Justia Banking Opinion Summaries

In 2005, the Robertsons borrowed $192,000, secured by a mortgage on their Memphis home. The note was bundled into a mortgage-backed trust with U.S. Bank as designated supervisor; Wilson as trustee, responsible for conducting any foreclosure sale; and MERS (Mortgage Electronic Registration Systems) as the beneficiary. MERS acts as an agent for the owners as mortgage notes are transferred on the secondary market.The Robertsons stopped making payments in 2011. MERS assigned the deed to U.S. Bank. In 2014, Wilson sent the Robertsons a Notice of Trustee’s Sale. The Robertsons responded with a “notice of rescission,” alleging that U.S. Bank had violated the Truth in Lending Act (TILA) and lacked standing to foreclose, then sued U.S. Bank and Wilson in state court. U.S. Bank removed the case to federal court, where the Robertsons agreed to dismiss Wilson. The district court granted U.S. Bank summary judgment. The Sixth Circuit affirmed, rejecting arguments that Wilson waived its right to remove the case; U.S. Bank failed to comply with a TILA notice requirement, giving the Robertsons the right to rescind the loan; U.S. Bank lacked standing to enforce the note because it never showed it had a stake in the loan; and U.S. Bank forfeited its right to foreclose when it failed to raise the claim in its answer to the Robertsons’ complaint. View "Robertson v. U.S. Bank, N.A." on Justia Law

This case concerns a dispute between the parties over who has priority ownership of property located in Las Vegas. Nevada has a statute that gives a homeowners’ association lien priority over “all other liens and encumbrances” (subject to some limited exceptions) for up to nine months of unpaid HOA fees. NEV. REV. STAT. 116.3116(2)–(3). After the HOA foreclosed on property that Ashley Spencer bought, Weeping Hollow purchased the property at the foreclosure sale. Just over two months after the HOA foreclosure sale, Wells Fargo attempted to foreclose on the property under its 2008 deed of trust. Weeping Hollow filed suit in state court against Spencer, Wells Fargo, and a title insurance company. Wells Fargo removed to federal court. The district court then granted Wells Fargo’s motion to dismiss Weeping Hollow’s complaint. After the district court issued its ruling, the Nevada Supreme Court issued an opinion that expressly abrogates the district court’s interpretation of the HOA statute. Under the Nevada Supreme Court’s holding, a foreclosure on an HOA lien extinguishes an earlier-recorded security interest even though the HOA lien was recorded later. The court held that the district court erred in applying the fraudulent-joinder doctrine to this case. Because Spencer was not shown to be fraudulently joined, her presence in the action divests the district court of diversity jurisdiction and the district court must remand the case to state court. Since this case should never have made it into federal court, the court has no reason to address Wells Fargo’s constitutional and state-law arguments. View "Weeping Hollow Ave. Trust v. Spencer" on Justia Law

Plaintiff filed suit against his lender, Impac, and others, alleging causes of action arising from the nonjudicial foreclosure sale of his residence. The trial court sustained defendants' demurrer to the entire pleading without leave to amend, and thereafter entered a judgment of dismissal. The court concluded that plaintiff offered no citation to federal or California authority (other than Glaski v. Bank of America, which the court declined to follow) to support his assertion that a 2009 assignment is void because it was made after the ISA Trust’s closing date; plaintiff has the burden to prove that the nonjudicial foreclosure was wrongful; even if language in the deed of trust might have provided plaintiff with standing to assert a defense to prevent a foreclosure, it does not help him in this instance; the problem with plaintiff's claims is not that the deed of trust precludes him from alleging an invalid assignment, but that he has not sufficiently alleged an invalid assignment; and, because he has not alleged sufficient facts to establish that critical allegation, the proposed new cause of action would also fail as a matter of law. Accordingly, the court affirmed the judgment. View "Yhudai v. Impac Funding Corp." on Justia Law

Catherine Rodriguez defaulted on her loan and elected for foreclosure mediation. At a third, unsuccessful mediation between Nationstar Mortgage, LLC, as the agent of the Bank of New York Mellon (BONY), and Rodriguez, Nationstar presented an uncertified, inaccurate copy of the promissory note. Thereafter, BONY filed a complaint for judicial foreclosure. Upon learning that the note presented at the third mediation was inaccurate, Rodriguez filed a petition for judicial review of the mediation against Nationstar and BONY (collectively, Nationstar). The district court excused the untimeliness of the petition based on good cause and found that the note’s certification was false and that Nationstar knew of the falsity. The court sanctioned Nationstar $100,000. The Supreme Court reversed, holding that the district court lacked jurisdiction to consider the petition for judicial review because the filing of such a petition is not permitted beyond the thirty-day time period provided in Nevada’s Foreclosure Mediation Rule 21(2), even when a party discovers fraud months after the mediation. View "Nationstar Mortgage v. Rodriguez" on Justia Law

In 2003, Valley View and, Bedford Downs, wanted to operate “racinos,” combination horse tracks and casinos. Each would need the last harness-racing license available in Pennsylvania to do so. Valley View agreed to acquire Bedford for $55 million, with Citizens Bank acting as escrow agent. Valley View borrowed money from Credit Suisse. Valley View then obtained the harness-racing license, but failed to secure the needed gambling license and filed for Chapter 11 bankruptcy. The Trustee sued Merit, a 30% shareholder in Bedford, alleging that Bedford’s transfer to Valley View was avoidable under 11 U.S.C. 544, 548(a)(1)(b), and 550, and the money was properly part of the bankruptcy estate. Merit maintained that the transfer was protected under the safe harbor, 11 U.S.C. 546(e), which protects transfers that are “margin payment[s]” or “settlement payment[s]” “made by or to (or for the benefit of)” certain entities including commodity brokers, securities clearing agencies, and “financial institutions” and transfers “made by or to (or for the benefit of)” the same types of entities “in connection with a securities contract.” Merit relied on the involvement of Citizens Bank and Credit Suisse. The district court agreed with Merit. The Seventh Circuit reversed; section 546(e) does not protect transfers that are simply conducted through financial institutions (or the other section 546(e) entities), where the entity is neither the debtor nor the transferee but only the conduit. View "FTI Consulting, Inc. v. Merit Mgmt. Group, LP" on Justia Law

Appellant filed two legal actions. Appellant filed a complaint in federal court alleging violations of his due process and equal protection rights. The federal district court dismissed the complaint, and Appellant appealed. Appellant also filed this original action seeking a writ of mandamus to compel an employee of JPMorgan Chase Bank to pay him a certain amount of money. The court of appeals dismissed the complaint. The Supreme Court affirmed, holding that Appellant’s claims were barred by res judicata, Appellant had an adequate remedy in the ordinary course of law, and Appellant failed to identify a clear legal right to the relief he sought. View "State ex rel. McQueen v. Weibling-Holliday" on Justia Law

Ocean Communities Federal Credit Union filed a foreclosure complaint against Guy Roberge and Lisa Pombriant concerning certain residential property. The district court granted a summary judgment for foreclosure and sale in favor of the Credit Union in the amount of $144,998.97, concluding that the Credit Union established its entitlement to a summary judgment as to each element of foreclosure. The Supreme Judicial Court vacated the judgment of the district court, holding that the Credit Union’s summary judgment filings failed to establish at least four of the necessary eight elements for a residential foreclosure. Remanded for a trial. View "Ocean Cmtys. Fed. Credit Union v. Roberge" on Justia Law

American Express Bank FSB filed a complaint alleging that Diane Deering owed $22,339.94 in credit card debt. After a trial, the district court entered judgment in favor of American Express in that amount. On appeal, Deering argued that the trial court erred in admitting American Express’s business records pursuant to the business records exception to the hearsay rule. Specifically, Deering challenged the trial court’s determination that American Express provided the required foundation for admission of the documents. The Supreme Judicial Court affirmed, holding that the trial court did not err or abuse its discretion in admitting the records over Deering’s objections. View "American Express Bank FSB v. Deering" on Justia Law

Claimants-Appellants appealed an award of summary judgment which forfeited to the United States various claimants’ interests in multiple properties, including a 36‐story office building located at 650 Fifth Avenue in Manhattan, real properties in Maryland, Texas, California, Virginia, and New York, and the contents of several bank accounts. Also at issue is the September 9, 2013 order denying a motion to suppress evidence seized from the Alavi Foundation’s and the 650 Fifth Avenue Company’s office. The court vacated the judgment as to Claimants Alavi Foundation and the 650 Fifth Ave. Co., of which Alavi is a 60% owner because there are material issues of fact as to whether the Alavi Foundation knew that Assa Corporation, its partner in the 650 Fifth Ave. Co. Partnership, continued after 1995, to be owned or controlled by Bank Melli Iran, which is itself owned or controlled by the Government of Iran, a designated threat to this nation’s national security; the district court erred in sua sponte considering and rejecting claimants’ possible statute of limitations defense without affording notice and a reasonable time to respond; in rejecting claimants’ motion to suppress evidence seized pursuant to a challenged warrant, the district court erred in ruling that claimants’ civil discovery obligations obviate the need for any Fourth Amendment analysis; and the district court erred in its alternative ruling that every item of unlawfully seized evidence would have been inevitably discovered. Accordingly, the court vacated and remanded for further proceedings. View "In re 650 Fifth Avenue and Related Properties" on Justia Law

In 2007, Naifeh and Ristic obtained a loan from WaMu for San Francisco property. WaMu provided a disclosure of the loan terms as required by the Truth in Lending Act (TILA, 15 U.S.C. 1601). After the borrowers defaulted, Naifeh sent letters, asserting that she and Ristic were rescinding the loan under “Regulation Z” (12 C.F.R. 226.33(b)) based on TILA disclosure deficiencies. A month before the scheduled foreclosure sale Naifeh caused several documents to be recorded with the county, purporting to show she owed nothing on the loan. Naifeh was present at the trustee’s sale, distributing notices representing that the trustee knew there were contrary claims to title. No one bid. A Trustee’s Deed was recorded, granting title to BofA. Naifeh continued to record documents. BofA filed suit, seeking cancellation of instruments and quiet title. The trial court held that Naifeh’s notice of rescission was insufficient. Because of a decision subsequently issued by the U.S. Supreme Court, the court of appeal vacated and remanded for adjudication of the rescission defense. A borrower may rescind the loan transaction under TILA without filing suit, but when the rescission is challenged, a court may decide whether the notice was timely and whether the TILA procedure should be modified in light of particular circumstances. View "U.S. Bank Nat'l Ass'n as Tr. v. Naifeh" on Justia Law