Justia Banking Opinion Summaries

Ginnie Mae (GM), established by 12 U.S.C. 1717(a)(2)(A) to provide stability in the secondary residential mortgage market and promote access to mortgage credit, guarantees mortgage-backed securities (MBS). FMC, a private corporation, was an originator and servicer of government-guaranteed home mortgages and an issuer of MBS in GM’s program. GM learned of FMC actions that constituted the immediate default of the Guaranty Agreements. FMC undertook an investigation and provided the results to GM, while also complying with SEC requests. GM later terminated FMC from its program. The SEC initiated a civil enforcement action, which terminated in a consent agreement, without FMC admitting or denying the allegations but paying disgorgement and penalties. The Consent Agreement provided that it did not affect FMC’s right to take positions in proceedings in which the SEC is not a party but FMC agreed to not take any action or permit any public statement denying any allegation in the SEC complaint FMC later sued, alleging that GM had breached Guaranty Agreements when it terminated FMC from its program and denied violating those Agreements.The Federal Circuit affirmed the Claims Court’s dismissal. FMC’s breach of contract claims are precluded under the doctrine of res judicata. FMC’s action is essentially a collateral attack on the judgment entered in the SEC action. The SEC and GM are in privity for the purposes of precluding FMC’s claims and “successful prosecution of the second action would nullify the initial judgment or would impair rights established in the initial action.” View "First Mortgage Corp. v. United States" on Justia Law

The Supreme Court affirmed the judgment of the circuit court concluding that Regions Bank and Optimum Agriculture, LLC had lien priority to crop proceeds and that Optimum Agriculture, LLC was entitled to a statutory landlord lien, holding that the circuit court did not clearly err.On appeal, AgriFund, LLC, one of the three creditors in this intercreditor dispute over lien priority to the crop proceeds, argued that its lien was superior to those held by Regions and Optimum. The Supreme Court disagreed and affirmed, holding that, under the facts and circumstances of this case, the circuit court did not clearly err in finding that AgriFund did not have priority to the proceeds and that Optimum held a landlord's lien. View "Agrifund, LLC v. Regions Bank" on Justia Law

In this foreclosure action, the Supreme Judicial Court vacated the judgment of the district court entered in favor of Duane Beedle, holding that the court erred in concluding that U.S. Bank, N.A. did not prove that it owned the mortgage and therefore did not have standing to file a foreclosure action.In 2003, Beedle executed a note and mortgage in favor of Fleet National Bank for the purchase of certain property. In 2012, the mortgage was assigned to U.S. Bank, as trustee for Assignee #1. In 2016, Beedle was sent a notice of default. Beedle declared the entire principal amount outstanding. In 2017, a second assignment was executed, by which U.S. Bank claimed that Assignee #1 assigned its interest in the mortgage to U.S. Bank. U.S. Bank subsequently commenced this foreclosure action. The district court entered judgment for the Beedles, concluding that U.S. Bank failed to prove ownership of the mortgage due to a "faulty" 2012 assignment. The Supreme Court vacated the judgment, holding that the 2012 assignment of the mortgage was enforceable. View "U.S. Bank, N.A. v. Beedle" on Justia Law

TD Bank, National Association and TD Bank US Holding Company (collectively, "TD Bank") petitioned the Alabama Supreme Court for a writ of mandamus to direct the circuit court to dismiss claims filed against them by Bolaji Kukoyi and Dynamic Civil Solutions, Inc., on the basis of a lack of personal jurisdiction. In January 2017, Kukoyi retained Jessyca McKnight, a real-estate agent and broker employed with A Prime Location, Inc., d/b/a A Prime Real Estate Location ("Prime"), to assist him in purchasing a house. Kukoyi made an offer on a house, the offer was accepted, and the closing was scheduled to take place at attorney David Condon's office in Birmingham. Before the closing date, McKnight and Prime received an e-mail purportedly from Condon's paralegal instructing Kukoyi to wire funds for the closing costs one week before the closing date to an account at a TD Bank location in Florida. According to Kukoyi, he questioned the instructions but was assured by McKnight and Prime that wiring the funds was necessary for the closing to go forward. Kukoyi initiated a wire transfer in the amount of $125,652.74 from an account he owned jointly with Dynamic Civil Solutions with ServisFirst Bank ("ServisFirst") to the account at TD Bank as instructed in the e-mail McKnight and Prime had forwarded to Kukoyi. Unbeknownst to plaintiffs, the account to which Kukoyi wired the funds had been opened by a company known as Ozoria Global, Inc. ServisFirst discovered that the wire transfer was fraudulent and had not been completely processed. Kukoyi requested that ServisFirst put a stop-payment on the wire transfer, and ServisFirst advised TD Bank that the transfer had been fraudulent and requested that TD Bank reverse the transfer. In late 2017, plaintiffs sued, asserting various causes of action against TD Bank and other defendants in relation to the wire transfer. By March 2019, TD Bank filed a motion to dismiss the claims against it based on a lack of personal jurisdiction. The Alabama Supreme Court determined TD Bank demonstrated that it had a clear legal right to mandamus relief, and granted the writ. The trial court was directed to grant TD Bank's motion to dismiss. View "Ex parte TD Bank US Holding Company" on Justia Law

In a prior dispute between plaintiff and her lender, Feddie Mac, the Fifth Circuit certified to the Supreme Court of Texas the following question: "Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under section 50 of the Texas Constitution?" The Texas Supreme Court answered in the affirmative. In light of the Texas Supreme Court's answer, the court reversed the district court's holding to the contrary and remanded for further proceedings. View "Zepeda v. Federal Home Loan Mortgage Corp." on Justia Law

The Supreme Judicial Court affirmed the judgment of a single justice of the court denying Petitioner's complaint for relief in the nature of mandamus and for extraordinary relief under Mass. Gen. Laws ch. 211, 3, holding that the single justice did not err or abuse her discretion in denying relief.On March 31, 2017, judgment entered against Petitioner in the underlying superior court case. Petitioner filed a motion to vacate the judgment. After the motion to vacate was denied Petitioner filed a motion for reconsideration and a motion to recuse. Both motions were denied. Petitioner then filed her complaint for relief in the nature of mandamus and for extraordinary relief pursuant to Mass. Gen. Laws ch. 211, 3. The single justice denied relief. The Supreme Judicial Court affirmed, holding that where Petitioner had an adequate alternative avenue to obtain the relief sought - an appeal to the Appeals Court - and chose not to pursue that avenue, Petitioner was not entitled to invoke the extraordinary relief set forth in Mass. Gen. Laws ch. 211, 3. View "Harrington v. Deutsche Bank National Trust Co." on Justia Law

The owner of the unencumbered 25 percent interest in the real property is entitled to a proportionate share of surplus proceeds. The Court of Appeal's conclusion is based on Caito v. United California Bank (1978) 20 Cal.3d 694. The court held that the 1990 enactment of Civil Code section 2924k did not change the principles set forth in Caito.Applying this principle about the rights of junior lienors to the undisputed facts of this case, the court held that the creditor holding the second deed of trust encumbering an undivided 75 percent interest in the real property was entitled only to a 75 percent share of the surplus funds. The court held that the remaining 25 percent must be distributed to the person who owned the interest that was not encumbered by the second deed of trust. Accordingly, the court reversed the trial court's judgment. View "Zieve, Brodnax & Steele, LLP v. Dhindsa" on Justia Law

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

Freelance bookkeeper Elizabeth Mulder perpetrated a nearly five-year fraud against her client, plaintiff Kurtz-Ahlers. Both Kurtz-Ahlers and Mulder coincidentally had their checking accounts at defendant Bank of America (the Bank). Mulder ran her scam through her account at the Bank. After discovering the fraud, Kurtz-Ahlers notified the Bank and made a claim for its losses. The Bank denied the claim and Kurtz-Ahlers sued the Bank for negligence. After a two-week jury trial, the trial court granted the Bank’s motion for nonsuit, essentially holding the Bank owed Kurtz-Ahlers no duty to investigate or monitor Mulder’s account. Finding no reversible error in that conclusion, the Court of Appeal affirmed. View "Kurtz-Ahlers, LLC v. Bank of America N.A." on Justia Law

Brad Dupree sued PeoplesSouth Bank ("PeoplesSouth"), alleging that PeoplesSouth wrongfully gave the proceeds of a $100,000 certificate of deposit to his father, not him. Jimmy Dupree was Brad's father. In 1993, Jimmy opened the CD at issue here; it was issued in both Brad's and Jimmie's names. Handwritten edits on the CD later reversed the order of the names to "Jimmy Dupree and Brad Dupree" and also replaced Brad's taxpayer ID number with Jimmy's taxpayer ID number. A handwritten note, dated December 1993 on the back of the CD stated "changed order of names to report interest under Jimmy's SS#." No evidence was offered as to who made the handwritten changes, and they were not initialed by either Jimmy or Brad. Brad was a minor at the time the CD was issued and did not contribute any money to the purchase of the CD. In November 2010, before filing this case, Brad, his mother, and his stepbrother sued Jimmy alleging Jimmy had wrongfully converted certain personal property, including the CD. In 2012, while the 2010 action was pending, Jimmy cashed the CD without notifying Brad. PeoplesSouth issued a cashier's check payable to the order of "Jimmy Dupree or Brad Dupree" for the amount of the CD less amounts set off by PeoplesSouth related to Jimmy's business loan. Jimmy cashed the check and then spent the funds. Brad learned during mediation of the 2010 action that Jimmy had cashed in the CD and was advised by the mediator to sue PeoplesSouth. The circuit court entered judgment in favor of the bank. Brad appealed, arguing he should have won on his breach-of-contract claim and awarded $100,000 in damages. The Alabama Supreme Court determined that without any rights in the CD by virtue of an inter vivos gift, Brad could not show he was damaged by PeoplesSouth's alleged nonperformance, and he was therefore unable to prevail on his breach-of-contract claim. Judgment in favor of the bank was affirmed. View "Brad Dupree v. PeoplesSouth Bank" on Justia Law