Justia Banking Opinion Summaries

Dennis fell behind on his debt to Washington Mutual Bank. LVNV bought the debt and Niagara Credit sent a form collection letter on LVNV’s behalf, stating: “Your account was placed with our collection agency” and that Niagara’s “client” had authorized it to offer a payment plan or a settlement of the debt in full. The letter identifies Washington Mutual as the “original creditor” and LVNV as the “current creditor.” It lists the principal and interest balances of the debt and the last four digits of the account number. Dennis filed a putative class action complaint, claiming violation of the Fair Debt Collection Practices Act by “fail[ing] to identify clearly and effectively the name of the creditor to whom the debt was owed,” 15 U.S.C. 1692g(a)(2). The Seventh Circuit affirmed the rejection of the suit on the pleadings, rejecting an argument that listing two entities as “creditor” then stating that Niagara was authorized to make settlement offers on behalf of an unknown client could likely confuse consumers. The defendants’ letter expressly identifies LVNV as the current creditor and meets the Act’s requirement of a written notice containing “the name of the creditor to whom the debt is owed.” An unsophisticated consumer will understand that his debt has been purchased by the current creditor; the letter is not abusive or unfair. Section 1692(g)(a)(2) does not require a detailed explanation of the transactions leading to the debt collector’s notice. View "Dennis v. Niagara Credit Solutions, Inc." on Justia Law

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

If the principal secured by a mortgage or deed of trust becomes due because of the borrower’s default in making payments Civil Code 2924c allows the borrower to reinstate the loan and avoid foreclosure by paying the amount in default, plus specified fees and expenses. Under section 2953, the right of reinstatement cannot be waived in any agreement “at the time of or in connection with the making of or renewing of any loan secured by a deed of trust, mortgage or other instrument creating a lien on real property.” The borrowers missed four monthly payments on a mortgage loan that had been modified after an earlier default. The modification deferred amounts due on the original loan and provided that any default would allow the lender to void the modification and enforce the original loan. The borrowers sought to reinstate the modified loan by paying the four missed payments, plus fees and expenses. The lender argued that section 2953 does not apply to the modified loan and that the borrowers may reinstate the original loan by paying the amount of the earlier default on the original loan plus the missed modified payments.The court of appeal ruled in favor of the borrowers. Modification is appropriately viewed as the making or renewal of a loan secured by a deed of trust and is subject to the anti-waiver provisions. Section 2924c gives the borrows the opportunity to cure their precipitating default (the missed modified monthly payments) by making up those missed payments and paying the associated late charges and fees, to avoid the consequences of default on the modified loan. View "Taniguchi v. Restoration Homes LLC" on Justia Law

Appellants Jerry and JoCarol Losee appeal the district court’s decision granting Deutsche Bank National Trust Company’s motion for summary judgment, arguing the district court erred by refusing to consider their “Chain of Title Analysis” as inadmissible hearsay. The Losees also argue the district court erred in failing to rule on two of their claims against Deutsche Bank. In 2009, the Losees became delinquent in their mortgage payments, eventually defaulting on their home mortgage loan. Over two years after the foreclosure sale was supposed to take place, a second notice of default was recorded on April 20, 2014. However, the foreclosure sale was postponed when the Losees requested a loss mitigation review. The owner of the loan would not allow loan modification, so the Losees were advised that a short sale of the property was the only loss mitigation available. On August 17, 2015, this case commenced when the Losees, acting pro se, filed their “Original Petition for Breach of Contract, Slander of Title for Declaratory Judgment and Motion for Temporary Restraining Order and Application for Temporary Injunction” (“Complaint”) with the district court. In 2017, the Losees submitted a “Notice of Filing for Judicial Review,” to which they attached a “Chain of Title Analysis.” The “Chain of Title Analysis” was a report resulting from a mortgage fraud investigation conducted by a private investigation company they hired. The district court granted the Bank's motion for summary judgment, concluding there was no breach of the Deed of Trust, title to the property had not been slandered or become clouded by assignment, and that the Chain of Title Analysis was inadmissible hearsay not appropriate for consideration by the court on summary judgment. The Idaho Supreme Court found no reversible error in the district court's grant of summary judgment and affirmed. View "Losee v. Deutsche Bank Nat'l Trust" on Justia Law

Around 2009, Saccameno defaulted on her mortgage. U.S. Bank began foreclosure proceedings. She began a Chapter 13 bankruptcy plan under which she was to cure her default over 42 months while maintaining her monthly mortgage payments, 11 U.S.C. 1322(b)(5). In 2011, Ocwen acquired her previous servicer. Ocwen, inexplicably, informed her that she owed $16,000 immediately. Saccameno continued making payments based on her plan. Her statements continued to fluctuate. In 2013, the bankruptcy court issued a notice that Saccameno had completed her payments. Ocwen never responded; the court entered a discharge order. Within days an Ocwen employee mistakenly treated the discharge as a dismissal and reactivated the foreclosure. For about twp years, Saccameno and her attorney faxed her documents many times and spoke to many Ocwen employees. The foreclosure protocol remained open. Ocewen eventually began rejecting her payments. Saccameno sued, citing breach of contract; the Fair Debt Collection Practices Act; the Real Estate Settlement Procedures Act; and the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFDBPA), citing consent decrees that Ocwen previously had entered with regulatory bodies, concerning inadequate recordkeeping, misapplication of payments, and poor customer service. The jury awarded $500,000 for the breach of contract, FDCPA, and RESPA claims, plus, under ICFDBPA, $12,000 in economic, $70,000 in non-economic, and $3,000,000 in punitive damages. The Seventh Circuit remanded. While the jury was within its rights to punish Ocwen, the amount of the award is excessive. View "Saccameno v. U.S. Bank National Association" on Justia Law

The Supreme Court affirmed the judgment of the circuit court adopting the partial subordination rule to construe the subordination agreement in this case, determining that the agreement was not ambiguous and dismissing Futuri Real Estate Inc.'s cross-claim with prejudice, holding that Futuri's assignments of error were without merit.Landowners owned real property encumbered by three separate lines of credit. A subordination agreement was recorded providing that Walls Fargo Bank agreed to subordinate the lien of the original security instrument to the lien of the subsequent security instrument. The property later went into foreclosure, and the trustee sold the property to Futuri. A dispute then arose between Futuri and Wells Fargo concerning the disbursal of the surplus fund. Futuri filed a cross-claim against Wells Fargo seeking a declaratory judgment that the subordination agreement ousted the Wells Fargo lien from its first priority position. The circuit court concluded that the agreement was a partial subordination agreement and dismissed Futuri's claim. The Supreme Court affirmed, holding that the circuit court did not err in (1) not adopting the complete subordination rule of construction, and (2) finding that the agreement was not ambiguous. View "Futuri Real Estate, Inc. v. Atlantic Trustee Services, LLC" on Justia Law

In these appeals stemming from two residential mortgage-back securities (RMBS) transactions the Court of Appeals affirmed the order of the Appellate Division reversing the judgment of Supreme Court and granting Defendants' motions to dismiss the complaints alleging breaches of representations and warranties made in underlying mortgage loans, holding that Plaintiff's causes of action accrued in California, and Plaintiff's actions were untimely pursuant to N.Y. C.P.L.R. 202.Defendants moved to dismiss Plaintiff's actions, contending that pursuant to section 202 Plaintiff's causes of action accrued in California and were therefore untimely. Plaintiff conceded that it was a resident of California but argued that the court should apply a multi-factor analysis to determine where the cause of action accrued. Supreme Court denied Defendants' motions to dismiss, noting that the parties had chosen New York substantive law to govern their rights. The Appellate Division reversed. The Court of Appeals affirmed, holding (1) this Court declines to apply the multi-factor test urged by Plaintiff and instead relies on the general rule that when an economic injury has occurred the place of injury is usually where the plaintiff residents; and (2) where Plaintiff is a resident of California, to satisfy section 202 Plaintiff's actions must be timely under California's statute of limitations. View "Deutsche Bank National Trust Co. v. Barclays Bank PLC" on Justia Law

Patricia Devine sued to invalidate a foreclosure sale that divested her interest in a property located in Elberta, Alabama. The trial court explained that the foreclosure was lawful and that Devine's lawsuit was, in any event, barred by the statute of limitations and precluded by the doctrine of res judicata. Devine insisted on appeal that the foreclosure was illegal and therefore void, but the Alabama Supreme Court found she failed to address the trial court's application of the statute of limitations and the doctrine of res judicata. The trial court was therefore affirmed. View "Devine v. Bank of New York Mellon Company" on Justia Law

In this writ of error the Supreme Court held that state courts lack jurisdiction to extend the automatic stay provision of the federal bankruptcy code, 11 U.S.C. 362(a)(1), to motions proceedings against nondebtor plaintiffs in foreclosure actions and overruled Equity One, Inc. v. Shivers, 93 A.3d 1167 (Conn. 2014), on that ground. U.S. Bank National Association brought a foreclosure action against Jacquelyn Crawford. The trial court ordered a foreclosure by sale and appointed Douglas Evans as the committee for sale. Before the sale could be completed Crawford declared bankruptcy and the foreclosure action was stayed. Evans then filed a motion seeking to recover from the bank fees and expenses he incurred in preparing for the sale. Relying exclusively on Shivers, which ruled that courts have authority to extend the application for the automatic stay to nondebtors in unusual circumstances, the trial court concluded that Evans's motion for fees and expenses was stayed. Evans then filed this writ of error. The Supreme Court granted the writ, holding (1) state courts do not have jurisdiction to change the status quo by modifying the reach of the automatic stay provision; and (2) Shivers must be overruled. View "U.S. Bank National Ass'n v. Crawford" on Justia Law

The Second Circuit vacated the district court's judgment granting Wells Fargo's motion to dismiss. Relators alleged that the district court erred in concluding that fraudulent loan requests knowingly presented to one or more of the Federal Reserve System's twelve Federal Reserve Banks (FRBs) are not "claims" within the meaning of the False Claims Act (FCA), and thus do not give rise to FCA liability.The court held that the FCA's definition of a "claim" is capacious. The court explained that, although FRB personnel are not officers or employees of the United States, the FRBs administered the Federal Reserve System's emergency lending facilities on behalf of the United States, using authority delegated by Congress and money provided by the Board of Governors of the Federal Reserve System. Therefore, the court concluded that the FRBs are agents of the United States within the meaning of 31 U.S.C. 3729(b)(2)(A)(i). The court also held that the money requested by defendants and other Fed borrowers is provided by the United States to advance a Government program or interest within the meaning of section 3729(b)(2)(A)(ii). View "United States v. Wells Fargo" on Justia Law