News & Analysis as of

Minnesota Supreme Court Recognizes New Private Right Of Action Against Residential Mortgage Loan Servicers

On April 2, 2014, the Minnesota Supreme Court in Gretsch v. Vantium Capital, Inc. recognized a new private right of action against residential mortgage loan servicers who breach their servicer participation agreements with...more

Arizona Court of Appeals Holds That Certain Residential Developers Are Not Protected By The Anti-Deficiency Statute After...

Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute protects a borrower who started, but never completed, construction of a single-family...more

Alabama Federal Court Ruling May Enable Borrowers with Tenants To Challenge Foreclosures

A recent decision from the U.S. District Court for the Northern District of Alabama may provide borrowers who rent portions of their property to tenants with an avenue for challenging a foreclosure. The court's analysis...more

CFPB and State Regulators Take Enforcement Action for Alleged UDAAP Violations

The CFPB announced an enforcement action against a nonbank mortgage lender and its mortgage servicer alleging the companies engaged in unfair, deceptive and abusive acts or practices in violation of the Consumer Financial...more

Massachusetts Amends Debt Collector and Third-Party Loan Servicer Regulations

The Massachusetts Division of Banks recently amended 209 CMR 18, "Conduct of the Business of Debt Collectors and Loan Servicers." The final amended regulations clarify and establish new standards of conduct for debt...more

New California Court of Appeal Decision Reaffirms General Rule that Residential Lenders Owe no Duty to Borrowers, Including in the...

In a recent decision, Lueras v. BAC Home Loans Servicing, LP, 2013 Cal. App. LEXIS 886, the California Court of Appeal returned to the general rule that, absent unique circumstances giving rise to a duty of care, lenders do...more

Prospective Waivers of the Fair Market Value Defense Held Invalid

The Arizona Court of Appeals recently held that commercial borrowers and guarantors cannot prospectively waive their right to limit their damages in a deficiency action on the basis of the fair market value of property sold...more

Litigation Exposure Under The 2013 Dodd-Frank Mortgage Servicing Regulations

In This Issue: - Introduction - Potential Litigation Exposure Under the New Mortgage Servicing Regulations Governing Responses to Borrower Inquiries ..Which of the New Servicing Regulations Governing Responses...more

HUD Updates Foreclosure Procedures, Pre-Foreclosure Borrower Communication Policies

On October 28, HUD issued two mortgagee letters related to the servicing of certain FHA-insured loans. Mortgagee Letter 2013-38 provides a list of the first legal actions necessary to initiate a foreclosure and the reasonable...more

The Demise of Deficiency Judgments in Residential Loans

Among the many changes in the financial services industry, two important events occurred this year that effectively signaled the extinction of deficiency judgments in loans secured by residential property. ...more

Borrower Must File Suit before Foreclosure To Exercise Rescission Rights, Eighth Circuit Holds

The Eighth Circuit recently held that a borrower must file suit before foreclosure to exercise rescission rights under TILA. The court now joins the Ninth and Tenth Circuits in holding that notice alone is not sufficient. In...more

Arizona’s Broad Anti-Deficiency Protection Confirmed

The non-judicial foreclosure process affords banks and lenders a relatively “cheap” means of executing on their collateral in the event of a borrower’s defaults. That cheaper process comes at a price, however. Arizona has a...more

Another Case of Housing Whiplash in Nevada: New Homeowner Bill of Rights and Revisions to the Foreclosure Mediation Program

Nevada’s Homeowner Bill of Rights is expected to throw another sharp curve into the state’s troubled housing market. The new law, which took effect last week, places more restrictions on the exercise of the power of sale....more

California Appellate Court Holds Lender Failed to Follow HAMP Procedures

The California Court of Appeal reversed a lower’s court’s dismissal of a lawsuit by a borrower alleging that her lender breached an agreement to offer a permanent loan modification after she made all required payments under a...more

Rogers Towers: Discovery of Loss-Share Payments in Litigation: Irrelevant

In foreclosure actions based on assets of a failed bank, borrowers sometimes attempt to discover whether and how much the FDIC has reimbursed the acquiring institution for its loss under the loan....more

Eighth Circuit Extends Recent TILA Rescission Holding

On August 19, the U.S. Court of Appeals for the Eighth Circuit held that borrowers facing foreclosure were required to file suit prior to the foreclosure sale to complete the exercise of their right to rescind under TILA....more

Borrowers Have Standing to Challenge Void Assignments of Their Loans

A California Court of Appeal reversed a trial court’s decision and held that a borrower may sue a bank for wrongful foreclosure when an attempted transfer of loan to a securitized trust occurred after the trust’s closing...more

Eleventh Circuit Affirms TILA’s Safe Harbor Exception Applies To Servicer Seeking To Foreclose

On July 29, the U.S. Court of Appeals for the Eleventh Circuit held that a mortgage servicer moving to foreclose on borrowers pursuant to an assignment from the lender’s nominee was exempt from TILA’s debt ownership...more

California Appeals Court Holds Foreclosure Deficiency Judgment Protections Apply To Short Sales

On July 23, the California Court of Appeal, Fourth Appellate District, held in a case of first impression that a section of California law that prohibits a deficiency judgment following a foreclosure on a purchase money loan...more

An Overview of the Receivership Process in Tennessee

Lenders have a number of options when faced with a borrower in default. In Tennessee, one option to seriously consider is seeking appointment of a receiver. A receiver will step into the role of the borrower or management...more

Show-Me-The-Note v. Split-the-Note: An Overview of Rulings from the Fifth Circuit Court of Texas

In the case of Ashley Martins v. BAC Home Loans Servicing, L.P. and Federal National Mortgage Association (No. 12-20559, 2013 WL 3213633), the Fifth Circuit Court of Texas was first asked to decide whether the...more

Arizona’s Anti-deficiency Statute, A.R.S. 33-814(G), Cannot be Prospectively Waived Says the Court of Appeals

In Parkway Bank & Trust Co. v. Zivkovic, 662 Ariz. Adv. Rep. 26 (Ct. App. 2013), the Arizona Court of Appeals held that provisions in loan documents purporting to waive the applicability of A.R.S. § 33-814(G) violate Arizona...more

Illinois Extends Foreclosure Protections Sunset Provision

On June 20, Illinois enacted HB 99, which extends for three years the protections afforded borrowers in the Illinois Homeowner Protection Act....more

The Impact of Dual Tracking Restrictions on Foreclosure Rates in California

Foreclosure rates are declining in California. Many tout an improving economy as a reason for this trend. The impact of new legislation that restricts lenders and mortgage servicers from foreclosing on residential mortgages...more

Nevada Alters Foreclosure Mediation Program

Recently, Nevada enacted AB 273, which altered the state’s foreclosure mediation program to require a trustee under a deed of trust to send certain information concerning the foreclosure mediation program to a borrower...more

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