Category Archives: Mortgage Rules

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Eleventh Circuit Declines to Expand Reach of “Least Sophisticated Consumer” Standard In the Context of Sending Periodic Mortgage Statements Following Bankruptcy Discharge

The Eleventh Circuit recently clarified that sending periodic mortgage statements following a debtor’s bankruptcy discharge is not misleading to the “least sophisticated consumer.” In Helman v. Bank of America, 15-13672, 2017 WL 1350728 (11th Cir. April 12, 2017) Gayle Helman filed suit, alleging that Bank of America violated the Fair Debt Collections Practices Act (FDCPA), … Continue Reading

Eleventh Circuit accepts Spokeo argument; holds that mere procedural violation is not enough to confer standing

In a victory for defendants, the Eleventh Circuit recently agreed that a mere procedural violation—the kind of injury that has become the favorite of the plaintiffs’ bar—is insufficient to confer Article III standing. More specifically, the Eleventh Circuit concluded that a certified return receipt will satisfy a lender’s obligation under Regulation X to provide written … Continue Reading

Alabama Court of Civil Appeals Holds Questions Regarding Propriety of Foreclosure May Be Raised as Affirmative Defense to Ejectment Even If Foreclosure Occurred More Than One Year Prior to Ejectment Action

The Alabama Court of Civil Appeals recently held in Pittman v. Regions Bank that questions about the propriety of a foreclosure may be raised more than one year after the foreclosure as an affirmative defense to an ejectment action, even if that party did not challenge the original foreclosure. In 2008, Windham and Rhonda Pittman—along … Continue Reading

No “Free House” in Florida

Last week, after much anticipation and speculation, the Florida Supreme Court decided Bartram v. U.S. Bank National Association, No. SC14-1265 (Fla. Nov. 3, 2016). To the relief of lenders, the Court rejected the borrower’s attempt to use Florida’s five-year statute of limitations for mortgage foreclosures to avoid the mortgage on his home based on the bank’s earlier unsuccessful attempt to foreclose. This decision means that Florida courts will be less likely to find that subsequent attempts to foreclosure are time-barred.… Continue Reading

Citing Spokeo, Eleventh Circuit Rejects Class Action Over Late Mortgage Satisfaction Recordation, Holding Plaintiff Had Not Alleged Concrete Injury-In-Fact Due to Statutory Violation

The Eleventh Circuit recently held in Nicklaw v. CitiMortgage, Inc.(No. 15-14216) that a plaintiff lacks standing to sue a creditor where the plaintiff merely alleges that the creditor failed to timely record a mortgage satisfaction, as it is statutorily required to do, but does not allege any additional concrete injury.… Continue Reading

Eleventh Circuit Holds That Reg. X Does Not Require Mortgage Servicers to Evaluate Untimely Loan Modification Plans Even If the Foreclosure Is Rescheduled So That the Sale Actually Occurs Beyond Reg. X’s 37-day Window

In a recent decision, the Eleventh Circuit (Lage v. Ocwen Loan Servicing, LLC, No. 15-15558 (11th Cir. Oct. 7, 2016)) held that a loan servicer is not required to evaluate a completed loan modification application if that application is submitted less than 37 days before a foreclosure sale is originally scheduled to occur. The Court … Continue Reading

Alabama Court of Civil Appeals reverses summary judgment granted in favor of mortgage servicer based on res judicata defense.

In Sims v. JPMC Specialty Mortgage, LLC, No. 2150437, a borrower had been involved in two previous lawsuits arising out of a mortgage servicer’s foreclosure upon the borrower’s property. The servicer obtained summary judgment in the trial court based on the doctrine of res judicata.  The Alabama Court of Civil Appeals reversed, finding that genuine … Continue Reading

Joint Tenancy Lienholders Should Timely Execute on Judgment Liens in Order to Avoid Losing Property Interest

The Alabama Supreme Court recently held in Ex parte Arvest Bank, that an unexecuted judgment lien against the property interest of one joint tenant does not sever a joint tenancy with the right of survivorship, thereby extinguishing the lienholder’s rights in the property when that joint tenant dies.… Continue Reading

Eleventh Circuit Affirms Jury Verdict Against Mortgage Servicer for Extreme and Outrageous Conduct

Following the Eleventh Circuit’s decision last month in McGinnis v. American Home Mortgage Servicing, Inc., No. 14-13404, mortgage servicers should be aware that failing to recognize and correct miscalculations of a borrower’s payment may subject them to liability for extreme and outrageous conduct in certain circumstances. American Home Mortgage Servicing, Inc. took over the servicing … Continue Reading

New class action complaint alleges that post-payment interest charges for certain home mortgages are invalid because of insufficient disclosures under 24 C.F.R. § 203.558

A class action filed last week in the Northern District of Georgia disputes the ability of a lender to charge post-payment interest for certain home mortgage loans when the lender has not provided a very specific disclosure form. In Felix v. SunTrust Mortgage, Inc., No. 16-66, Sarah Felix alleges the she took out an FHA-insured … Continue Reading

Eleventh Circuit holds that TILA does not create claim against an assignee for failure to timely provide payoff balance to mortgagor

The Eleventh Circuit recently reduced mortgage assignees’ potential exposure to liability for a servicer’s alleged violation of the Truth in Lending Act (“TILA”). In Evanto v. Federal National Mortgage Association, No. 15-11450, (11th Cir. Mar. 1, 2016), the Court held that TILA does not create a cause of action against an assignee for a mortgage … Continue Reading

Alabama Supreme Court rejects motion to compel arbitration because account holder did not click on link to arbitration provision

Following the Alabama Supreme Court’s decision last Friday in Moore-Dennis v. Franklin, Nos. 1131142, 1131176, Alabama lenders should immediately review their account agreements to ensure any amendments to those agreements will survive judicial scrutiny. This is especially true for any lenders who have used electronic means to notify account holders of an amendment. When Joseph … Continue Reading

Recent Letter From CFPB Director Makes Clear That Mortgage Lenders Should Be Promptly Correcting Defects In Loan Documents, Even After Closing

In December 2015, the Mortgage Bankers Association wrote to the Consumer Financial Protection Bureau for clarification regarding the implementation of the recent TILA-RESPA Integrated Disclosure (“TRID”) rule. In its letter to the CFPB, the Mortgage Bankers Association expressed concern that third-party due diligence firms are failing a high percentage of loans in the secondary market over minor TRID violations, in part due to uncertainty as to what errors in the Loan Estimate document may be remedied by the Closing Disclosure form.

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New Fifth Circuit opinion is a warning to lenders using “as is” waivers in real estate contracts

In Jones v. Wells Fargo Bank, N.A., No. 15-30031, — F. App’x —, (5th Cir. Sept. 29, 2015), the Fifth Circuit reversed the dismissal of a lawsuit against Wells Fargo for its alleged failure to disclose known mold problems, even though the sales contract contained an “as is” waiver that specifically addressed mold. Jones is … Continue Reading

Alabama Supreme Court follows line of recent federal court decisions holding that Alabama law does not recognize a cause of action for wanton mortgage servicing

As Chief Judge Steele in the Southern District of Alabama recently put it, “a veritable avalanche” of recent federal cases has found that Alabama law does not recognize a cause of action for negligence or wantonness in the servicing of a mortgage account. Borrowers’ claims for negligence and wantonness against mortgage servicers have been routinely … Continue Reading

Reach of contractual jury trial waivers narrowed by Alabama Supreme Court

In Ex Parte Acosta, No. 1140200, — So. 3d —, No. 1140200, 2015 WL 3537476 (Ala. June 5, 2015), the Alabama Supreme Court refused to incorporate a jury trial waiver from a collateral loan document into a Promissory Note. Instead, the Court construed the jury trial waiver provision strictly and as only applying to claims … Continue Reading

There’s Nothing Magic About the “Original” Promissory Note

In a victory for creditors, the Alabama Court of Civil Appeals recently reversed a trial judge’s decision to exclude a copy of a promissory note from evidence simply because it was not an original. Without the promissory note in evidence, the creditor lost its case at trial, so the higher court reversed the judgment for … Continue Reading

Florida Case Underscores Importance of the prior WAMCO decision on Admissibility of a Predecessor Servicer’s Records

A recent decision from the Second DCA reinforces that a subsequent mortgagee or servicer must be prepared to lay a proper foundation in order to introduce a predecessor mortgagee or servicer’s payment history by testifying as to the successor’s independent verification of the predecessor’s records and the procedures used to verify the accuracy of the … Continue Reading

Alabama Legislature Reduces Redemption Period for Homestead Property and Adds Foreclosure Notice Requirements

Alabama law currently provides that real property sold at a foreclosure or execution sale may be redeemed up to one year after the sale date.  This one-year redemption period is set to change, however, for certain residential properties.  Recent legislation passed by the Alabama Legislature shortens the redemption period to 180 days “for residential property … Continue Reading

Eleventh Circuit Affirms Dismissal of RESPA Class Action Holding That (1) Mortgage Service Provider’s Procurement of Closing Attorney Is More Than “Nominal” Service and (2) RESPA Does Not Prevent Mortgage Service Provider From Marking Up Price of a Third-Party Service

The Eleventh Circuit recently affirmed the dismissal of a putative class action relating to the settlement charges a mortgage service provider is allowed to collect under the Real Estate Settlement Procedures Act (“RESPA”).  In Clements v. LSI Title Agency, Inc., No. 14-11636, the Court held: (1) that a mortgage service provider does not perform only … Continue Reading

Florida Second District Court of Appeal holds that Florida 20 year–not 5 year–statute of repose applies to foreclosure action where maturity date of loan agreement obligation secured by mortgage at issue not ascertainable from the public record.

In CCM Pathfinder Palm Harbor Management, LLC v. Unknown Heirs of Gendron, No. 2D13-5286 (Fla. 2d DCA January 21, 2015), CCM Pathfinder Palm Harbor Management, LLC, a mortgage loan servicing agent for a consortium of lenders that financed a $29 million condominium conversion loan in 2005, filed a March 2013 mortgage foreclosure action in the … Continue Reading

Mortgage Servicer Not Required to Make “Corrections” to Borrower’s Account in Response to a QWR When Servicer Provided Documents and Information Explaining Why it Believed Account to be Correct

On Tuesday February 10, 2015, the United States District Court for Southern District of Alabama adopted a Magistrate Judge’s Report and Recommendation dismissing a Real Estate Settlement Procedures Act (RESPA) claim brought by a borrower against a former servicer of her mortgage loan.  The borrower’s RESPA claim was based on a response to a Qualified … Continue Reading