Justia Banking Opinion Summaries

JPMorgan Chase Bank, N.A. filed a complaint against Terrance Lowell seeking foreclosure on residential property. The complaint alleged that Lowell had defaulted by failing to make payments due on a promissory note. After a bench trial, the district court entered a judgment of foreclosure in favor of JPMorgan. The Supreme Judicial Court vacated the judgment, holding (1) the district court properly admitted certain documents pursuant to the business records exception to the hearsay rule; but (2) the district court erred by finding that the notice of default issued by JPMorgan complied with the requirement established in Me. Rev. Stat. 14, 6111(1-A)(C), which is a required element of foreclosure. Remanded for entry of judgment in favor of Lowell. View "JPMorgan Chase Bank, N.A. v. Lowell" on Justia Law

Shayne Crapo defaulted on a $250,000 loan from Zions First National Bank. After the expiration of a three-year period with no payments being made on the loan, Zions Bank issued Mr. Crapo a Form 1099-C - a reporting tool designed to help the IRS track lenders’ debt forgiveness. Crapo claimed that he reported the $250,000 as income on his tax return, thus increasing his tax burden for that year. After Zions Bank brought a deficiency action to recover the amount due on the loan, Crapo argued that the Form 1099-C was prima facie evidence that Zions Bank discharged the debt and that Zions Bank was estopped from collecting the debt. The district court rejected Crapo’s arguments and granted summary judgment in favor of Zions Bank. The Supreme Court affirmed, holding that Crapo failed to show that there was a genuine dispute of material fact as to either actual discharge or estoppel. View "Crapo v. Zions First National Bank" on Justia Law

At issue in this case was a non-judicial foreclosure conducted pursuant to Haw. Rev. Stat. Chapter 667 Part I, which was repealed by the legislature by Act 182. Russell Hungate, the property owner, filed a complaint and first amended complaint alleging that Deutsche Bank National Trust Company (Deutsche Bank) and David B. Rosen and his law office (collectively, Rosen), the attorney hired by Deutsche Bank to conduct the foreclosure of Hungate’s property, violated statutory, contractual, and common law duties and committed unfair or deceptive acts or practices. The circuit court granted Rosen’s motion to dismiss and then granted Deutsche Bank’s motion to dismiss. The Supreme Court vacated in part the circuit court’s orders, holding (1) the circuit court erred in dismissing the majority to Hungate’s claims alleging Haw. Rev. Stat. Chapter 667 Part I violations against Deutsche Bank; (2) Duetsche Bank must use reasonable means to obtain the best price for a foreclosed property; and (3) the circuit court erred in dismissing Hungate’s unfair or deceptive acts or practices claim against Deutsche Bank, but property dismissed Hungate’s claim against Rosen. View "Hungate v. Rosen" on Justia Law

Homeowners obtained loans from Bank for the construction of a new home and entered into an agreement with Contractor to complete the new home construction. When Homeowners defaulted on payments owed to Contractor and on both loans, the house was sold at foreclosure, and Homeowners filed for bankruptcy. Contractor filed a fourth amended complaint against Homeowners, who were later dismissed as parties, and Bank. Following a trial the court granted summary judgment for Bank on Contractor’s claims of fraud and civil conspiracy. The Supreme Court reversed. After remand, Contractor filed a fifth amended complaint, which differed from the fourth amended complaint in several respects. The district court determined that the election of remedies doctrine and judicial estoppel required a dismissal of Contractor’s claims. The Supreme Court reversed, holding (1) Contractor’s claims were consistently premised on the existence of a contract, and therefore, no election was required; and (2) Contractor’s claims were based on different facts and obligations, and therefore, both could be pursued. View "deNourie & Yost Homes, LLC v. Frost" on Justia Law

In 2009, the SEC initiated the Nadel action following the collapse of a Ponzi scheme perpetrated by Arthur Nadel. In 2010, the district court entered an order establishing a claims administration process by which potential claimants could file proof of their claims against the receivership. Wells Fargo submitted a Proof of Claim as to its loan that secured one receivership property within the set claim bar date, but did not submit a Proof of Claim detailing its secured interest in the other two receivership properties. In 2012, Wells Fargo submitted a motion seeking a determination that the filing of Proofs of Claim was unnecessary to preserve its security interests in, and claims against, collateral in the Receiver's possession. In the alternative, Wells Fargo sought leave to file belated claims. The district court granted the Receiver's motion seeking a determination that Wells Fargo's failure to submit Proofs of Claim for the loans secured by two properties extinguished its interests in those properties, and the release of the proceeds from the sale of one of the properties for which Wells Fargo did not file a Proof of Claim. Determining that Wells Fargo's appeal was timely, the court concluded that the district court erred when it terminated Wells Fargo's security interest in the properties at issue. The court found bankruptcy law was both analogous and instructive here. The court reasoned that, in the bankruptcy context, a secured creditor’s lien remains intact through the bankruptcy, regardless of whether the creditor files a proof of claim. In this case, the court concluded that Wells Fargo's security interests remained intact as to the two properties for which it did not file a Proof of Claim in the district court. Accordingly, the court reversed and remanded. View "SEC v. Wells Fargo Bank, N.A." on Justia Law

Under the Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654, the Federal Housing Finance Agency (FHFA) became the conservator of Fannie Mae and Freddie Mac. In 2012, FHFA and Treasury adopted the Third Amendment to their stock purchase agreement, which replaced the fixed 10% dividend with a formula by which Fannie and Freddie just paid to Treasury an amount (roughly) equal to their quarterly net worth. Plaintiffs, Fannie Mae and Freddie Mac stockholders, filed suit alleging that FHFA's and Treasury's alteration of the dividend formula through the Third Amendment exceeded their statutory authority under the Recovery Act, and constituted arbitrary and capricious agency action in violation of the Administrative Procedure Act (APA), 5 U.S.C. 706(2)(A). The court held that plaintiffs' statutory claims are barred by the Recovery Act's strict limitation on judicial review; the court rejected most of plaintiffs' common law claims; insofar as the court has subject matter jurisdiction over plaintiffs' common-law claims against Treasury, and Congress has waived the agency's immunity from suit, those claims are also barred by the Recovery Act's limitation on judicial review; in regard to claims against FHFA and the Companies, some are barred because FHFA succeeded to all rights, powers, and privileges of the stockholders under the Recovery Act, and others failed to state a claim upon which relief could be granted; and, as to the remaining claims, which are contract-based claims regarding liquidation preferences and dividend rights, the court remanded for further proceedings. View "Perry Capital LLC v. Mnuchin" on Justia Law

In consolidated cases, the debtors obtained Federal Housing Administration-insured residential mortgage loans and subsequently defaulted due to financial hardship. The law firms represented the loan servicing agents in filing Illinois foreclosure complaints, using the statutory complaint template (Illinois’ Mortgage Foreclosure Law, 735 Ill. Comp. Stat. 5/15-1504(a)), which includes the language: “Names of defendants claimed to be personally liable for deficiency, if any[,]” and, “[a] personal judgment for a deficiency, if sought.” The firms included both allegations, and identified debtors to be personally liable for any deficiency. The debtors filed suit under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, alleging that the FHA does not authorize deficiency judgments where borrowers suffered a financial hardship. They submitted a letter from the FHA responding to a Freedom of Information Act request, stating: There have been zero foreclosed FHA loans in Illinois in which the pursuit of a deficiency judgment was authorized. FHA is not currently pursuing deficiency judgments.” The district court dismissed. The Seventh Circuit affirmed. Debtors did not identify any law, regulation, or FHA policy requiring a mortgagee to obtain authorization from the FHA prior to including the two allegations at issue in their state-foreclosure complaint. View "Zuniga v. Pierce & Associates" on Justia Law

Twelve individuals in the Houston area who receive Section 8 housing assistance filed suit against AmeriPro and Wells Fargo, alleging discrimination in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq., on the basis of their receipt of public assistance income. The district court granted defendants' Rule 12(b)(6) motion and dismissed the claims. The court concluded that the Wells Fargo Applicants did not plausibly allege that Wells Fargo discriminated against them on the basis of their Section 8 income or failed to consider their Section 8 income in assessing their creditworthiness; the AmeriPro Inquirers did not plausibly allege that they are "applicants" under the ECOA because they did not actually apply for credit with AmeriPro; and the AmeriPro Applicants did not plausibly allege that Wells Fargo was a "creditor" with respect to them. Therefore, the court affirmed as to these claims. The court concluded that the AmeriPro Applicants did plausibly allege violations of the ECOA by alleging that AmeriPro refused to consider their Section 8 income in assessing their creditworthiness as mortgage applicants, and that they received mortgages on less favorable terms and in lesser amounts than they would have had their Section 8 income been considered. Accordingly, the court reversed as to these claims and remanded for further proceedings. View "Alexander v. Ameripro Funding" on Justia Law

This case stems from the simultaneous refinancing of a home equity line of credit by two different lenders in 2006, which resulted in a dispute over the priority of their recorded deeds of trust. On appeal, Bank of New York Melon challenged the dismissal of its suit against Citibank. The court reversed the judgment sustaining Citibank's demurrers to Bank of New York Melon's first and second amended complaints, that alleged all of Bank of New York Melon's causes of action were barred by the three-year statute of limitations in Code of Civil Procedure section 338. The court concluded, however, that Bank of New York Melon has stated a claim for equitable subrogation, which is not subject to the statute. The court considered all other theories in the first and second amended complaint to be variations of that cause of action, rather than independent causes of action, as they assert no independent right for which relief may be granted under California law. The court explained that the claim for equitable subrogation is not subject to the statute and is not time-barred. Therefore, the court reversed and remanded. View "Bank of New York Mellon v. Citibank" on Justia Law

Plaintiffs challenged the dismissal of their pro se complaint that, inter alia, sought a declaration that Chase and U.S. Bank could not foreclose on their home. The district court dismissed certain counts based on lack of subject matter jurisdiction under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), 12 U.S.C. 1821, and other counts for failure to state a claim. The court affirmed, concluding that the district court lacked subject matter jurisdiction over most of the counts (Counts 1, 2, 5-9, and 16-19) that plaintiffs appeal because they failed to exhaust their claims with the FDIC. The court further concluded that the other relevant counts for constructive fraud (Count 14) and negligence (Count 15) failed to state a claim. Finally, the district court did not abuse its discretion by not providing a reason for denying plaintiffs' requests to amend their complaint. View "Willner v. Dimon" on Justia Law