Justia Banking Opinion Summaries

Under Regulation X, 12 C.F. R. part 1024, which implements the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq., a loan servicer’s duty to evaluate a borrower’s loss mitigation application is triggered only when the borrower submits the application more than 37 days before the foreclosure sale. At issue is whether Ocwen, a loan servicer, had a duty to evaluate an application for loss mitigation options submitted by the Borrowers when, at the time the application was submitted, a foreclosure sale of the Borrowers’ property was scheduled to occur in two days. The court concluded that Regulation X requires the court to measure the timeliness of the Borrowers’ application using the date the foreclosure sale was scheduled to occur when they submitted their complete application. Because the Borrowers’ application was untimely, the court agreed with the district court that Ocwen had no duty to evaluate the Borrowers’ loss mitigation application. Therefore, the court affirmed the district court’s grant of summary judgment to Ocwen on the Borrowers’ claim seeking to hold Ocwen liable for failing to evaluate their loss mitigation application. The court also affirmed the district court’s grant of summary judgment with respect to the Borrowers’ claim based on Ocwen’s inadequate response to their notice of error. The court agreed with the district court that to survive summary judgment the Borrowers had to present evidence that they suffered actual damages or were entitled to statutory damages and that they failed to do so. View "Lage v. Ocwen Loan Servicing LLC" on Justia Law

New York law required CitiMortgage to file within 30 days a certificate of discharge with the county clerk to record that plaintiff had satisfied his mortgage. N.Y. Real Prop. Law 275; N.Y. Real Prop. Acts. Law 1921. When CitiMortgage failed to record the satisfaction of the mortgage until more than 90 days after the date of satisfaction, plaintiff filed a putative class action against CitiMortgage. The district court dismissed plaintiff's complaint. The court agreed with CitiMortgage that plaintiff lacks standing to maintain this action. The court dismissed the appeal for lack of jurisdiction because plaintiff has not alleged that CitiMortgage's violation of New York law caused or could cause him any harm. View "Nicklaw v. CitiMortgage, Inc." on Justia Law

In 2007, the Diedrichs executed a mortgage note. Ocwen began foreclosure proceedings in 2010. The Diedrichs entered into a loan modification agreement in 2011. After the Diedrichs began making payments pursuant to that agreement, they became concerned about whether their escrow account was being correctly administered and whether they were being charged improper fees. On February 22, 2013, the Diedrichs sent Ocwen a letter, requesting standard information about their account including the names of employees working on their account, the history of payments from their escrow account, and a statement of interest rates, as permitted by the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605(e)(1)(B). On March 7, Ocwen responded with a form letter, setting forth Ocwen policies regarding information requests; another later, dated March 30, stated that Ocwen would take another 15 days, as permitted by RESPA, to review the inquiry. On April 22, Ocwen sent a letter stating that it could not identify a problem with the account and asking the Diedrichs to identify which month and report they disputed, explain the dispute, and send evidence. The Diedrichs sued, alleging violations of RESPA. The Seventh Circuit affirmed, agreeing that Ocwen’s responses were insufficient and violated RESPA, but that the allegations of damages were “conclusory and vague.” View "Diedrich v. Ocwen Loan Servicing, LLC" on Justia Law

The D’Oench, Duhme doctrine, which originated in the federal common law and is now codified at 12 U.S.C. 1823(e), prevents borrowers from relying on oral agreements they allegedly had with a failed bank to defend against collection efforts of a federal receiver like the FDIC. In this case, plaintiffs filed suit against Heritage for beach of contract and fraudulent inducement after Heritage foreclosed on plaintiffs' properties. While the suit was pending, Heritage was declared insolvent and the FDIC was appointed as receiver. That same day, the FDIC entered into a Purchase and Assumption Agreement with Trustmark, under which it transferred to Trustmark various Heritage assets and liabilities, including plaintiffs' notes and guaranties. The district court subsequently granted the FDIC's motion to dismiss. Trustmark then pleaded 1823(e) as a defense and filed counterclaims against plaintiffs for the amount still owing on the notes. The district court granted Trustmark's motion for summary judgment. The court rejected plaintiff's waiver arguments, concluding that nothing about Trustmark's agreement with the FDIC expressly or impliedly indicates a voluntary or intentional surrender by Trustmark of the section 1823(e) defense it inherited from the FDIC. The court also rejected plaintiffs' assertion that Trustmark waived this defense by raising it in a dilatory manner. Finally, even viewing an executive’s testimony about the purported side agreement in favor of plaintiffs, there is no evidence from which a jury might conclude that all of the conditions necessary to overcome section 1823(e) are present. Accordingly, the court affirmed the judgment. View "C&C Inv. Prop. v. Trustmark Nat'l Bank" on Justia Law

Appellant opened three business accounts at Respondent Wells Fargo Bank. Respondent later unilaterally closed the three accounts, stating that the reason for the closure was because Appellant had been involved in a criminal activity. Appellant filed a complaint alleging defamation, false light, and declaratory relief. Appellant then filed a motion to compel Respondent to produce documents regarding the closure of her accounts, as well as the risk assessment processes and analysis for closing these accounts. The discovery commissioner decided that Respondent was not required to provide the requested records under the Bank Secrecy Act. The district court affirmed the commissioner’s report and recommendations but ordered Respondent to provide a privilege log concerning the subject matter at issue. After Respondent submitted a privilege log, the discovery commissioner recommended that the documents be deemed confidential. The district court affirmed and adopted the report and recommendations. Appellant’s cause of action for declaratory relief was ultimately dismissed by the district court. The Supreme Court affirmed, holding that the discovery commissioner and the district court did not err in concluding that the documents at issue were protected by the Suspicious Activity Report privilege under the Bank Secrecy Act. View "Johnson v. Wells Fargo Bank Nat'l Ass'n" on Justia Law

Bayer filed an interpleader action to determine its obligations with regards to a settlement reached with Texana that came about as a result of lawsuits that arose when Bayer introduced genetically modified rice into the United States commercial long-grain rice supply. Stearns Bank and Amegy are both bank creditors of Texana. The district court found for Amegy Bank. The court held that the district court erred in determining that Stearns Bank’s foreclosure extinguished its rights to pursue the proceeds of its original collateral; while Stearns Bank does not have an interest in the Settlement Payment as an after-acquired general intangible because that payment arose as proceeds of a commercial tort claim, it does have an interest in the Settlement Payment to the extent the payment is for damage to the original collateral; and the district court will have to determine on remand what part of the sum held in the registry of the court constitutes proceeds of Stearns Bank’s original collateral and what part does not constitute such proceeds. Accordingly, the court reversed and remanded. View "Stearns Bank Nat'l Assoc. v. Amegy Bank Nat'l Assoc." on Justia Law

Arvest Bank petitioned for mandamus relief, seeking to have the Autauga Circuit Court to vacate its order denying Arvest's motion to quash a writ of execution obtained by Iberiabank f/k/a Capitalsouth Bank ("Iberia") against real property owned by Evelyn Niland ("Evelyn"). Thomas Karrh, II transferred the property Iberia wanted to sell to Evelyn and her husband Raymond Niland as joint tenants with right of survivorship. The Nilands quitclaimed the property to Evelyn, removing Raymond from the title. Raymond stopped paying an existing debt to Iberia. Iberia obtained a judgment against Raymond for close to $125,000. Iberia filed a lien against all of Raymond's property. Evelyn transferred the property back to herself and Raymond, attempting to create a joint tenancy with the right of survivorship. At the same time Evelyn tried this transfer, she and her husband executed a mortgage to Arvest Bank. Iberia secured a writ of execution against the property; Arvest intervened to try to quash a sheriff's sale of the property. Raymond died shortly thereafter. The trial court granted the intervention and stayed the sale proceedings, but after Iberia opposed these actions, the sheriff's sale was permitted to proceed. Finding that Evelyn indeed did create a joint tenancy with the right of survivorship, the Supreme Court found that Iberia's interest was extinguished with Raymond's death, and that Iberia could not attach its writ to the property. The order denying Arvest's motion to quash the writ of execution was reversed and the case remanded for the trial court to grant Arvest's request. View "Ex parte Arvest Bank." on Justia Law

Plaintiffs received a loan from JPMorgan Chase Bank, N.A. that was secured by a mortgage on their real property in Portland. When Plaintiffs finished paying off the mortgage, Chase executed a written mortgage release and recorded the document. The registry of deeds returned the recorded mortgage release to Chase, which retained the actual document and mailed a copy of the document to Plaintiffs. Plaintiffs filed this action claiming that Chase violated Me. Rev. Stat. 551, 33, which governs the discharge of a mortgage, by failing to mail them the original mortgage release document. The business and consumer docket dismissed the action for failure to state a claim, concluding that mailing a copy of the recorded document accomplishes the purposes of the statute. The Supreme Judicial Court vacated the judgment, holding that the trial court erred when it dismissed the action because Plaintiffs’ allegations were sufficient to state a claim that Chase violated section 551. View "Sabina v. JPMorgan Chase Bank, N.A." on Justia Law

In 2005, Connor Libby and Elena Chapa (collectively, Defendants) signed credit card agreements with Federated Capital Corporation’s predecessor-in-interest, a Utah corporation with its principal place of business in Pennsylvania. The agreements contained a forum selection clause and choice of law provision that adopted Utah substantive and procedural law to govern any dispute under the contract. The agreements required Defendants to make monthly payments to the address specific on their billings statements, and each billing statement required Defendants to send their payments to an address in Philadelphia, Pennsylvania. Defendants defaulted in 2006. In 2012, Federated filed separate claims in separate proceedings against Defendants. In each proceeding, the district court granted summary judgment in favor of Defendants, ruling that Utah’s borrowing statute required the court to apply Pennsylvania’s four-year statute of limitations, thereby barring Federated’s claims. Federated appealed, arguing that the agreement’s forum selection clause precluded the application of Utah’s borrowing statute. The Supreme Court affirmed, holding that the borrowing statute applied to and barred Federated’s causes of action. View "Federated Capital Corp. v. Libby" on Justia Law

Plaintiff, a borrower of a home loan, filed suit against lending banks, seeking an injunction to prevent a foreclosure. The trial court sustained the lenders’ demurrers and entered a judgment of dismissal. The court held that the availability of injunctive relief under the 2013 Homeowner's Bill of Rights (HBOR) is governed exclusively by its two provisions - Civil Code, sections 2924.12, subdivision (a)(1) and 2924.19, subdivision (a)(1) - in which the Legislature authorized the courts to interpose such relief into the nonjudicial foreclosure scheme. Neither provision authorizes a court to enjoin a violation of section 2924(a)(6). Thus, no injunctive relief is available for a violation of that section. Therefore, the court affirmed the judgment. Furthermore, plaintiff failed to show a reasonable possibility of amending his complaint to plead any of the grounds for injunctive relief that the HBOR authorizes. The court also affirmed the trial court’s order sustaining without leave to amend a demurrer to a separate breach of contract cause of action. View "Lucioni v. Bank of America" on Justia Law