Category Archives: Mortgage Foreclosures

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The Supreme Court Just Held that TILA Rescission is Accomplished with Notice Alone

Until today, courts were split over what steps borrowers must take to rescind a home loan. Some courts had ruled that a borrower simply had to send a rescission notice to his creditor within three years after taking out a loan. Others said the notice alone does not suffice; a lawsuit must be filed within three … Continue reading this entry

Remedies Against Receiver Must Be Exhausted Before Claim Against Assignee

From the consumer plaintiffs’ perspective, a recent appellate decision in Rundgren v. Washington Mutual Bank, FA, is far from Utopia. The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of claims brought by singer-songwriter Todd Rundgren and his wife Michelle Rundgren against JPMorgan Chase Bank, N.A. (Chase). Since the Rundgrens’ claims relate to alleged … Continue reading this entry

CFPB Gives Heads Up to Mortgage Servicers

During the Great Recession courts expressed frustration with sloppy paperwork and borrowers’ inability to get anyone to help them work out problem loans. Many courts refused to allow mortgage foreclosures to proceed because of the perceived mess. The Consumer Financial Protection Bureau just made it clear it was not going to tolerate these problems when it comes … Continue reading this entry

"Qualified Written Request" Under RESPA – No “Magic” Words, But the Right Questions Must be Asked

For the first time, the federal Court of Appeals for the Ninth Circuit recently opined on what constitutes a “qualified written request” under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. Section 2605(e), in Medrano et al. v. Flagstar Bank, FSB et al., 2012 U.S. App. LEXIS 25274 (9th Cir. Dec. 11, 2012). While the … Continue reading this entry

The OCC Agrees to Halt the Independent Foreclosure Review Process

Did the OCC finally agree that the costs of the foreclosure look-back process overwhelmed its benefits, or was the government simply under-staffed and over-budgeted? It appears to be the financial world’s equivalent to the chicken or the egg question. Nonetheless, the OCC announced this week that it and the Federal Reserve had reached a deal with the … Continue reading this entry

Ringing in the New Year in 2013: California’s Homeowner's Bill of Rights Law Takes Effect

Dubbed as the “Homeowner’s Bill of Rights,” on July 11, 2012, California Governor Jerry Brown signed into law AB 278/SB 900 marking the first U.S. state to adopt into law the residential mortgage foreclosure reform principles outlined in the February 2012 National Mortgage Servicing Settlement with the nation’s top five mortgage servicers. The Homeowner’s Bill of … Continue reading this entry

TILA Does Not Require a Loan Servicer to Identify the Loan’s Owner

The Ninth Circuit recently sided with a loan servicer who was sued by a borrower for failing to provide him with the loan owner’s information. In Gale v. First Franklin Loan Services et al., 686 F.3d 1055 (9th Cir. 2012), amended, 2012 U.S. App. LEXIS 18545 (9th Cir. Aug. 31, 2012), the Ninth Circuit held that … Continue reading this entry

National Mortgage Database Formed

The Consumer Financial Protection Bureau (“CFPB”) and the Federal Housing Finance Agency (FHFA”) have agreed to jointly produce a National Mortgage Database containing detailed mortgage loan information. In a press release dated November 1, 2012, the CFPB said: “The database will primarily be used to support the agencies’ policymaking and research efforts and to help … Continue reading this entry

Illinois Attorney General Sues Mortgage Rescue Companies For Alleged UDAP And Other Violations

On behalf of the people of the State of Illinois, Illinois Attorney General Lisa Madigan filed five lawsuits on September 27, 2011 against a host of companies, individuals, and lawyers engaged in mortgage rescue work. The cases — People v. Exelpol Management & Consulting, Inc., People v. Loan Litigators International, LLC et al., People v. ZeTrust Legal Services, … Continue reading this entry

Illinois Appellate Court Reaffirms That Illinois Interest Act Does Not Prohibit Use of 365/360 Interest Calculation Method

In a July 12, 2011, opinion, the First District of the Illinois Appellate Court once again held that the Interest Act did not prohibit a lender from using a 365/360 basis to calculate interest, so long as the method of calculation is clearly set forth in the note. Asset Exchange II, LLC v. First Choice … Continue reading this entry

Missouri District Court Dismisses Breach of Contract Claim Based on Use of 365/360 Interest Calculation Method

On February 8, 2011, the United States District Court for the Eastern District of Missouri rejected a plaintiff’s claim that the calculation of interest on the basis of a 360-day year breached the parties’ contract under Illinois law, in Kreisler & Kreisler, LLC v. National City Bank et al., No. 4:10-cv-00956. In the first case … Continue reading this entry

The Doctrine of Issue Preclusion Barred Claims Based Upon an Alleged Fraudulent Mortgage

In recent decisions, various courts have relied upon the Rooker-Feldman Doctrine to bar a consumer’s federal claims regarding the validity of his or her mortgage after the lender obtained a state court foreclosure judgment. See, e.g., Mohorne v. Beal Bank, S.S.B., 419 B.R. 488, 496-97 (S.D. Fla. 2009) (Altonaga, J.); Figueroa v. Merscorp., Inc., et al., … Continue reading this entry

Massachusetts High Court Voids Foreclosure of Securitized Mortgage

In a recent decision that has already received national publicity, the Massachusetts Supreme Judicial Court has become the first state high court to rule that mortgages securing loans that are pooled into a trust and converted into mortgage-backed securities must be specifically assigned to the foreclosing lender before the foreclosure is commenced. A discussion of … Continue reading this entry

Recent Lawsuits Allege Miscommunication Regarding Loan Modification Programs

Recently-filed complaints reflect disputes between borrowers and mortgage servicers over loan modification programs. Mortgage servicers may provide loan modifications to borrowers through their own programs. Some mortgage servicers may provide loan modifications to eligible borrowers through the Home Affordable Modification Program (“HAMP”), an Obama administration program. In lawsuits currently pending in the federal courts, borrowers … Continue reading this entry