Mealey's Mortgage Lending : Mealey's : Legal News & Analysis

Mealey's Mortgage Lending

January 24, 2024
Judge Says Loan Applicants Aren’t Purchasers Under Law, Didn’t Rely On Statements

PHILADELPHIA — Mortgage applicants who received what they admit was a conditional approval are not purchasers and, therefore, are not protected by Pennsylvania’s consumer protection law and lack any evidence of reliance on misstatements about the loan that could form the basis of a fraud claim, a federal judge in Pennsylvania said in granting summary judgment.
January 22, 2024
Consolidated Mr. Cooper Data Breach Plaintiffs To Submit Proposed Deadlines

DALLAS — Eight days after 20 putative class actions over a data breach experienced by Mr. Cooper Group Inc. were consolidated in Texas federal court, the judge granted the mortgage servicer’s motion for relief from the impending deadline for it to respond to the complaint against it, directing the parties to submit an agreed-upon schedule with proposed deadlines for filing motions, an amended complaint and other items.
January 19, 2024
Ohio Appeals Panel Upholds Class Certification In Mortgage Recording Case

CINCINNATI — Certification of a class in a case seeking damages for violations of Ohio’s mortgage-recording statute that occurred allegedly in part due to the coronavirus pandemic was appropriate as the lead plaintiff and class have standing, common questions predominate and amendments to the statute that barred class recovery do not impact this class as the amendments did not take effect until two months later, an Ohio appellate panel ruled.
January 19, 2024
Tennessee Bank Agrees To Pay $1.9M To Resolve Justice Department’s Redlining Suit

MEMPHIS, Tenn. — Patriot Bank has agreed to pay $1.9 million to resolve the U.S. Department of Justice’s allegations that it “engaged in a pattern or practice of unlawful redlining” by avoiding providing mortgages services to Memphis neighborhoods that are majority Black and Hispanic, according to a consent order filed in a federal court in Tennessee.
January 17, 2024
High Court Told ‘Chaos’ Will Ensue ‘In A World Without Chevron’ Deference

WASHINGTON, D.C. — The U.S. Supreme Court was told Jan. 17 that “chaos” will ensue “in a world without Chevron” deference by government attorneys, who urged it to apply stare decisis and uphold Chevron, which is being challenged in two cases arising out of federal fishing regulations.
January 17, 2024
Hawaii Panel Allows Some Claims Against Lender’s Attorney In Reverse Mortgage Case

HONOLULU — Two borrowers suing over foreclosure proceedings involving their reverse mortgages may proceed with certain fraud and elder abuse claims against their lender’s attorney and his firm, a Hawaii appellate panel ruled, opining in part that “the litigation privilege is not an absolute bar against an action by a borrower against a foreclosing lender’s attorney arising out of the attorney’s fraud on the court in a prior foreclosure action.”
January 17, 2024
Confusion Doesn’t Save Mortgage Claims, Servicer Tells 9th Circuit

RIVERSIDE, Calif. — Borrowers’ contract claims are time-barred where they knew that a problem existed with their loan but failed to further investigate, and confusion over who serviced the product cannot form the basis of statutory or implied covenant claims, a mortgage services company tells the Ninth Circuit U.S. Court of Appeals.
January 16, 2024
4th Circuit Denies Borrowers Permission To Appeal Amendment Of Class Definition

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals has denied borrowers’ petition for permission to appeal a Maryland federal judge’s December sua sponte ruling modifying the class definition in their suit alleging that they were overcharged for mortgage services as a result of a kickback scheme.
January 12, 2024
Borrower Seeks Preliminary Approval Of Junk Fees Pact In Nearly Decade-Old Case

SACRAMENTO, Calif. — A mortgagor who filed a class complaint alleging unlawfully marked-up fees against Ocwen Financial Corp. and Ocwen Loan Servicing LLC (together, Ocwen) in 2014, in part under the Racketeer Influenced and Corrupt Organizations Act (RICO) and California’s unfair competition law (UCL), filed a motion in a federal court in California seeking preliminary approval of a class settlement that will provide fee reimbursements to nationwide settlement class members and fee reversals or credits to members of a California settlement subclass.
January 11, 2024
Reverse-Mortgage Borrower Seeks Documents As Dismissal Motion Is Pending

CENTRAL ISLIP, N.Y. — Documents sought from one of the defendants in putative class case over fees and other charges for reverse mortgages complied with two prior courts orders as that defendant’s bankruptcy plan administrator consented to production of the documents and the documents being sought have not already been requested or produced in a separate case over property taxes against the same defendants, a borrower argues in a supplemental status report filed in a federal court in New York.
January 10, 2024
California Federal Judge Dismisses Amended Foreclosure Suit, This Time With Prejudice

CONCORD, Calif. — A federal judge in California has dismissed without leave to amend a lawsuit by homeowners alleging that their mortgage servicer violated federal and state statutes when it foreclosed on their property, finding that the Truth in Lending Act (TILA) claim in the second amended complaint remains time-barred and that the plaintiffs failed to state a claim for their various state law claims.
January 10, 2024
Judge Grants Summary Judgment In Case Involving Improperly Discharged Mortgage

BOSTON — A bank is entitled to summary judgment in its action seeking to strike the discharge of a mortgage, a federal judge in Massachusetts said after finding sufficient evidence that the discharge was entered in error and that nothing precluded the court from concluding otherwise.
January 09, 2024
Case Stayed After Borrowers, Servicer Reach Settlement In RESPA Violation Suit

MIAMI — A federal judge in Florida, acting sua sponte, stayed a suit filed by borrowers alleging that a mortgage servicer violated the Real Estate Settlement Procedures Act (RESPA) when filing a foreclosure suit against them and ordered the suit to be administratively closed after the parties notified the court that they had reached a settlement.
January 04, 2024
Homeowner Alleges Bank Improperly Denied Mortgage Relief Needed During COVID-19

JACKSON, Miss. — A Mississippi homeowner sued an Illinois mortgage servicer in Mississippi federal court alleging violations of the Fair Housing Act and Equal Credit Opportunity Act after the servicer foreclosed on her home without offering modifications to her mortgage terms the homeowner needed after experiencing income loss due to her divorce and the COVID-19 pandemic.
December 22, 2023
CFPB, DOJ Sue Texas Developers, Lender Alleging Predatory Lending

HOUSTON — The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) sued a Texas developer and lender and its affiliates in federal court, claiming that they operate an illegal “bait and switch” land sales scheme that targets Hispanic borrowers and sets them up with loans they cannot afford.
December 22, 2023
Federal Class Complaint Accuses Navy Federal Of Biased Mortgage Denials

ALEXANDRIA, Va. — Navy Federal Credit Union “systematically discriminates against would-be borrowers by race,” two African-American women allege in a putative class complaint filed in a federal court in Virgina in which they claim that in 2022, a white person had a 75% chance of being approved for a conventional mortgage while Black applicants had less than a 50% chance of success.
December 21, 2023
4th Circuit Denies Lender Permission To Appeal Class Certification Ruling

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals has denied lender Mr. Cooper Group Inc. permission to appeal a lower court’s class certification ruling in a case brought by mortgagors who allege that they paid excess charges due to illegal kickbacks.
December 21, 2023
Mortgagors Suing Over Data Theft May Seek Only Declaratory, Injunctive Relief

MIAMI — A federal judge in Florida largely granted a motion to dismiss by loan servicers whose data was accessed and personally identifiable information (PII) was stolen, permitting the mortgagors to proceed only with their final claim for declaratory judgment and injunctive relief.
December 19, 2023
Judge Modifies Class Over Loan Servicer’s Alleged Kickback Scheme

BALTIMORE — After rejecting a trial plan as unworkable, a federal judge in Maryland modified a class action definition sua sponte after concluding that recent disclosures on how the class of individuals allegedly overcharged for mortgage services due to kickbacks would calculate damages left the original certified class unable to meet the adequacy and typicality requirements.
December 19, 2023
U.S. As Amicus Supports High Court Vacating New York Escrow Law Preemption Ruling

WASHINGTON, D.C. — The United States filed an amicus brief in the U.S. Supreme Court arguing that a ruling by the Second Circuit U.S. Court of Appeals that New York’s escrow-interest law is preempted by the National Bank Act (NBA) should be vacated for “the correct preemption inquiry [to occur] in the first instance.”
December 19, 2023
Hawaii Appeals Court Vacates Summary Judgment In Reverse Mortgage Foreclosure Case

HONOLULU — A Hawaii appellate panel vacated summary judgment for the lender in a reverse mortgage foreclosure case, finding that the mortgage company, which was not the original lender in the transaction, failed to show that its records were trustworthy.
December 18, 2023
Judge Won’t Reconsider 2021 Ruling Rejecting Claim That Foreclosure Was Time-Barred

BROOKLYN, N.Y. — New York’s Foreclosure Abuse Prevention Act (FAPA), implemented in December 2022, does not require a federal judge to reconsider a December 2021 grant of summary judgment to the holder of the mortgage who previously failed to foreclose on a property and determined that a letter sent a week before the statute of limitations expired was found to be “an affirmative act to decelerate the mortgage,” a federal judge in New York ruled, opining that the mortgagor still had legal options available and that the state court should decide this issue concerning state law.
December 18, 2023
Mortgagors File Amended Class Complaint Accusing PHH Of Pay-To-Pay Fees

CAMDEN. N.J. — Two women accusing a mortgage servicing company of illegally marking up fees for borrowers who remit payments online or over the phone filed an amended class complaint in a federal court in New Jersey seeking damages, including treble damages and other relief.
December 15, 2023
Judge Adopts Report Finding RESPA Letter Postage Satisfies Injury-In-Fact Standard

MIAMI — A federal judge in Florida adopted a magistrate judge’s recommendation that the court find that postage and copying costs associated with a notice-and-cure letter constituted an injury in fact and provided standing for the plaintiffs to proceed with their Real Estate Settlement Procedures Act (RESPA).
December 15, 2023
In Dispute Over HELOC Advertising, Arizona Federal Judge Again Dismisses

WASHINGTON, D.C. — Four months after his putative class action against a home equity lender was dismissed as untimely, a plaintiff saw his amended complaint again rejected by a federal judge in Arizona, who this time ordered that the case be closed.