Justia Banking Opinion SummariesArticles Posted in US Court of Appeals for the Ninth Circuit
U.S. Bank, N.A. v. White Horse Estates Homeowners Ass’n
The Ninth Circuit affirmed the district courts' grants of summary judgment in favor of the HOA in an action brought by the Bank, seeking to set aside the HOA's foreclosure sale of real property in Nevada. The district court held that, because the mortgage savings clause in the applicable covenants, conditions, and restrictions (CC&Rs) did not affect the sale, the sale could not be set aside. Therefore, title vested with SFR Investments, the purchaser at the HOA sale.The panel predicted that the Nevada Supreme Court would adhere to its unpublished decisions, and hold that a mortgage-savings clause, by itself, did not constitute unfairness that affects a sale. The panel held that the clause was void as a matter of Nevada law, because it plainly conflicted with Nev. Rev. Stat. 116.3116(2), which required liens for unpaid assessments to have superpriority status, and Nev. Rev. Stat. 116.1104, which provided that the priorities cannot be modified by agreement. The panel also held that the mortgage-savings clause was void under the terms of the CC&Rs themselves. The panel explained that the Bank did not introduce any evidence whatsoever in this case that the mortgage-savings clause affected this sale. The panel rejected the Bank's remaining arguments and concluded that no unfairness arose from the HOA's processing of payments. Finally, the notice at issue did not violate due process. View "U.S. Bank, N.A. v. White Horse Estates Homeowners Ass'n" on Justia Law
McShannock v. JP Morgan Chase Bank NA
In 2005-2007, the borrowers obtained residential home mortgages on California properties. California law would normally have entitled them to “at least 2 percent simple interest per annum” on any funds held in escrow, California Civil Code Section 2954.8. The lender, a federal savings association organized and regulated under the Home Owners’ Loan Act of 1933 (HOLA), 12 U.S.C. 1461, did not pay interest because HOLA preempts California law. In a suit against the lender’s successor, Chase, a national bank organized and regulated under the National Bank Act, 12 U.S.C. 38, the district court denied the lender’s motion to dismiss; the Ninth Circuit has held that there is no “conflict preemption” between the National Bank Act and the California law.The Ninth Circuit reversed. HOLA field preemption principles applied to the claims against Chase even though its conduct giving rise to the complaint occurred after it acquired the loans in question. Because California’s interest-on-escrow law imposed a requirement regarding escrow accounts; affected the terms of sale, purchase, investment in, and participation in loans originated by savings associations; and had more than an incidental effect on the lending operations of savings associations, it was preempted by 12 C.F.R. 560.2(b)(6) and (b)(10), and 560.2(c). View "McShannock v. JP Morgan Chase Bank NA" on Justia Law
Tobler v. Sables, LLC
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
Barnes v. Routh Crabtree Olsen PC
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
M&T Bank v. SFR Investments Pool 1, LLC
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
CitiMortgage, Inc. v. Corte Madera Homeowners Ass’n
Citi filed suit against Corte Madera Homeowners Association for wrongful foreclosure, breach of the statutory duty of good faith by Nev. Rev. Stat. 116.1113, and quiet title. Nev. Rev. Stat. 116.3116(1) allows HOAs to pursue liens on members' homes for unpaid assessments and charges. The district court granted summary judgment in favor of defendants.The Ninth Circuit affirmed the district court's ruling regarding the adequacy of the lender's tender, holding that BANA's offer did not constitute valid tender. The panel held that 7510 Perla Del Mar Ave Tr. v. Bank of America, N.A., 458 P.3d 348, 350-51 (Nev. 2020) (en banc) -- which held that a mere offer to pay at a later time, after the superpriority amount was determined, does not constitute a valid tender -- did not alter the validity of Citi's tender because BANA insisted on the same condition that Perla Del Mar prohibited. The panel held that the district court did not err when it concluded that Citi was obligated to satisfy the superpriority portion of the lien in order to protect its interest. Furthermore, the district court did not err by observing that Citi's offer to pay nine months' assessments was not the equivalent of an offer to pay the superpriority portion of Corte Madera's lien. Therefore, in light of Perla Del Mar, the district court did not err by ruling that Citi's tender was impermissibly conditional. The panel rejected Citi's alternative arguments. However, the panel remanded for reconsideration of the complaint's allegation that Corte Madera's foreclosure notices violated the homeowner's bankruptcy stay. View "CitiMortgage, Inc. v. Corte Madera Homeowners Ass'n" on Justia Law
Perez v. Mortgage Electronic Registration Systems, Inc.
Plaintiffs filed two pre-foreclosure actions against MERS and the banks holding their mortages, challenging their authority to foreclose on plaintiffs' properties. The Ninth Circuit affirmed the district courts' dismissal of the complaints for failure to state plausible claims for relief under California law. The panel followed the decisions of the California appellate courts in holding that California law does not permit preemptive actions to challenge a party's authority to pursue foreclosure before a foreclosure has taken place.The panel held that plaintiffs' pre-foreclosure judicial actions preemptively challenging the banks' authority to foreclose on the their properties in the future are not viable under California law. The panel also held that the district court did not abuse its discretion by denying plaintiffs leave to amend where the proposed amendments would not have changed the determination. View "Perez v. Mortgage Electronic Registration Systems, Inc." on Justia Law
U.S. Bank, N.A. v. Thunder Properties, Inc.
The Ninth Circuit certified to the Nevada Supreme Court the following questions: (1) When a lienholder whose lien arises from a mortgage for the purchase of a property brings a claim seeking a declaratory judgment that the lien was not extinguished by a subsequent foreclosure sale of the property, is that claim exempt from statute of limitations under City of Fernley v. Nevada Department of Taxation, 366 P.3d 699 (Nev. 2016)? (2) If the claim described in (1) is subject to a statute of limitations: (a) Which limitations period applies? (b) What causes the limitations period to begin to run? View "U.S. Bank, N.A. v. Thunder Properties, Inc." on Justia Law
Shaw v. Bank of America Corp.
The Ninth Circuit affirmed the district court's dismissal of a Truth in Lending Act (TILA) claim for lack of subject matter jurisdiction based on the jurisdiction-stripping provisions of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). In this case, plaintiff sought rescission of a mortgage loan under TILA, claiming that the lender provided him with defective notice of the right to cancel when the loan was signed.The panel held that FIRREA's administrative exhaustion requirement applied, and plaintiff had a claim under FIRREA because his cause of action gave right to an equitable remedy of rescission and was susceptible of resolution by FIRREA's claims process. The panel agreed with the Fourth Circuit and concluded that there was no requirement that the loan have passed through an FDIC receivership. The panel also held that plaintiff's claim related to an act or omission, the lender failed to comply with TILA, and the FDIC was appointed as receiver.However, the panel held that plaintiff failed to exhaust his administrative remedies with the FDIC because his complaint included no allegations that he presented his TILA claim to the FDIC before filing suit. Furthermore, because subject matter jurisdiction was lacking when this action was filed, plaintiff's later communications with the FDIC did not prevent dismissal of his TILA claim. Finally, the district court did not abuse its discretion in denying plaintiff’s request for further discovery. View "Shaw v. Bank of America Corp." on Justia Law
Nayab v. Capital One Bank
A consumer suffers a concrete injury in fact when a third-party obtains her credit report for a purpose not authorized by the Fair Credit Reporting Act (FCRA); a consumer-plaintiff need allege only that her credit report was obtained for a purpose not authorized by the statute to survive a motion to dismiss; and the defendant has the burden of pleading it obtained the report for an authorized purpose.The Ninth Circuit reversed the district court's dismissal of plaintiff's claim under the FCRA for lack of standing and failure to state a claim. The panel held that plaintiff pleaded facts sufficient to give rise to a reasonable inference that the Bank obtained her credit report for an unauthorized purpose. In this case, she pleaded that she did not have a credit relationship with the Bank of the kind specified in 15 U.S.C. 1681b(a)(3)(A)–(F), the Bank submitted numerous credit report inquires to Experian, and plaintiff put forth factual assertions which negative each permissible purpose for which Capital One could have obtained her credit report and for which she could possibly have personal knowledge. View "Nayab v. Capital One Bank" on Justia Law