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

Mealey's Mortgage Lending

August 24, 2023
Lender To 7th Circuit: ECOA Discrimination Protection Not For Prospective Borrowers

CHICAGO — A lending and consulting company and its owner argue that discrimination protection of the Equal Credit Opportunity Act (ECOA) does not extend to prospective borrowers in urging the Seventh Circuit U.S. Court of Appeals to affirm a lower court’s dismissal of the Consumer Financial Protection Bureau’s complaint against them.
August 24, 2023
Appraisal Bias Case Against Lender, Appraiser And Appraiser Counterclaims Continue

BALTIMORE — A federal judge in Maryland declined to dismiss Black homeowners’ claims alleging that a mortgage lender and property appraiser violated several provisions of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) by undervaluing their home based on their race and by denying a mortgage refinancing application based on that appraisal, but the judge also declined to dismiss the appraiser’s defamation and false light invasion of privacy counterclaims against the homeowners.
August 24, 2023
Homeowner Alleges In Class Action Suit That Lender Unjustly Denied COVID-19 Aid

ALLENTOWN, Pa. — A homeowner filed a class action in Pennsylvania federal court alleging violations of federal statutes and the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) when a lender denied him a COVID-19 loss mitigation option on the ground that it would not have reduced the principal and interest portions of his Federal Housing Administration (FHA) mortgage.
August 24, 2023
Homeowner Opposes Bank Of America’s Motion To Dismiss Pay-To-Pay Class Action Suit

CHARLESTON, W.Va. — A homeowner who filed a federal class action suit against Bank of America N.A. (BANA) after the company began charging her a fee to pay her mortgage over the phone responded to a motion to dismiss with allegations that the bank violated West Virginia state and federal laws in charging fees not permitted by mortgage agreements or statutes.
August 24, 2023
7th Circuit: Omission Of Credit Report Material Info Actionable Under FCRA

CHICAGO — The Seventh Circuit U.S. Court of Appeals disagreed with a lower court’s ruling that credit reporting agency Experian Information Solutions Inc. was immune from liability in reporting a borrower’s mortgage as delinquent, maintaining that Experian’s omission of a related payment agreement between the lender and borrower is actionable under the Fair Credit Reporting Act (FCRA).
August 24, 2023
Federal Judge In California Dismisses Foreclosure Suit Citing Statute Of Limitations

CONCORD, Calif. — A federal judge in California dismissed a homeowners’ lawsuit but allowed them to amend their complaint that alleged that a mortgage loan servicer violated several state and federal statutes when it foreclosed on the homeowners’ property.
August 24, 2023
7th Circuit: County Cannot Recover Under FHA For Banks’ Predatory Lending

CHICAGO — The Seventh Circuit U.S. Court of Appeals ruled that a county in Illinois that says it was injured by a bank’s predatory loan practices because of vacant homes, diminished home values and lost tax revenue is not entitled to relief under the Fair Housing Act (FHA) because the county “did not suffer ‘first-tier injuries’.”
August 24, 2023
Class Certified In Suit Alleging Borrowers Were Illegally Charged For Inspections

GREENBELT, Md. — A federal judge in Maryland granted class certification to a homeowner, finding that she adequately made her case to represent at least 100 borrowers in a suit alleging that a mortgage servicer violated several state laws when it charged inspection fees to delinquent borrowers even after signing a memorandum of understanding in another case to prevent such fees.
August 24, 2023
Borrower To Appeal Decision By Judge To Let Dismissal Stand In Loan Denial Case

BATON ROUGE, La. — A borrower has filed a notice of appeal in his lawsuit alleging that a lender violated the Equal Credit Opportunity Act (ECOA) by denying him a mortgage loan based on an allegedly incomplete loan application after a federal judge in Louisiana denied his motion to reconsider the dismissal of his claims with prejudice.
August 23, 2023
Borrower Seeks Extension To Object To R&R After Judge Adopts It, Dismissing

ATLANTA — Noting that a borrower’s request for an extension of time to object to a magistrate judge’s order and final report and recommendation (O&R) that his second amended complaint alleging wrongful foreclosure should be dismissed is untimely, the lenders tell a Georgia federal court that it is also moot because the request was filed four days after the judge adopted the magistrate’s report.
August 17, 2023
UBS To Pay $1.43 Billion In Residential Mortgage-Backed Securities Settlement

BROOKLYN, N.Y. — Swiss bank UBS AG and some of its U.S.-based affiliates agreed to pay $1,435,000,000 in civil penalties to settle a civil suit alleging fraud linked to the underwriting and issuance of residential mortgage-backed securities (RMBS), the U.S. Department of Justice (DOJ) announced.
August 16, 2023
USDA To High Court: FCRA Does Not Waive Government’s Sovereign Immunity

WASHINGTON, D.C. — A waiver of sovereign immunity requires “clear statutory language,” and the general remedial provisions of the Fair Credit Reporting Act (FCRA) do not contain such a waiver, the U.S. Department of Agriculture tells the U.S. Supreme Court in an Aug. 15 petitioner brief challenging a Third Circuit U.S. Court of Appeals ruling allowing a borrower to sue the department for allegedly misreporting that he was past due in his mortgage loan payments.
August 11, 2023
Borrower Asks For Reconsideration Of Dismissal Against Mortgage Servicer

PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel improperly found that res judicata applied to quiet title claims, a borrower argues in his motion for reconsideration of the dismissal of his complaint, further asserting that the appellate court erred in finding that his claims were barred by statutes of limitations.
August 11, 2023
Federal Jury Awards Mortgage Servicing Company $22M For Dispute Over Owed Funds

NEWARK, N.J. — A jury in a New Jersey federal court returned a verdict in a dispute over who was entitled to funds after a mortgage lender ended a long-standing servicing agreement with another company, finding that the servicing company was entitled to more than $22 million on its fraud and conversion claims while awarding the lender $247,000 for breach of contract.
August 10, 2023
Federal Judge Adopts Recommendation To Dismiss RICO Claim Against Wells Fargo

NEW YORK — A New York federal judge adopted a report and recommendation from a magistrate judge and dismissed a complaint alleging that a lender violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by engaging in a racketeering scheme during a mortgage foreclosure action for failure to state a claim.
August 08, 2023
Dismissal Affirmed By Nevada Court In Mediation Decision For Foreclosure

LAS VEGAS — A Nevada appeals court affirmed a lower court’s dismissal of a request for appropriate relief in a foreclosure mediation matter in a long-running case, finding that the lender complied with all of Nevada's Foreclosure Mediation Program (FMP) requirements.
August 04, 2023
Louisiana Panel Reverses Ruling For Insurer In Suit Alleging Insured Stole Files

BATON ROUGE, La. — A Louisiana appeals panel held that a residential mortgage broker’s electronic loan files are “tangible” under state law and, therefore, can be defined as “‘property’ that is susceptible to ‘loss of use’” under a competitor’s business liability insurance policy, reversing a summary judgment ruling in favor of an insurer that intervened in the broker’s lawsuit alleging that its insured used stolen files to broker mortgage loans for its customers.
August 04, 2023
Judge: Lender’s Motion To Dismiss Granted But Borrower Can Amend TILA Claims

PHOENIX — An Arizona federal judge granted a lender’s motion to dismiss but allowed a borrower to amend his complaint that alleges that the lender purports to offer home equity lines of credit (HELOCs) but in fact offers home equity loans.
August 03, 2023
4th Complaint Fighting Foreclosure Again Dismissed On Res Judicata Grounds

ATLANTA — A federal magistrate judge in Georgia recommended that a motion to dismiss a lawsuit filed by a pro se borrower asserting the same claims against a mortgage servicer and a bank over the foreclosure of her home that were made in three previously dismissed cases be granted and the case be dismissed with prejudice.
July 31, 2023
Maryland Court: Mortgage Servicer Entitled To Portion Of Fire Insurance Proceeds

BALTIMORE — A lower court in Maryland erred in awarding the full proceeds of a fire insurance policy to the estate of a man killed in a house fire, a state appeals court ruled, finding that the mortgage loan servicer was entitled to a portion.
July 26, 2023
6th Circuit: Dismissal Of Suit On Effort To Assume, Modify Mortgage Proper

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on July 25 held that a widow’s claims were properly dismissed in her suit against a bank and debt collector regarding her attempts to assume and modify her late husband’s mortgage and rejected her argument that the district court judge should have been recused.
July 26, 2023
10th Circuit: Dismissal Of Suit Against Lender Affirmed, State Law Inapplicable

DENVER — The 10th Circuit U.S. Court of Appeals affirmed that mortgagors cannot sue a mortgage loan servicer for charging borrowers pay-to-pay convenience fees for making mortgage payments by telephone under the Utah Consumer Sales Practices Act (UCSPA) and denied a borrower’s request to certify questions on the act’s scope to the state Supreme Court.
July 21, 2023
Magistrate: Dismissal Of Amended Complaint Alleging Wrongful Foreclosure Proper

ATLANTA — A federal magistrate judge in Georgia recommended dismissal of a borrower’s second amended complaint after finding that he failed to cure deficiencies in his wrongful foreclosure claim against a mortgage servicer.
July 21, 2023
Borrowers Appeal Summary Judgment Award To Loan Servicers To 10th Circuit

DENVER — Two borrowers filed an appeal in the 10th Circuit U.S. Court of Appeals a day after a Kansas federal court awarded summary judgment to their loan servicers after finding that the claims for violations of the Kansas Consumer Protection Act (KCPA) and the Real Estate Settlement Procedures Act (RESPA) fail.
July 20, 2023
3rd Circuit Affirms Dismissal In Quiet Title Claim Against Mortgage Servicer

PHILADELPHIA — The Third Circuit U.S. Court of Appeals found no error in a lower court’s decision to dismiss a complaint alleging that a bank had no claim to a mortgage in a foreclosure proceeding, agreeing that a borrower’s claims are barred under res judicata and statutes of limitations.