Justia Banking Opinion Summaries

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

The Supreme Court reversed the judgment of the court of appeals vacating the trial court's decision ordering Defendant, who pleaded guilty to cashing seven forged checks at branches of three different banks, to pay restitution to the banks in the amount of the forged checks, holding that a bank that cashes a forged check and then recredits the depositor's account is a victim to which the forger can be required to pay restitution.In reversing the trial court's judgment, the court of appeals determined that the banks were not "victims" for purposes of Ohio Rev. Code 2929.18, the statute authorizing a trial court to order an offender to pay restitution to a "victim" who suffers an economic loss, but were instead third parties who had reimbursed the account holders, who were the true victims. The Supreme Court reversed, holding that the banks were victims of Defendant's fraud that suffered an economic loss thereby, and therefore, the trial court properly ordered Defendant to pay restitution to the banks under section 2929.18. View "State v. Allen" on Justia Law

First Bank of Lincoln (First Bank) challenged a district court’s grant of summary judgment in favor of Land Title of Nez Perce County Incorporated (Land Title). In 2011, First Bank loaned Donald Tuschoff $440,000 to purchase the Hotel Lincoln in Lincoln, Montana. The loan was secured by a deed of trust against the hotel. As additional collateral, Tuschoff assigned First Bank his interest in a note and deed of trust on a bowling alley in Washington. Later, following a sale of the bowling alley, Land Title distributed the proceeds to Tuschoff and other interested parties rather than First Bank. First Bank did not learn of the bowling alley sale until it completed its annual loan review of Tuschoff’s hotel loan. Subsequently, Tuschoff defaulted on the hotel loan. First Bank held a non-judicial foreclosure sale of the hotel and placed a full-credit bid of the approximately $425,000 owed to it by Tuschoff. First Bank was able to later sell the hotel for approximately $190,000. First Bank then initiated several lawsuits against various parties in Washington, Montana, and Idaho, seeking to recover the “deficiency” between what it was owed and for what it sold the hotel. Relevant here was First Bank’s suit against Land Title in Idaho. The district court, applying Montana law, granted summary judgment in favor of Land Title. The court determined that First Bank’s full credit bid extinguished Tuschoff’s debt, and once that debt was extinguished, the assignment of Tuschoff’s interest in the bowling alley as collateral for that debt was also extinguished. The Idaho Supreme Court concurred with this conclusion, and affirmed. View "First Bank of Lincoln v. Land Title of Nez Perce County" on Justia Law