Justia Banking Opinion Summaries

In 2009, the SEC initiated the Nadel action following the collapse of a Ponzi scheme perpetrated by Arthur Nadel. In 2010, the district court entered an order establishing a claims administration process by which potential claimants could file proof of their claims against the receivership. Wells Fargo submitted a Proof of Claim as to its loan that secured one receivership property within the set claim bar date, but did not submit a Proof of Claim detailing its secured interest in the other two receivership properties. In 2012, Wells Fargo submitted a motion seeking a determination that the filing of Proofs of Claim was unnecessary to preserve its security interests in, and claims against, collateral in the Receiver's possession. In the alternative, Wells Fargo sought leave to file belated claims. The district court granted the Receiver's motion seeking a determination that Wells Fargo's failure to submit Proofs of Claim for the loans secured by two properties extinguished its interests in those properties, and the release of the proceeds from the sale of one of the properties for which Wells Fargo did not file a Proof of Claim. Determining that Wells Fargo's appeal was timely, the court concluded that the district court erred when it terminated Wells Fargo's security interest in the properties at issue. The court found bankruptcy law was both analogous and instructive here. The court reasoned that, in the bankruptcy context, a secured creditor’s lien remains intact through the bankruptcy, regardless of whether the creditor files a proof of claim. In this case, the court concluded that Wells Fargo's security interests remained intact as to the two properties for which it did not file a Proof of Claim in the district court. Accordingly, the court reversed and remanded. View "SEC v. Wells Fargo Bank, N.A." on Justia Law

Plaintiff appeals the district court’s denial of his motion for reconsideration of its earlier order denying on futility grounds plaintiff's motion for leave to amend his complaint. Plaintiff asserted in his motion that he had developed facts in discovery which showed that (1) a Bank employee knew that Charles Gordon, the chief executive officer of OPT Title and Escrow, Inc., had assisted Gordon in opening a bank account called an “escrow account” into which funds were to be wired by third parties with the expectation that the funds would be held in escrow by OPT Title; (2) the Bank employee knew that Gordon was stealing from the account; (3) the Bank employee assisted Gordon in committing the fraud; and (4) the Bank received at least a short-term financial benefit from allowing Gordon to use OPT Title’s account as a vehicle for his fraud. The court held that the district court erred in denying plaintiff's motion for reconsideration on the basis that even considering his new allegations set forth in his motion for reconsideration, he failed to state claims for relief. Accordingly, the court reversed and remanded for further proceedings. View "Hsi Chang v. JPMorgan Chase Bank, N.A." on Justia Law

Under Regulation X, 12 C.F. R. part 1024, which implements the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq., a loan servicer’s duty to evaluate a borrower’s loss mitigation application is triggered only when the borrower submits the application more than 37 days before the foreclosure sale. At issue is whether Ocwen, a loan servicer, had a duty to evaluate an application for loss mitigation options submitted by the Borrowers when, at the time the application was submitted, a foreclosure sale of the Borrowers’ property was scheduled to occur in two days. The court concluded that Regulation X requires the court to measure the timeliness of the Borrowers’ application using the date the foreclosure sale was scheduled to occur when they submitted their complete application. Because the Borrowers’ application was untimely, the court agreed with the district court that Ocwen had no duty to evaluate the Borrowers’ loss mitigation application. Therefore, the court affirmed the district court’s grant of summary judgment to Ocwen on the Borrowers’ claim seeking to hold Ocwen liable for failing to evaluate their loss mitigation application. The court also affirmed the district court’s grant of summary judgment with respect to the Borrowers’ claim based on Ocwen’s inadequate response to their notice of error. The court agreed with the district court that to survive summary judgment the Borrowers had to present evidence that they suffered actual damages or were entitled to statutory damages and that they failed to do so. View "Lage v. Ocwen Loan Servicing LLC" on Justia Law

New York law required CitiMortgage to file within 30 days a certificate of discharge with the county clerk to record that plaintiff had satisfied his mortgage. N.Y. Real Prop. Law 275; N.Y. Real Prop. Acts. Law 1921. When CitiMortgage failed to record the satisfaction of the mortgage until more than 90 days after the date of satisfaction, plaintiff filed a putative class action against CitiMortgage. The district court dismissed plaintiff's complaint. The court agreed with CitiMortgage that plaintiff lacks standing to maintain this action. The court dismissed the appeal for lack of jurisdiction because plaintiff has not alleged that CitiMortgage's violation of New York law caused or could cause him any harm. View "Nicklaw v. CitiMortgage, Inc." on Justia Law

Plaintiff filed suit against the assignee of his mortgage after his servicer failed to provide a payoff balance. The Truth in Lending Act (TILA), 15 U.S.C. 1641(e)(1)(A), creates a cause of action against an assignee for a violation that is “apparent on the face of the disclosure statement provided in connection with [a mortgage] transaction pursuant to this subchapter.” The court affirmed the dismissal of plaintiff's amended complaint because the failure to provide a payoff balance is not a violation apparent on the face of the disclosure statement. View "Evanto v. Federal National Mortgage Ass'n" on Justia Law