Tag Archives: stay foreclosure

Tennessee Court Dismisses TILA, RICO, and RESPA Claims

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The Tennessee court in deciding Mhoon v. United States Bank Home Mortg., 2013 U.S. Dist. (W.D. Tenn., 2013) dismissed the complaint of the plaintiff pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii).

Plaintiff [Mhoon] filed a complaint against defendant U.S. Bank. This case was an action to prohibit a non-judicial foreclosure of real property. The complaint alleged that U.S. Bank was engaged in efforts to illegally foreclosure on Mhoon’s home. The complaint also alleged that U.S. Bank acted with gross negligence and violated its duty of good faith.

In addition, the complaint alleged breach of contract because U.S. Bank failed to send any and all acceleration, default, and foreclosure notices to Mhoon in the manner required by the deed of trust.

The complaint further alleged U.S. Bank violated Truth in Lending Act (“TILA”); violated Real Estate Settlement Procedures Act (“RESPA”) by failing to provide a good faith estimate; violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) statute and engaged in fraud; and lacked standing to initiate foreclosure proceedings on the Property.

The court ultimately held (1) plaintiff has not sufficiently plead a breach of contract claim; (2) plaintiff’s claims for gross negligence and violation of the duty of good faith fail as a matter of law; (3) plaintiff’s allegations based on violations of the TILA and the RESPA were barred by the applicable statute of limitations and failed to state a claim because U.S. Bank was not the originating lender; and (4) plaintiff’s claims for fraud violations of the RICO, and lack of standing all failed as a matter of law.

For those reasons, this court dismissed the plaintiff’s complaint pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii).

Ohio Court Reverses Summary Judgment in Favor of HSBC Bank

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The court in deciding HSBC Bank USA v. Teagarden, 2013-Ohio-5816 (Ohio Ct. App., Trumbull County, 2013) reversed the ruling for summary judgment in favor of HSBC Bank.

Defendants-appellants, [Teagardens], appealed two judgment entries from the lower court, dismissing the Teagardens’ counterclaims and granting summary judgment in favor of plaintiff-appellee, HSBC Bank USA, National Trust Company.

The first issue before this court was whether the original lender may be a debt collector for the purposes of the Fair Debt Collection Practices Act (FDCPA) when the debt is assigned to a third party. The remaining issues were: whether the one-year statute of limitations for FDCPA actions precluded claims based on false affidavits filed in a prior foreclosure action; whether there is justifiable reliance on false affidavits to support a fraudulent misrepresentation claim when the veracity of the affidavits were contested; whether the failure to comply with federal mortgage servicing guidelines may sustain a cause of action for breach of contract; whether the term “branch office” as used in federal regulations refers only to offices with qualified mortgage servicing personnel; and whether actual damages are a necessary element to state a valid claim for a violation of the Real Estate Settlement Procedures Act (RESPA).

This court found that the original lender of a mortgage debt was not a debt collector under 15 U.S.C.S. § 1692a(6) or liable under the FDCPA, even though it had transferred the debt to a transferee and subsequently attempted to collect the debt on behalf of the transferee.

The court noted that the original lender consistently dealt with the debtors in entities using its name and the debtors did not allege that they believed these entities were third parties, independent of the original lenders. The court found that the debtors’ claim that the original lender misrepresented that it was the holder of the loan when it was the mortgage servicer did not raise a reasonable inference that it used a false name to create the impression that another party was attempting to collect the debt. The also found that the debtors’ claim against the transferee was based on actions that were time-barred under 15 U.S.C.S. § 1692k(d); the claims based on the underlying fees and costs were also time-barred.

Accordingly, this court affirmed the lower court’s dismissal of the Teagardens’ counterclaims. This court also reversed the lower court’s entry of summary judgment in favor of HSBC Bank on the note.

 

Ohio Court Decides Bank’s Possession of Note was Properly Shown

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The court in deciding M & T Bank v. Strawn, 2013-Ohio-5845 (Ohio Ct. App., Trumbull County, 2013) ultimately affirmed the lower court’s decision.

The court decided that the bank’s possession of the note was shown by the affidavit, along with attached copies of the note endorsed to the bank, and the court found that one in possession of a note endorsed to that party was a holder, for purposes of R.C. 1301.201(B)(21)(a). As such the court decided that the bank was thus entitled to enforce the instrument under R.C. 1303.31.

The court found that the affidavit for the bank clearly stated that the bank had been in possession of the original promissory note, and the affidavit was sufficient for the lower court to have held that the affiant had personal knowledge. The court further noted that nothing suggested that voided endorsements affected the bank’s status as a holder, and thus it did not create an issue of fact.

Lastly the court found that the bank acquired an equitable interest in the mortgage when it became a holder of the note, regardless of whether the mortgage was actually or validly assigned or delivered. Based on these conclusions this court affirmed the lower court’s judgment.

United States District Court Dismisses RICO and FDCPA Claims

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The court in deciding Koenig v. Bank of Am., N.A., 2013 U.S. Dist. (E.D. Cal., 2013) ultimately granted the defendant’s motion to dismiss.

Plaintiff Philip A. Koenig commenced this action against defendant Bank of America. Plaintiff alleged causes of action for violations of the Fair Debt Collections Practices Act (“FDCPA”) and the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Plaintiff also brought claim requesting declaratory relief against the defendant. Defendant filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). After considering the arguments, the court granted the defendant’s motion to dismiss.

The theory underlying the totality of plaintiff’s complaint was that defendant had no right to affect foreclosure on the property. The second cause of action was a request for declaratory relief. Plaintiff sought a declaration from the court indicating that the defendant did not have and had never had any interest in the property.

Plaintiff alleged that the entity that intended to foreclose on the property was not the lender that originated any mortgage and was not an assignee of any mortgagee or a duly appointed trustee, thus the entity lacked the legal authority to foreclose.

After consider the plaintiff’s arguments, the court rejected them and granted the defendant’s motion to dismiss.

Kansas Court of Appeals Finds that Wells Fargo’s Possession of Signed Promissory Note was Sufficient to Enforce and Foreclose

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The court in deciding Wells Fargo Bank, N.A. v. Richards, 2013 Kan. App. 1160 (Kan. Ct. App. 2013) affirmed the lower court’s decision finding that Wells Fargo had standing to bring foreclosure action.

On January 25, 2013, the lower court filed its journal entry of judgment and dismissal, finding that defendant Richards had failed to controvert any of Wells Fargo’s allegations. The lower court found that Wells Fargo was holder of the note and mortgage; Richards was in default and Wells Fargo was entitled to judgment on the note and to foreclose the mortgage. The court reaffirmed its previous dismissal of Richards’ counterclaim, finding the “points, claims, and arguments” to be without merit.

Defendant, in this appeal, asserted five claims, (1) Wells Fargo lacked standing to bring the foreclosure action; (2) the district court erred in holding Wells Fargo’s possession of the promissory note he signed was insufficient to enforce and foreclose the mortgage it secures; (3) Wells Fargo did not experience/suffer a default; (4) there was no contract because the note and mortgage were split; and (5) that there was lack of due process.

The court examined the record and considered the arguments of the parties. After the consideration, the court held that there was no merit to any of defendant Richards’ arguments. Consequently, the court affirmed the lower court’s decision.

Illinois Court of Appeals Upholds Lower Court Decision Finding that Wells Fargo had Standing to Foreclose

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The court in deciding Wells Fargo Bank, N.A. v. Abatangelo, 2013 IL App (1st) 130423-U (Ill. App. Ct. 1st Dist. 2013) that Wells Fargo had standing to foreclose the mortgage.

Defendant, Peter Abatangelo, appealed the order of the circuit court granting summary judgment in favor of plaintiff, Wells Fargo Bank, on plaintiff’s foreclosure complaint. On appeal, Mr. Abatangelo contended that the court erred in granting summary judgment because (1) the mortgage contract did not properly assign the right to foreclose to Wells Fargo; and (2) the trial court improperly considered new arguments raised by Wells Fargo for the first time in a reply brief in support of their motion to dismiss.

After considering the defendant’s contentions the court ultimately affirmed the lower court’s ruling.

United States District Court for the District of Columbia Dismisses Case Due to Lack of Jurisdiction

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The court in deciding Glaviano v. JP Morgan Chase Bank, N.A., 2013 U.S. Dist. 180582 (D.D.C. Dec. 27, 2013) dismissed the plaintiff’s claim due to lack of jurisdiction.

Plaintiffs alleged that the defendants did not have “possession of the note” or a “documented property interest in the note and mortgage or deed of trust.” Plaintiff also alleged that the “deed of trust was void and ineffective due to fraud,” and that the trustee’s foreclosure sale was “void because the alleged beneficiary . . . never had standing to substitute the trustee.” They further claimed that the sale of their property at a foreclosure sale violated their due process rights under the U.S. Constitution. Based on these allegations, plaintiff sought an injunction against the foreclosure sale.

The court considered the plaintiff’s argument and found that the court lacked jurisdiction, as such the case must be dismissed. Because the plaintiff sought the equivalent of appellate review of state court rulings, the district court dismissed the suit for lack of jurisdiction under Rooker-Feldman. The court found that plaintiffs in this case also asked the federal district court to review state court rulings.

Accordingly, the complaint was dismissed for lack of jurisdiction and the motion for injunction was denied as moot due to dismissal of the case.