Justia Banking Opinion Summaries

Sheneman and his son purchased distressed properties, then flipped the properties by operating an elaborate mortgage fraud scheme that convinced unwitting buyers to purchase properties they could neither afford nor rent out after purchasing. Mortgage lenders were duped into financing the purchases through misrepresentations about the buyers and their financial stability. Four buyers with few assets and no experience in the real estate market purchased 60 homes. Most of the homes were eventually foreclosed upon. The buyers and lenders each suffered significant losses. Sheneman was convicted of four counts of wire fraud, 18 U.S.C. 1343, and sentenced to 97 months' imprisonment. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence and to application of sentencing enhancements for use of sophisticated means and for losses of more than one million dollars. View "United States v. Sheneman" on Justia Law

In this purported class action on behalf of borrowers holding home mortgage loans serviced by Bayview, plaintiffs claimed that Bayview improperly added fees to borrowers' accounts in violation of the West Virginia Consumer Credit Protection Act, W. Va. Code 46A-1-101 through 46A-8-102. At issue was whether, under the statute of limitations, "the due date of the last scheduled payment of the agreement" was June 5, 2007, the loan acceleration date set by Bayview. The court concluded that the acceleration date was the operative date for purposes of applying the statute of limitations, because no further payments were scheduled after that date. Thus, the court affirmed the district court's judgment that the statute of limitations began to run from the acceleration date, and that, therefore, plaintiffs' claims were time barred. View "Delebreau v. Bayview Loan Servicing, LLC" on Justia Law

Debtors obtained a secured loan from an investment fund, for which the Bank served as trustee. Debtors ultimately became insolvent, seeking relief under 11 U.S.C. 1129(b)(2)(A), where debtors sought to confirm a "cramdown" bankruptcy plan over the Bank's objection. The Bankruptcy Court denied debtors' request, concluding that the auction procedures did not comply with section 1129(b)(2)(A)'s requirements for cramdown plans and the Seventh Circuit affirmed. The Court held that debtors could not obtain confirmation of a Chapter 11 cramdown plan that provided for the sale of collateral free and clear of the Bank's lien, but did not permit the Bank to credit-bid at the sale. Accordingly, the Court affirmed the judgment of the Court of Appeals. View "RadLAX Gateway Hotel, LLC v. Amalgamated Bank" on Justia Law

FNB South Dakota and its affiliates appealed from the district court's entry of a permanent injunction against them as a remedy for trademark infringement and unfair competition claims brought by FNB Sioux Falls. FNB Sioux Falls cross-appealed the denial of its motion for attorney's fees and the district court's purported factual finding that certain of FNB South Dakota's affiliates' names "appear" not to infringe FNB Sioux Falls' marks. The court held that, because the nucleus of operative facts in this action included facts not common to the prior action, this action was not barred by res judicata; the admission of the confusion log was harmless error; the district court's finding of a likelihood of confusion was based on a permissible view of the evidence and was therefore not clearly erroneous; and the district court's denial of fees must be affirmed. The court also declined to strike the challenged language from the district court's Amended Findings of Fact and Conclusions of Law. Accordingly, the court affirmed the judgment. View "The First National Bank v. First National Bank SD, et al." on Justia Law

Christa Albice and Karen Tecca (hereinafter Tecca) inherited the property at issue in this case. In 2003, Tecca borrowed $115,500 against the property. The loan was serviced by Option One Mortgage Corporation (Option One), and Premier Mortgage Services of Washington (Premier) acted as the trustee. In 2006, Tecca defaulted on the loan and received a notice of trustee's sale. In July 2006, Tecca negotiated and entered into a forbearance agreement to cure the default. The trustee's sale originally set for September 8, 2006 was continued six times. Each continuance was tied to the payments Tecca made under the Forbearance Agreement. The foreclosure sale finally took place on February 16, 2007. Through an agent, Petitioner Ron Dickinson, successfully bid on the property. Tecca first learned the property was sold when Dickinson told Tecca they no longer owned it and needed to leave. Dickinson then filed an unlawful detainer action and sought to quiet title. Tecca countersued, seeking to quiet title in an action to set aside the nonjudicial sale. Tecca also brought suit against Option One and Premier, but the trial court dismissed the action based on an arbitration clause. Dickinson moved for summary judgment to establish that he was a BFP and entitled to quiet title. Tecca also moved for summary judgment, arguing the foreclosure sale should have been set aside because the sale occurred after the statutory deadline and Premier was not a qualified trustee with authority to conduct the sale. The trial court granted Dickinson's motion, ruling that Dickinson was a BFP and despite procedural noncompliance by the trustee. Following trial, the court concluded Premier was authorized to act as the trustee, quieted title in Dickinson, and awarded Dickinson damages. Tecca appealed. The Court of Appeals reversed, setting the sale aside. The Supreme Court affirmed the Court of Appeals: the nonjudicial foreclosure proceedings were "marred" by repeated statutory noncompliance. The financial institution acting as the lender also appeared to be acting as the trustee under a different name; the lender repeatedly accepted late payments and, at its sole discretion, rejected only the final late payment that would have cured the default; and the trustee conducted a sale without statutory authority. The Court concluded the sale was invalid. View "Albice v. Premier Mortg. Servs. of Wash., Inc." on Justia Law

Carolyn Epperson filed a complaint against SOUTHBank in circuit court alleging that the bank had breached its contract with her by failing to give her the funds from certain certificates of deposit upon her request. The bank had denied Epperson's request because she did not present the original certificates. The trial court granted summary judgment for SOUTHBank, finding that contractual language required presentation of the original certificates for withdrawal. Epperson appealed the trial court's judgment, and the Supreme Court assigned the case to the Court of Appeals. The Court of Appeals reversed the trial court’s judgment and rendered judgment in favor of Epperson. SOUTHBank filed a petition for writ of certiorari, which the Supreme Court granted. Upon review, the Court found that the contractual language pertaining to withdrawals gave SOUTHBank discretion to require certain forms to be used for withdrawal, to refuse or restrict early withdrawals, and to assess penalties for early withdrawal. These terms were consistent and allowed SOUTHBank to require presentation of the original CD or CDs for withdrawal. The contract was unambiguous, and the trial court's grant of summary judgment was therefore appropriate. View "Epperson v. SouthBank" on Justia Law

This foreclosure action involved a dispute between two creditors, Wells Fargo Financial South Dakota, Inc. and Highmark Federal Credit Union about the priority of their respective mortgage liens against a property. Both parties asserted that they were entitled to first priority. The trial court found that, despite Highmark's statutory priority, under the doctrine of equitable subrogation, Wells Fargo was entitled to first priority. The Supreme Court reversed, holding (1) equity in this case did not require the trial court to pierce the South Dakota recording statutes; and (2) because Highmark filed its lien on the property prior to Wells Fargo, Highmark had priority. View "Highmark Fed. Credit Union v. Wells Fargo Fin. S.D., Inc." on Justia Law

This case presented the question of whether the doctrine of equitable subrogation may be used to reorder the priority of a mortgage lien where the mortgage holder had constructive but not actual knowledge of a pre-existing lien when it paid off an earlier mortgage as part of a refinancing deal and there was no fraud or other misconduct that would have prevented the discovery of the lien. The trial court applied the doctrine to reorder the priority of liens. The court of appeals reversed, finding that the doctrine did not apply under the facts of this case. The Supreme Court affirmed, holding that because equitable subrogation is not available to a lienholder who has actual or constructive knowledge of a preexisting lien, the court of appeals was correct in concluding that the remedy was not available to the mortgage holder. View "Mortgage Elec. Registration Sys., Inc. v. Roberts" on Justia Law

Between 2004 and 2008, Brown ran an elaborate scheme that tricked lenders into issuing fraudulent mortgage loans in Chicago and Las Vegas. Brown recruited or directed dozens of individuals: lawyers, accountants, loan officers, bank employees, realtors, home builders, and nominee buyers. Of his accomplices, 32 people were criminally charged. The Chicago scheme resulted in about 150 fraudulent loans, totaling more than $95 million in proceeds from victim lenders. The Las Vegas scheme resulted in approximately 33 fraudulent loans totaling about $16 million. Brown entered guilty pleas and was sentenced to 216 months’ imprisonment for the Las Vegas scheme and 240 months’ imprisonment for the Chicago scheme, to run concurrently. The district court also imposed a restitution amount of more than $32.2 million. The Seventh Circuit affirmed Brown’s sentence, rejecting a challenge to the loss calculation. The court remanded the 66-month sentence and $7.1 restitution order against another participant in the Chicago scheme because the court incorrectly determined the number of victims. View "United States v. Love" on Justia Law

In this derivative action, the parties sought judicial approval of a settlement. Defendants agreed to pay the Fund, on whose behalf the derivative claims were brought, and agreed not to pursue claims for indemnification against the Fund. Certain limited partners in the Fund, including the named plaintiffs, objected to the settlement consideration as inadequate. The court held that the settlement consideration fell within a range of fairness, albeit at the low end. Because the consideration fell within the range of fairness, the court will approve the settlement unless the objectors make the equivalent of a topping bid. View "Forsythe, et al. v. ESC Fund Management Co. (U.S.), Inc., et al." on Justia Law