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), Florida Consumer Collection Practices Act (FCCPA), and other state laws when it sent Ms. Helman periodic mortgage statements after her mortgage loan was discharged in bankruptcy.  She claimed that the statements unlawfully attempted to collect a discharged debt and that such communications would be misleading to the least sophisticated consumer because it suggested she remained liable for the debt.

Continue Reading 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 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 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

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 held that this applies even when the foreclosure sale on the property is rescheduled to a later date, making the loan modification application fall outside the 37-day window.

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 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 issues of material fact precluded summary judgment based on res judicata.

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

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

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 of mortgages on several rental properties in Georgia owned by Jane McGinnis. American’s welcome letter to McGinnis stated that her monthly payment had risen over $200 from the amount she had been paying the previous servicer. Believing she did not owe this additional amount, McGinnis continued paying the original amount, and American charged her additional fees for the apparent deficiency. Eventually, American conceded that it had miscalculated the payment amount, but insisted that McGinnis pay the previously incurred late fees. American eventually foreclosed on one of McGinnis’s properties due to nonpayment of these late fees and related charges. McGinnis sued America for wrongful foreclosure, intentional infliction of emotional distress, and conversion, among others.

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