Tag Archives: mortgage

Maryland Court Denies Claim Alleging Violations of Federal and State Consumer Laws

Posted on by

The court in deciding Bolden v. McCabe, Weisberg & Conway, LLC, 2013 U.S. Dist., 182057 (D. Md. 2013) granted defendant’s motion to dismiss and denied plaintiff’s motion for summary judgment.

Plaintiff in bringing this action alleged violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law, § 14-201 et seq., and the Maryland Consumer Protection Act (“MCPA”), Md. Code Ann., Com. Law § 13-101 et seq.

After considering the plaintiff’s arguments, the court found that the sparse factual allegations in the complaint could not sustain the claims, as such the court granted defendant’s motion to dismiss and plaintiff’s motion for summary judgment was denied.

Minnesota Court Rejects Tweaked Version of Show-Me-the-Note Claim

Posted on by

The court in deciding Mutua v. Deutsche Bank Nat’l Trust Co., 2013 Minn. Dist. 65 (Minn. Dist. Ct. 2013) found that since the defendant had a valid legal title to plaintiffs’ mortgage. Plaintiffs had failed to state a claim against either defendant and their respective motions to dismiss are granted.

This Court reasoned that there was a valid assignment of plaintiffs’ mortgages to defendant which gave defendant legal title to the mortgages and allowed Defendant to foreclose on plaintiffs’ properties.

The court noted that both the Minnesota Supreme Court and the United States Court of Appeals for the Eighth Circuit had rejected the legal theory, which has become known as “show-me-the-note,” advanced by plaintiffs.

In the present action, the court noted that plaintiffs merely tweaked this legal theory and argued that based on the language of the plaintiffs’ mortgage and note, an entity different from defendant Deutsche Bank National Trust Company had the legal right to foreclose on plaintiffs’ homes. This argument was rejected.

Washington Court Dismisses Fair Debt Collection Practices Act and Washington Deed of Trust Act Violation Claims

Posted on by

The court in deciding Dietz v. Quality Loan Serv. Corp., 2014 U.S. Dist. (W.D. Wash. Jan. 3, 2014) granted Wells Fargo and MERS’ motion to dismiss.

This action involved is a post-sale wrongful foreclosure case. Plaintiff Timothy Dietz alleged causes of action for violation of the Fair Debt Collection Practices Act (FDCPA)(Counts I and IV) and violation of the Washington Deed of Trust Act (DTA)(Counts II and III).

The court in deciding this case noted that Dietz’s first and fourth causes of action were for violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692g(b) and 1692e(5) respectively. These causes of action did not mention MERS  and there was no allegation in the complaint that MERS engaged in any activities that could be construed as a “debt collection.” As such, this court dismissed the FDCPA causes of action against MERS.

Similarly, the court found that Dietz had not alleged facts that gave rise to a violation of the debt validation notice requirements. Dietz’s claim that that Wells Fargo violated 15 U.S.C. § 1641(g) by failing to notify him within 30 days after it purchased the Loan. Wells Fargo purchased the Loan in 2008 and the assignment was recorded in 2011. The court found that under either date, the claim was barred by FDCPA‘s one year statute of limitations, 15 U.S.C. § 1640(e), as this lawsuit was not filed until 2013.

Ohio Court of Appeals Finds that BAC had Failed to Demonstrate that it had Standing to Accelerate the Note and Foreclose the Mortgage

Posted on by

The court in deciding BAC Home Loans Servicing, L.P. v. Blythe, 2013-Ohio-5775 (Ohio Ct. App., Columbiana County, 2013) reversed the lower court’s judgment.

Appellant Walter J. Blythe appealed the lower court’s decision granting summary judgment in favor of Appellee, BAC Home Loans Servicing, L.P., in this foreclosure action.

Blythe challenged the lower court’s finding that BAC Home Loans Servicing had standing to foreclose in the absence of evidence that BAC was the holder of the note creating the obligation. Blythe relied on the material submitted by BAC in support of this claim. Because the copy of the note filed by BAC was specifically indorsed to Countrywide Bank, FSB, not BAC, and there was nothing to indicate otherwise, BAC had failed to demonstrate that it had standing to accelerate the note and foreclose the mortgage. Thus this court reversed the judgment of the lower court and dismissed the suit for lack of standing.

This court held that a note that had been specially indorsed to a bank under R.C. 1303.25(A) could not be enforced by a loan servicing company (LSC) that was not the transferee or successor in interest of the bank. This court also held that the LSC was not the holder of the note under R.C. 1303.32(A)(1) by virtue of the merger of the bank and a national association (NA). Further, the LSC was not a non-holder in possession entitled to enforce under R.C. 1303.31 as it had not acquired the bank’s right to the note under R.C. 1303.21.

This court noted that even if the NA had filed the foreclosure suit, there was no evidence of the transaction, merger, or mergers that gave rise to an its interest in the note. Lastly, the court held that the note was not bearer paper and could only be enforced by the bank since the note was payable to the bank, as such the bank was the real party in interest in the foreclosure action. Thus the LSC lacked standing to foreclose.

Reiss on Paying off Underwater Mortgages

Posted on by

MainStreet.com quoted me in What Bills Should You Pay First? It reads in part,

Consumers started prioritizing their mortgage payments ahead of their credit card payments as of September 2013, according to a new TransUnion study.

This reverses a trend that began in September 2008 when the mortgage crisis drove consumers to pay their credit cards bills ahead of mortgages. Consumers have placed an emphasis on paying their auto loans before their mortgages and credit card payments by a wide margin – since at least 2003, TransUnion said. The study obtained anonymous consumer information from December 2002 through December 2012, and each monthly sample included about 2.5 million consumers.

*     *     *

Many consumers were faced with devaluing home prices and chose to preserve their credit line, said David Reiss, professor of law at Brooklyn Law School in New York.

“The underwater mortgage may have seemed like a sinkhole when prices were dropping and putting limited funds into it might have seemed like throwing good money after bad,” he said. “When a household’s income can’t cover all of its expenses, it has to prioritize its payments. If the mortgage is underwater, it may make sense to use those limited funds to protect assets that are integral to daily living and wage earning like an auto or to focus on tools like credit cards that may have some use going forward, if there is still any available credit left.”

Homeowners have reversed that logic with the rebound of housing prices, Reiss said.”If homeowners have equity in their home from those rising prices, prioritizing the mortgage protects that equity and keeps the household in the house to boot,” he said. “Not everyone makes such a calculation, but many do.”

Appellate Court of Illinois Awarded Summary Judgment to Plaintiff Where Defendant Failed to Show That Plaintiff was an Unlicensed Debt Collector Under the Collection Agency Act

Posted on by

The Illinois court in deciding Kondaur Capital Corp. v. Sreenan, 2013 Ill. App. (Ill. App. Ct. 1st Dist. 2013) affirmed the judgment of the circuit court granting summary judgment for the plaintiff.

In the summary judgment motion, the plaintiff asserted that it was the legal holder and in possession of the note at issue pursuant to the assignment from PNC.

The court held that the circuit court did not err in awarding summary judgment to the plaintiff where the defendant failed to demonstrate that the plaintiff was an unlicensed debt collector under the Collection Agency Act (225 ILCS 425/1 et seq.).

The court also held that there was no abuse of discretion in refusing to strike affidavits in support of the plaintiff’s motion for summary judgment where the affidavits were premised upon documents that qualified as “business records” under Supreme Court Rule 236 (Ill. S. Ct. R. 236).

Lastly, the court held that any error in allowing the plaintiff to respond to the defendant’s affirmative defenses in the context of the plaintiff’s summary judgment motion was harmless.

Appellate Court of Illinois Denies Defendants’ Motion for Presentment and Cause to Vacate Judgment was Misplaced and Had no Legal Significance

Posted on by

The Appellate Court of Illinois in deciding Deutsche Bank Nat’l Trust Co. v. Cole, 2013 IL App (2d) 130450-U (Ill. App. Ct. 2d Dist. 2013) held that the trial court properly confirmed a judicial sale, as the plaintiff had no obligation to produce the originals of the mortgage and the note. Moreover under the appropriate standard, the court had subject-matter jurisdiction, and defendant failed to cogently explain plaintiff’s alleged lack of standing.

Lorie Cole, one of two property-owner defendants in a foreclosure action, appealed to this court after the confirmation of the judicial sale of the property and the denial of what the trial court treated as a motion to reconsider. This court, after considering the Cole’s appeal found that all of the issues that defendant Cole had raised were without merit, thus this court affirmed the decision of the lower court.