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

Mealey's Mortgage Lending

October 11, 2023
Borrower’s Class Claims Of Racially Discriminatory Loans Dismissed By Federal Judge

CHICAGO — A mortgagor who accuses a lender of charging Black borrowers higher interest rates and fewer credits to lower closing costs than what is offered to white borrowers failed to state plausible claims for racial bias, a federal judge in Illinois ruled, granting the lender’s motion to dismiss the putative class complaint with leave to amend.
October 11, 2023
Mortgage Servicer Accuses Payment Processor Of Misusing Customer Data

DALLAS — A mortgage payment processor misused a mortgage servicer’s customer data when it conducted quality assurance (QA) testing with customers’ nonpublic, personal information while in a live production environment rather than a walled-off testing environment, the mortgage servicer alleges in a complaint filed in a federal court in Texas.
October 11, 2023
3rd Circuit Won’t Reconsider Dismissal Of Borrower’s Suit Against Bank

PHILADELPHIA — The Third Circuit U.S. Court of Appeals denied a borrower’s pro se request to rehear a panel’s decision affirming the dismissal of his complaint against a bank and others arising from an earlier Pennsylvania state court foreclosure action.
October 11, 2023
Judge Dismisses UCL Claim, Allows Debt-Collection Claims In Mortgage Servicing Row

SAN FRANCISCO — A California federal magistrate judge granted in part and denied in part a motion to dismiss a suit brought against a mortgage lender, its affiliate and a servicer, finding that the borrower and a resident of the property at issue did not allege a loss of money as required by their claim for violation of California’s unfair competition law (UCL) but brought valid debt collection claims for unfair practices pertaining to payment of a consumer debt during a COVID-19 forbearance period.
October 09, 2023
Summary Judgment Granted On Fraud And Other Claims Against Mortgage Servicer

DALLAS — A federal judge in Texas accepted a magistrate judge’s recommendation to grant a mortgage servicer’s motion for summary judgment on two borrowers’ claims of fraud, breach of contract and promissory estoppel, dismissing the claims with prejudice in the case alleging that the servicer told borrowers that their mortgage was “forgiven” then later attempted to collect the alleged debt.
October 09, 2023
Amici Support High Court Arguments That FCRA Waives USDA’s Sovereign Immunity

WASHINGTON, D.C. — A think tank and several nonprofits and legal clinics filed two amicus curiae briefs in the U.S. Supreme Court supporting arguments by a borrower that the Fair Credit Reporting Act (FCRA) “unambiguously authoriz[es] suit against federal agencies,” including the U.S. Department of Agriculture, clearing the way for the borrower to proceed with a lawsuit alleging that the USDA misrepresented that he was past due on his mortgage.
October 03, 2023
High Court Won’t Review Dismissal Of Mortgage Default Suit

WASHINGTON, D.C. — The U.S. Supreme Court on Oct 2. declined to review a Fourth Circuit U.S. Court of Appeals panel’s dismissal of a borrower’s appeal seeking to reverse dismissal orders against her lender and a loan modification provider for lack of jurisdiction on timeliness grounds in a lawsuit stemming from the sale of her home via foreclosure while she was in bankruptcy proceedings.
September 21, 2023
Oklahoma Supreme Court Partially Reverses Judgment In Wrongful Foreclosure Case

OKLAHOMA CITY — The Oklahoma Supreme Court reversed a trial court’s wrongful foreclosure judgment in favor of the borrower because the bank did not dismiss its prior foreclosure action against the borrower with prejudice as was required for the borrower to allege a claim for wrongful foreclosure.
September 21, 2023
Federal Judge Grants Summary Judgment, Affirming Bank’s Authority To Foreclose

BOSTON — A federal judge in Massachusetts granted a motion for summary judgment filed by two banks and a loan servicing company because one of the banks offered evidence showing that, contrary to a borrower’s complaint, it had the authority to foreclose on his property.
September 21, 2023
Illinois Panel Affirms Dismissal Of Suit Claiming Reverse Mortgage Fraud

CHICAGO — An Illinois appeals court affirmed a lower court’s ruling to dismiss a complaint filed by three borrowers who allege that a lender fraudulently took their homes in a reverse mortgage scheme because the claims are barred by the state’s statute of limitations.
September 21, 2023
Hispanic Workers’ Claims Of Bias Against Wells Fargo Stayed In Federal Court

SAN ANTONIO — A federal judge in Texas compelled arbitration individually staying claims for 16 of 17 plaintiffs who filed an amended class action against Wells Fargo Bank N.A. alleging that the bank forces its employees to offer predatory mortgage lending options to Spanish-speaking customers and excludes members of a bilingual team from opportunities within the company.
September 20, 2023
Mortgage Servicer Removes Class Complaint Claiming Inaccurate Credit Reporting

CHICAGO — A mortgage servicer has removed to a federal court in Illinois a borrower’s putative class complaint alleging that it supplied incorrect payment history information to consumer credit reporting agencies (CRAs), asserting federal question jurisdiction and standing under Article III of the U.S. Constitution.
September 20, 2023
Federal Judge Approves Class Settlement In Pay-To-Pay Mortgage Fees Case

WHEELING, W.Va. — A federal judge in West Virginia granted a motion seeking final approval of a $910,000 settlement in a class action alleging that a bank illegally charged hundreds of borrowers convenience fees to pay their monthly mortgage payments online or by telephone in violation of the West Virginia Consumer Credit and Protection Act (WVCCPA).
September 20, 2023
Lender Waives Right To Respond To Cert Petition In FCA Suit Over Mortgage Fraud

WASHINGTON, D.C. — A mortgage lender on Sept. 19 waived its right to respond to a relator’s petition for a writ of certiorari with the U.S. Supreme Court, seeking review and reversal of the Seventh Circuit U.S. Court of Appeals’ decision upholding a lower court’s grant of summary judgment for the lender in the relator’s False Claims Act (FCA) suit alleging that the lender made false representations to the U.S. Department of Housing and Urban Development.
September 19, 2023
Borrowers Allege In Class Action That Lender Wrongfully Denied, Shorted COVID-19 Aid

PHILADELPHIA — Borrowers filed a class action complaint in federal court in Pennsylvania alleging that their lender violated state and federal statutes when it denied some borrowers COVID-19 aid and approved only a portion of the aid for others claiming to be eligible for more funding.
September 18, 2023
Government Urges High Court To Uphold ‘Bedrock Principle’ Of Chevron Deference

WASHINGTON, D.C. — The U.S. secretary of Commerce, two National Oceanic and Atmospheric Administration (NOAA) officials and the National Marine Fisheries Service (NMFS) (collectively, the government) urge the U.S. Supreme Court in a Sept. 15 brief to not overrule the doctrine of Chevron deference in a challenge to fishery regulations that were upheld by the District of Columbia Circuit U.S. Court of Appeals, writing that doing so could “cause disruption” to complex federal regulatory schemes.
September 18, 2023
Class Certified In Suit Alleging Illegal Kickbacks And Scheme To Defraud Borrowers

BALTIMORE — A federal judge in Maryland certified a class of borrowers and two subclasses of borrowers, finding that a lender’s argument that some of the class did not endure financial losses failed to “undermine the predominance of common legal and factual issues” in the case alleging that the lender engaged in both an illegal kickback agreement with its title and settlement company and a related plan to defraud borrowers on more than 750 loans into paying made-up charges for title and settlement services.
September 14, 2023
Bank’s Motion To Dismiss Rejected In Part; Claims Handling Violations Alleged

DAYTON, Ohio — A federal judge in Ohio set a settlement conference after denying part of a bank’s motion to dismiss and ruling that two borrowers adequately stated their claim that the bank violated the Real Estate Settlement Procedures Act (RESPA) by failing to sufficiently address one out of three alleged errors in loan modification paperwork.
September 14, 2023
Most Counts Stand, 1 Dismissed In RESPA Case Alleging Mortgage Servicer Erred

BALTIMORE — A federal magistrate judge in Maryland dismissed a claim alleging that a mortgage servicer violated the Real Estate Settlement Procedures Act (RESPA) by failing to offer all applicable loss mitigation options, ruling that the mortgage servicer had the discretion to choose which loan modification option it offered, but the judge allowed the remaining RESPA and state law claims to stand, ruling that the borrowers sufficiently stated their claims that the servicer failed to adequately respond to their letter reporting errors and seeking payment history information.
September 12, 2023
Florida Panel Finds Trial Court ‘Exceeded Its Authority’ In Foreclosure Case

WEST PALM BEACH, Fla. — A Florida appeals panel affirmed a trial court’s ruling that denied a bank’s attempt to foreclose on a home but reversed the portion of the trial court’s ruling that established terms of the mortgage repayment because the trial court exceeded its authority in creating a resolution for the past-due payments.
September 12, 2023
Federal Judge Rejects Bank’s Motion To Dismiss RESPA Case Alleging Vicarious Liability

COEUR D’ALENE, Idaho — A federal judge in Idaho denied a bank’s motion to dismiss a complaint alleging violations of the Real Estate Settlement Procedures Act (RESPA) and ruled that as the master servicer of a homeowner’s loan, the bank can plausibly be held liable for the actions of its subservicer.
September 08, 2023
Massachusetts Appeals Court OKs Home Foreclosure, Says Bank Effort ‘Reasonable’

BOSTON — The Massachusetts Appeals Court affirmed a housing court’s judgment allowing a home foreclosure by Wells Fargo Bank N.A. to stand on the ground that the bank made “reasonable efforts” to contact the homeowner in keeping with regulatory requirements of loans guaranteed by the U.S. Department of Veterans Affairs (VA).
September 07, 2023
Solicitor General Asks High Court Not To Hear National Bank Act Preemption Cases

WASHINGTON D.C. — The U.S. solicitor general urged the Supreme Court in an amicus curiae brief to deny petitions for writs of certiorari on the grounds that lower courts failed to apply the proper assessment of the degree to which the National Bank Act (NBA) preempts state laws in two unrelated appeals regarding whether lenders are required to pay interest on mortgage escrow accounts.
August 29, 2023
Judge: Borrower Can Amend Suit Against Bank For Notice Of Default During COVID

SAN FRANCISCO — A California federal judge on Aug. 28 refused to dismiss a borrower’s claim for violation of California’s unfair competition law (UCL) against her bank for causing a notice of default on her loan while her application for loan assistance filed during the coronavirus pandemic was pending, dismissed her claim for violation of Real Estate Settlement Procedures Act (RESPA) regulations and granted her leave to amend.
August 25, 2023
Wells Fargo Asks Federal Court To Toss Case Alleging Profits Off Rate Lock Fees

SAN FRANCISCO — Wells Fargo moved to dismiss a proposed class complaint filed in a California federal court alleging that the bank wrongly charged borrowers rate lock extension fees and admitted its misconduct by voluntarily refunding its customers but profited “in the billions of dollars” through investments of the money collected through the fees.