Justia Banking Opinion Summaries

Wanda Stephens purchased property in Little Rock consisting of Tract A and Tract B. In 2001, Wanda executed a quitclaim deed to the Stephens Family Limited Partnership (SFLP) and mortgaged the property to Regions Mortgage. In 2002, Wanda executed a warranty deed conveying Tract A to herself for life with a remainder to Greg Stephens and his heirs. In 2005, Wanda mortgaged Tract B of the land to Chase Bank. Regions Bank (Region) subsequently made a loan to Wanda, taking as collateral a mortgage on Tract A and Tract B. Wanda defaulted on the first mortgage, and Regions Mortgage foreclosed on both tracts. $308,828 remained from the sale. Chase and Regions asserted claims to the monies, and SFLP and the Stephens heirs intervened. All parties claimed to be first in priority. The circuit court granted partial summary judgment against Chase, finding that the interests of Regions, SFLP, and the Stephens heirs were superior to Chase's. The Supreme Court reversed and remanded, holding that because the question of whether Chase had actual notice of the Stephens heirs' claim on the property was a question of fact, summary judgment was inappropriate. View "Chase Bank USA, N.A. v. Regions Bank" on Justia Law

These appeals, heard in tandem, challenged two separate judgments entered in the district court in favor of TD Bank and Capital One, respectively, dismissing plaintiffs' claims that the banks violated Article 52 of the New York Civil Practice Law and Rules (CPLR), as amended by the Exempt Income Protection Act (EIPA), 2008 N.Y. Laws Ch. 575. Plaintiffs, as judgment debtors, alleged that the banks failed to provide them with certain required notices and forms, restrained their accounts, and assessed them fees, all in violation of the EIPA. Because these appeals presented unresolved questions of law, the court reserved decision and certified the issues to the New York State Court of Appeals. View "Cruz v. TD Bank, N.A." on Justia Law

M&T Real Estate Trust foreclosed on commercial mortgages executed by Defendant. After a public auction, the referee sold M&T the property. M&T's attorney twice declined to accept or retain physical possession of the referee's deed dated May 11, 2010. As a result, the referee took back the deed and other closing documents and ultimately executed a deed on August 9, 2010 when M&T's attorney accepted it on behalf of MAT Properties, Inc. The deed was recorded on August 17, 2010. M&T subsequently filed a motion seeking to confirm the referee's report of sale and enter a deficiency judgment. Defendants argued that M&T's request for a deficiency judgment was untimely. The county court granted M&T's motion, determining that it was timely under the relevant ninety-day period because the consummation of the sale occurred on August 9, 2010 and was recorded on August 17, 2010. The appellate division reversed, concluding that the ninety-day period commenced in May 2010 upon the delivery of the referee's deed. The Court of Appeals reversed, holding that M&T's motion was timely because it was brought within ninety days after the date of the consummation of the sale by the delivery of the deed to the purchaser on August 9, 2010. View "M&T Real Estate Trust v. Doyle" on Justia Law

This case arose out of a challenge by a borrower, Respondent, to the authority of various individuals and entities to effectuate a valid foreclosure on her residential property. After a foreclosure sale was scheduled by the substitute foreclosure trustees, but before the sale took place, Respondent filed a separate action seeking compensatory damages and declaratory and injunctive relief against the substitute trustees, Deutsche Bank, and BAC Home Loans Servicing for alleged defects in the foreclosure process and the authority of Defendants to foreclose on her property. Deutsche Bank and BAC (Petitioners) filed a motion for summary judgment on Respondent's action, which the circuit court granted. The court of special appeals reversed, finding that Petitioners did not prove they were persons entitled to enforce the promissory note, and thus genuine issues of material fact precluded summary judgment. The Court of Appeals reversed, holding that BAC was entitled to enforce the note. Remanded. View "Deutsche Bank Nat'l Trust Co. v. Brock" on Justia Law

Meritor Bank failed in 1992 after the Federal Deposit Insurance Corporation (FDIC) breached a capital agreement with Meritor. The Federal Circuit affirmed that the government was liable for breach of contract, and awarding $276 million in “lost value” damages. On remand, the Claims Court applied 12 U.S.C. 1821(d)(11), the statute governing the distribution of a receivership surplus by the FDIC acting in its capacity as a receiver, and held that current Meritor shareholders are the proper recipients of the $276 million award. The court also denied a motion to intervene filed by McCarron, a former Meritor employee, on the grounds of lack of subject matter jurisdiction and issue and claim preclusion. Intervenors, former shareholders who owned shares of Meritor at the time of its failure but later sold their shares, appealed from an order directing the FDIC-Receiver to distribute the receivership surplus to current shareholders. McCarron appealed denial of his motion to intervene. The Federal Circuit affirmed. View "Slattery v. United States" on Justia Law

Anchor Mortgage Corporation and its CEO, Munson, were convicted under the False Claims Act, 31 U.S.C. 3729(a)(1), of making false statements when applying for federal guarantees of 11 loans. The district court imposed a penalty of $5,500 per loan, plus treble damages of about $2.7 million. The Seventh Circuit affirmed, rejecting an argument that defendants not have the necessary state of mind, either actual knowledge that material statements were false, or suspicion that they were false plus reckless disregard of their accuracy. The court noted that Anchor submitted bogus certificates that relatives had supplied the down payments that the borrowers purported to have made, when it knew that neither the borrowers nor any of their relatives had made down payments and represented that it had not paid anyone for referring clients to it, but in fact it paid at least one referrer. View "United States v. Munson" on Justia Law

Appellants lost their home in a foreclosure sale. When Appellants failed to vacate the home, Wells Fargo Bank, the foreclosure purchaser, sued for unlawful detainer. Appellants raised equitable defenses and counterclaims concerning the validity of Wells Fargo's title. Wells Fargo successfully moved to dismiss the defenses and counterclaims on the ground that they exceeded the statutory scope of issues that may be litigated in an unlawful detainer action under Mo. Rev. Stat. 534.210. The circuit court then granted summary judgment to Wells Fargo. Appellants appealed, arguing that section 534.210, which prohibits a defendant from raising equitable defenses and/or challenges to the validity of the plaintiff's title in an unlawful detainer action, was unconstitutional. The Supreme Court affirmed, holding (1) statutory limitations on the scope of unlawful detainer actions are not unconstitutional; and (2) Appellants failed to raise a genuine issue of fact concerning Wells Fargo's right to possession. View "Wells Fargo Bank, N.A. v. Smith" on Justia Law

Plaintiff bought a used pickup truck in 2011 for $28,000 and financed the purchase with a six-year installment contract at an interest rate of 23.9 percent. The dealer assigned the contract to AmeriCredit. After making the first installment the plaintiff sent AmeriCredit a copy of the installment contract that he had stamped “accepted for value and returned for value for settlement and closure,” and told AmeriCredit to collect the balance under the contract from the U.S. Treasury. AmeriCredit repossessed the truck, sold it, and billed the plaintiff $11,322.28 to cover the difference. The plaintiff sued AmeriCredit and its officers for $34 million in compensatory damages and $2.2 billion in punitive damages. The district judge could not make sense of the pro se complaint and dismissed it as frivolous. The Seventh Circuit vacated and remanded with directions that the judge either dismiss without prejudice or dismiss with prejudice, as a sanction; vacate the default judgment in favor of AmeriCredit on its counterclaim; and dismiss the counterclaim without prejudice. The court noted the earmarks of the “Sovereign Citizens” movement. View "Baba-Dainja El v. AmeriCredit Fin. Servs., Inc." on Justia Law

FHFA, the regulator and conservator of Freddie Mac and Fannie Mae (the Enterprises), issued a "directive" preventing the Enterprises from buying mortgages on properties encumbered by liens made under so-called property-assessed clean energy (PACE) programs. Plaintiffs contended that FHFA was acting as a regulator, and not a conservator. As a regulator, plaintiffs contended that FHFA must issue a regulation to effectuate its order. The court concluded that FHFA's decision to cease purchasing mortgages on PACE-encumbered properties was a lawful exercise of its statutory authority as conservator of the Enterprises. Because the courts have no jurisdiction to review such actions, the court vacated the district court's order and dismissed the case. View "County of Sonoma, et al v. FHFA, et al" on Justia Law

In 1999 the Sellers conveyed businesses to CT Acquisition Corp. The price was to be paid over time. The Sellers insisted on a surety bond (put up by Frontier Insurance) and personal guarantees by the principals of CT Acquisition. The Guarantors also promised to indemnify Frontier and promised to post collateral on Frontier’s demand. CT Acquisition did not pay, the Guarantors failed to keep their promise, and the Sellers turned to Frontier, which did not pay because it was in financial distress. Frontier demanded that the Guarantors post collateral. The district court read the agreement to require collateral only after Frontier’s obligation to the Sellers had been satisfied, or at least quantified. The suit was dismissed as unripe. Meanwhile the Sellers had sued Frontier and obtained judgment of $1.5 million. Frontier then filed another suit against the Guarantors. The district court concluded that, Frontier’s obligation having been quantified, the Guarantors must post collateral and, following remand, ordered the Guarantors to deposit with the Clerk $1,559,256.78, The Seventh Circuit affirmed, rejecting the Guarantors’ argument that they need not post collateral until Frontier has paid the Sellers. View "Frontier Ins. Co. v. Hitchcock" on Justia Law