Justia Banking Opinion Summaries

Plaintiffs filed suit against Ocwen after their lender's purchase of their residence at a nonjudicial foreclosure sale, alleging that Ocwen violated Civil Code section 2923.6, the prohibition on "dual tracking" contained in the Homeowners Bill of Rights, when it conducted a foreclosure sale of plaintiffs' property while their loan modification application was pending. The trial court sustained Ocwen’s demurrer. However, the court concluded that by alleging the submission of the loan modification application three days after receipt of the Offer Letter, and the transmittal of the additional documents requested by Ocwen on the date of request, plaintiffs have sufficiently alleged that a complete loan modification application was pending at the time Ocwen foreclosed on their home in violation of section 2923.6. Accordingly, the court reversed the judgment of the trial court. View "Valbuena v. Ocwen Loan Servicing" on Justia Law

This dispute stemmed from a house that Debra Stevenson and her son Eugene Smith both own. After Stevenson refinanced her mortgage twice and then filed for bankruptcy, HSBC filed suit in Bankruptcy Court seeking equitable subrogation, which permits courts to declare that the owner of a mortgage (HSBC) has the same rights as an earlier-in-time owner of another mortgage (Wells Fargo). Only Stevenson signed the paperwork for the second refinancing with HSBC and Smith refused to sign because he thought the interest rate was too high. HSBC went ahead with the mortgage in full without Smith's signature. The court affirmed the Bankruptcy Court's conclusion that HSBC is entitled to equitable subrogation and rejected Stevenson and Smith’s claims that the mortgage is invalid under D.C. and federal lending laws. The court affirmed the judgment. View "In Re: Debra M. Stevenson" on Justia Law

In 2004, CashCall, a licensed lender, issued Montgomery a consumer credit account. In 2011, CashCall sold that debt to GCFS for collection. In 2012, GCFS sold the debt to Mountain Lion. Neither GCFS nor Mountain Lion is a licensed finance lender under the Finance Lenders Law. These entities are also not institutional investors within the meaning of section 22340. Mountain Lion subsequently sued Montgomery for payment on the debt. Montgomery filed a cross-complaint challenging the validity of her debt under Financial Code section 22340(a), which provides that “A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes.” The court of appeal affirmed dismissal of her cross-complaint. The legislative history indicates no intent to prohibit the sale of debt to noninstitutional investors. View "Montgomery v. GCFS, Inc." on Justia Law

Claiming that they were uncertain as to which entity held an enforceable mortgage on their home, Plaintiffs brought actions against numerous potential mortgagees, seeking “interim relief,” “quieting of title,” and “credit reporting.” The district court granted Defendants’ motions to dismiss for failure to state a claim. The First Circuit affirmed but for different reasons than those stated by the district court, holding that because Plaintiff relinquished legal title to the property and because Plaintiff’s assertions respecting uncertainty over the mortgage speak solely to the legal title and not to her equitable interest in the property, there was not the requisite adversity to cloud her claim of equitable title as required by the quiet title statute. View "Lister v. Bank of America, N.A." on Justia Law

In 2007, four members of the Stabler family - Stan and Rose Stabler, their child, Brad, and Brad’s wife Brenda - brought fraud actions against the First State Bank of Roscoe (FSB) and its president, John Beyers, alleging that FSB and Beyers conspired to induce the Stablers to sign notes and mortgages to pay debt that had been discharged due to bankruptcy. The circuit court rescinded one note and mortgage as to Brad and Brenda and allowed another note with a third-party bank to be enforced against them. After a trial, a jury found that FSB and Beyers fraudulently induced Stan and Rose to sign a promissory note and collateral real estate mortgage. Both sides appealed the circuit court’s judgment with respect to multiple transactions that they engaged in over the years. The Supreme Court reversed in part, holding that the trial court erred in (1) setting aside the $20,000 punitive damage award to Stan and Rose; and (2) ruling that a prior mortgagee that no longer holds any interest in a collateral real estate mortgage may file an addendum for the current mortgagee, and therefore, one collateral real estate mortgage lapsed for failure of the mortgagee, Beyers, to file an addendum. View "Stabler v. First State Bank of Roscoe" on Justia Law

Defendant executed an adjustable rate note to First National Bank of Arizona, wherein she agreed to repay a loan. To secure payment, Defendants executed a mortgage with the the bank. The loan was subsequently made part of a residential mortgage-back securitization trust, and Deutsche Bank Trust Company Americas became the owner of the note. Aurora Loan Servicing, LLC later assumed servicer obligations, and thereafter, the mortgage was assigned to Aurora. When Defendants defaulted under the note, Aurora commenced this foreclosure action. Defendants moved for summary judgment, asserting that Aurora did not have standing to bring this foreclosure action. Supreme Court denied the motion and then granted Aurora’s motion for summary judgment of foreclosure and sale. The Appellate Division affirmed the first order, concluding that Aurora had standing. The court reversed the judgment of foreclosure and sale for reasons not relevant to this appeal. The Court of Appeals affirmed the finding that Aurora had standing to commence this mortgage foreclosure action, holding that because the note was transferred to Aurora before the commencement of the foreclosure action, Aurora was vested with standing to foreclose. View "Aurora Loan Servs., LLC v. Taylor" on Justia Law

Defendant was a CEO and director of now bankrupt Agra Services of Canada, Inc (Agra Canada) and an officer and director of Agra USA. Agra Canada entered into a purchase agreement with Cooperative Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) under which Rabobank purchased and financed certain receivables of Agra Canada. Thereafter, Defendant and Eduardo Guzman Solis, Agra Canada’s president and a manager of both Agra businesses, signed personal guarantees in favor of Rabobank. After Guzman Solis died, an investigation revealed fraudulent receivables based on nonexistent transactions submitted by Guzman Solis. Rabobank sued Agra Canada, Agra USA, and the estate of Guzman Solis seeking to recover the millions of dollars owed to Rabobank under the purchase agreement and guarantees. Defendant appeared represented by counsel but failed to retain counsel for Agra USA. The district court entered default judgment against Agra USA. Rabobank then filed this action in state court alleging that Defendant was liable under the guaranty. The Appellate Division granted Rabobank summary judgment. Defendant appealed, arguing that the default judgment against him was obtained by Rabobank’s collusion. The Court of Appeals affirmed, holding (1) Defendant’s collusion claim constituted a defense barred by the language in the guaranty; and (2) Defendant’s claim of collusion was contradicted by the record. View "Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A. v. Navarro" on Justia Law

Sergio Acosta petitioned for a writ of mandamus to direct the circuit court to vacate an order granting a motion filed by Trinity Bank to strike Acosta's jury demand with respect to all counts in Acosta's counterclaim and third-party complaint in the bank's action against him. The bank filed filed suit seeking a judgment against Acosta for financial losses it incurred after Acosta defaulted on certain "Multipurpose Note and Security Agreement[s]" he had executed with the bank. The bank alleged that Acosta had executed two secured notes and one unsecured note, which, it said, Acosta had failed and/or refused to pay; that the bank had foreclosed on the properties pledged as collateral on the secured notes; and that proper credit had been applied to the notes. The bank sought a judgment for the balance due on the notes, plus interest, fees, costs, and attorney fees. Acosta filed a counterclaim against the bank, as well as a third-party complaint against two of its officers, alleging that he had entered into a business relationship with R&B Properties under the name of SilverPalm Properties, LLC; that loans from the bank were the principal source of funding for SilverPalm; that the financing plan was for SilverPalm to procure from the bank the funds to construct the properties, for SilverPalm to pay the interest on the notes until the properties were rented, and for SilverPalm to pay off the notes once the properties generated sufficient rental income to do so. Acosta and R&B Properties dissolved SilverPalm because of a downturn in the economy; but the bank induced that Acosta was personally liable for the notes previously secured only by SilverPalm The bank at some point advised Acosta that additional security was required to continue financing the notes, that Acosta declined to pledge additional security. The bank then called the notes due and foreclosed on the properties securing the notes. Acosta requested an accounting for the amounts claimed by the bank on the notes and the mortgages securing the notes, and he sought damages based on allegations of wantonness, breach of good faith and fair dealing, negligence, fraud, breach of fiduciary duty, unjust enrichment, and promissory estoppel. The counterclaim and third-party complaint included a demand for a jury trial. In its motion to strike Acosta's jury demand, the Bank relied on a jury-waiver provision in four Assignments of Rents and Leases that Acosta had executed in consideration of the notes. The trial court initially denied the bank's motion to strike, and then granted it after reconsideration. The Supreme Court concluded that Acosta demonstrated a clear legal right to a jury trial on the claims asserted in his counterclaim and third-party complaint. As such, the Court granted the petition and directed the trial court to vacate its order striking Acosta's jury demand. View "Ex parte Sergio Acosta." on Justia Law

Plaintiff Bank was the owner and holder of note secured by a mortgage on commercial property in Brooklyn. When Defendant, the mortgagor and obligor on the note, defaulted, Bank commenced a mortgage foreclosure action against Defendant. The property was sold at auction to Bank. Bank subsequently retained an appraiser to determine the fair market value of the property. Bank then moved for a deficiency judgment against Defendant in an amount representing the outstanding amount Bank was owed less the alleged fair market value. Supreme Court denied Bank’s motion for a deficiency judgment, holding that Bank failed to meet its burden of establishing the fair market value of the premises because the affidavit from the appraiser was conclusory and lacked specific information about how he reached his fair market value determination. The Appellate Division affirmed. The Court of Appeals modified the order of the Appellate Division, holding that Supreme Court correctly found that the appraiser’s affidavit was insufficient to meet Bank’s burden, but that the court should have permitted Bank to submit additional proof establishing fair market value rather than denying the deficiency judgment motion outright. View "Flushing Savings Bank, FSB v. Bitar" on Justia Law

Over four years, Dade, a former licensed real estate agent, with co-defendants, facilitated loans to purchase residential real estate by knowingly providing lenders with false statements and documents. Dade referred potential buyers to loan officers and provided false payroll stubs and W-2 forms from fake companies. Dade (with help) refinanced a mortgage on his own Chicago property, stating that he was paying monthly rent of $1,450 (he did not live in the house), and provided a rental verification from “Jireh,” which did not exist. Dade received a $156,000 loan. He was charged with bank fraud, 18 U.S.C. 1344, wire fraud, section 1343, and mail fraud, section 1341. He pleaded guilty to bank fraud, based on the fraudulent refinancing; the remaining charges were dismissed. The government sought a 2-level upward adjustment for his role as an organizer, leader, manager, or supervisor in the offense, U.S.S.G. 3B1.1(c). When preparing the presentence report, however, the probation officer concluded that a 4-level upward adjustment would be appropriate, stating that the scheme had involved five or more participants and Dade had organized the scheme. The government adopted that position, recounting the facts underlying the charges dismissed as part of Dade’s plea agreement. The Seventh Circuit affirmed his 20-month sentence, upholding the upward adjustment. View "United States v. Dade" on Justia Law