrichment claim. The Sixth Circuit affirmed, stating that findings, in a related bankruptcy case, that Huntington did not act in good faith, were irrelevant. View "El Camino Res., LTD. v. Huntington Nat'l Bank" on Justia Law

Between 1982 and 1997, Alfes took out student loans funded by FFELP. Alfes consolidated his student-loan debt; SunTrust was the lender and obligee on the consolidated note and the Pennsylvania Higher Education Assistance Agency was the guarantor. Alfes sought relief under Chapter 7 of the Bankruptcy Code. The bankruptcy court entered a general discharge in 2005. Subsequently, Alfes sought a declaration that the debt under the consolidated note had been discharged, arguing that the consolidated note no longer constituted an “educational loan” under 11 U.S.C. 523(a)(8)(A) and had been discharged with his ordinary debt. The bankruptcy court initially entered a default judgment against the defendants. Following a series of transfers, reopening, and various motions, the bankruptcy court ultimately held that a holder of consolidated student loans is an educational lender and that the consolidated loan was, therefore, not dischargeable absent a showing of undue hardship. The district court and Sixth Circuit affirmed. View "Alfes v. Educ. Credit Mgmt. Corp." on Justia Law

Plaintiffs and defendants obtained class certification and settlement approval for a nationwide class action involving three related lawsuits, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692-1692p and state law, based on the practice of “robo-signing” affidavits in debt collections. Eight individuals objected. The Sixth Circuit reversed, holding that the disparity in the relief afforded under the settlement to the named plaintiffs (exoneration of debts, $2000, and prospective injunctive relief) and the unnamed class members ($17 and prospective injunctive relief) made the settlement unfair. The class notice was inadequate and, although the class satisfies four of the six certification requirements (numerosity, commonality, typicality and predominance), the representation is not adequate under Rule 23(a) nor is the class action vehicle superior. View "Vassalle v. Midland Funding LLC" on Justia Law

For more than 20 years, Kurlemann built and sold luxury homes in Ohio. In 2005-2006 he borrowed $2.4 million to build houses in Mason. When neither sold, he enlisted realtor Duke, who found two straw buyers, willing to lie about their income and assets on loan applications that Duke submitted to Washington Mutual. Both buyers defaulted. Duke pled guilty to seven counts, including loan fraud and making false statements to a lending institution, and agreed to testify at Kurlemann’s trial. A jury convicted Kurlemann of six counts, including making false statements to a lending institution, 18 U.S.C. 1014; and bankruptcy fraud, 18 U.S.C. 157. The district court sentenced Kurlemann to concurrent 24-month sentences and ordered him to pay $1.1 million in restitution. The district court sentenced Duke to 60 months. The Sixth Circuit affirmed the bankruptcy fraud conviction, based on Kurlemann’s concealment of his interest in property, but reversed and remanded his false statements conviction, finding that the trial court improperly instructed the jury that concealment was sufficient to support conviction. The court also reversed Duke’s sentence, finding that the court failed to explain the sentence it imposed. View "United States v. Kurlemann" on Justia Law

Eleven plaintiffs who obtained home loans from Countrywide Bank, sought to challenge alleged racial disparities dating back to 2002 and resulting from Countrywide’s loan-pricing policy for home mortgages. The district court denied class certification, finding that the proposed class failed to satisfy Federal Rule of Civil Procedure 23(a)’s commonality requirement. The Sixth Circuit affirmed. Plaintiffs challenged policies that grant broad discretion to local agents; they do not claim that a uniform policy or practice guides how local actors exercise their discretion, such that the corporate guidance caused or contributed to the alleged disparate impacts. To justify certification, class members must unite acts of discretion under a single policy or practice, or through a single mode of exercising discretion; the mere presence of a range within which acts of discretion take place will not suffice to establish commonality. View "Miller v. Countrywide Fin. Corp." 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

Wells Fargo foreclosed on Frank’s home by advertisement. Frank is deceased and Mitan is the estate representative. The Federal Home Loan Mortgage Corporation purchased the home at a sheriff’s sale in February 2010, and the redemption period expired six months later. Two weeks prior to expiration, Mitan sued, claiming that the foreclosure was contrary to Michigan law. The district court dismissed. The Sixth Circuit reversed, holding that the district court did not establish an adequate record to determine whether Wells Fargo complied with the law. If the foreclosure was void, Mitan’s rights were not terminated at the end of the redemption period. When a lender wishes to foreclose by advertisement on a principal residence, it must provide the borrower with notice designating a person whom the borrower may contact to negotiate a loan modification. Mich. Comp. Laws 600.3205a(1). If the borrower requests negotiation, the lender’s designated person may request certain documents. If negotiations fail, the designated person is required to apply statutory calculations to determine whether the borrower qualifies for a loan modification. If the borrower qualifies, the lender may not foreclose by advertisement unless the designated person offers a modification agreement that the borrower fails to timely return. View "Mitan v. Fed. Home Loan Mortg. Corp." on Justia Law

In 2005, the Coyers entered into a mortgage agreement with Option One to purchase property in Linwood, Michigan. Subsequently, HSBC purchased the mortgage. After the Coyers allegedly stopped making payment to HSBC in 2010, HSBC began foreclosure proceedings pursuant to the mortgage contract’s “power of sale” clause. The Coyers filed a complaint asserting numerous allegations concerning alleged illegal conduct routinely practiced in the mortgage industry. They claimed: breach of fiduciary duty; negligence; common law fraud; breach of implied covenant of good faith and fair dealing; violation of the Truth in Lending Act, 15 U.S.C. 1601; and intentional infliction of emotional distress. The district court entered judgment on the pleadings in favor of HSBC. The Sixth Circuit affirmed. View "Coyer v. HSBC Mortg. Servs/, Inc." on Justia Law

Boggio and wife, Sarah, resided in Texas. Boggio served military tours, and assigned Sarah power of attorney. They separated; Boggio left the state. Six months later Sarah purchased a car with financing through USAA. Sarah allegedly signed Boggio’s name, unbeknownst to him, on the check issued to the car dealership. The car was later listed on Boggio’s car insurance. The divorce decree confirmed that the car was acquired during the marriage, identified the associated loan as a marital debt, and stated that Sarah alone would be responsible for payment. Later, Boggio, residing in Cincinnati, experienced credit problems due to missed payments. Boggio wrote to consumer reporting agencies and USAA disputing his status as co-obligor. USAA attempted to mail Boggio (but not his counsel) a copy of the allegedly forged check, but the letter was sent to an incorrect Texas address. Because Boggio would not go to Texas to file a police report, USAA declared the dispute a civil matter between the Boggios. In Boggio’s suit under the Fair Credit Reporting Act, the district court granted summary judgment to USAA. The Sixth Circuit reversed. A reasonable jury could find that USAA’s investigation and notices were unreasonable.View "Boggio v. USAA Fed.l Sav. Bank" on Justia Law