Secured Lenders

News & Analysis as of

Full Credit Bid Causes Loss of Insurance Proceeds

A recent case serves as a reminder of one of many risks posed by making a full credit bid at a foreclosure sale: the lender may lose the right to recover insurance proceeds for pre-foreclosure damage to the foreclosed...more

St. Louis County Ordinance Requiring Pre-Foreclosure Mediation Unconstitutional, Missouri Supreme Court Holds

The Missouri Supreme Court recently ruled that a St. Louis County ordinance requiring lenders to mediate with borrowers prior to foreclosure was void ab initio because it was not directed to a matter of purely municipal...more

CFPB Fines Mortgage Lender for Violating Loan Originator Compensation Rule

On November 13, the CFPB ordered a residential mortgage lender to pay $730,000 for violating the Loan Originator Compensation Rule. According to the complaint filed by the CFPB, from June 2011 to October 2013, the mortgage...more

Loan to Own Variation: Bankruptcy May Not Provide The Answers

In re SR Real Estate Holdings, LLC, 506 B.R. 121 (Bankr. S.D. Cal. 2014) – A group of lenders moved to dismiss the debtor’s bankruptcy case on the basis that it was filed in bad faith, or in the alternative asked the...more

New Jersey Bankruptcy Court Holds That Mortgage Was No Longer Enforceable and Borrower Was Entitled to a “Free House”

Action Item: In light of this decision, lenders should ensure that foreclosures in New Jersey are filed within six years of the date of default. Failure to file a foreclosure within six years may cause the action to be barred...more

New Requirements Regarding Flood Insurance in Massachusetts

On July 23, 2014 , Governor Deval Patrick signed into law “An Act Further Regulating Flood Insurance”, effective November 20, 2014. Links to the Act and to “Frequently Asked Questions” prepared by the Massachusetts Division...more

Strong Arm Powers: Mortgage Boo-Boo Strikes Again

Kellner v First Ohio Banc & Lending, Inc. (In re Geraci), 507 B.R. 224 (Bankr. S.D. Ohio 2014) – A Chapter 13 trustee and the debtor sought to use the strong arm powers of a hypothetical bona fide purchaser of real...more

A Cure for What Ails You – Or At Least One Thing That Does: CFPB’s Cure for “Points and Fees” Mistakes

In a recent amendment to Regulation Z, the CFPB offers a tonic to mortgage lenders and their assignees that have struggled with the “points and fees” calculation for Qualified Mortgages (QMs). The CFPB’s cure allows lenders...more

Cramdown Hurdles Round 2: Confirmation Can Be An Elusive Prize

In re NNN Parkway 400 26, LLC, 505 B.R. 277 (Bankr. C.D. Cal. 2014) – The primary creditor (an undersecured lender) objected to the debtors’ proposed plan of reorganization on various grounds, including that the plan...more

Mississippi Regulatory Compliance Group Quarterly Report Vol. 25 No.3

In This Report: - Good News on Fair Lending - We Knew It Was Coming; CFPB Proposes HMDA “Plus” Rules - CFPB Guidance on Mortgage Brokers Changing to Mini-Correspondent Lenders - When Laws...more

New York Appellate Division Decision Provides Comfort for Secured Lenders Negotiating With Their Defaulting Borrowers

On October 28, the New York Supreme Court, Appellate Division – First Department affirmed the dismissal of claims brought by a defaulting borrower against its lender, Siemens First Capital Commercial Finance LLC*, in Whitecap...more

FHFA Director Outlines Plan To Refine Representation and Warranty Framework

On October 20, FHFA Director Melvin Watt delivered remarks at the Mortgage Bankers Association Annual Conference in Las Vegas, Nevada. Watt addressed the Agency’s progress in ensuring safety and soundness and liquidity in the...more

Fannie Mae Provides New Appraisal Tool For Lenders

On October 20, Fannie Mae announced that its proprietary appraisal and analysis application, Collateral Underwriter, will become available to lenders in early 2015. Currently, Fannie Mae uses the tool to “analyze appraisals...more

Williams v. FDIC (In re Positive Health Management) - Lender Forced to Return Payments Made by Non-Borrower

On October 16, 2014, the United States Court of Appeals for the Fifth Circuit entered an order requiring a real estate lender, First National Bank (the “Lender”), to refund certain mortgage payments it received from...more

A Welcome Change of Law in NC: A Workable Framework for Transferring Declarant Rights in a Foreclosure or Deed in Lieu

Good news! The murkiness surrounding declarant rights in North Carolina became a little clearer this summer. On July 7, 2014, Governor McCrory signed an amendment to the Planned Community Act addressing the transfer of...more

Just When You Thought You Were Out, They Pull You Back In

It is a rare occasion for a secured lender to foreclose on collateral with a value in excess of the entire debt owed, particularly following a bankruptcy filing by the borrower, but on that rare occasion the lender should...more

New California Case Illustrates Peril of Full Credit Bid

In a new California case, a lender that made a full credit bid at a foreclosure sale lost its right as mortgagee under a lender’s insurance policy for damage to the property that occurred prior to foreclosure. This was so...more

Lenders Beware: the Nevada Supreme Court Holds That Foreclosures of Homeowners’ Association Liens May Extinguish First Priority...

Nevada has adopted the Uniform Common Interest Ownership Act of 1982 (the “Act”) which governs homeowners’ associations (“HOA”). One particular provision of that Act, enacted by Nevada in 1991 and later amended, and codified...more

Vermont Updates Mortgage Broker Rules

The Vermont Department of Financial Regulation has adopted regulations that update the rules for the licensing and regulation of mortgage brokers. The regulation sets forth standards on...more

Holding a Deed in Lieu in Escrow

To avoid foreclosure, a borrower might agree to execute a deed in lieu of foreclosure to be held in escrow. In these circumstances, the borrower would execute a deed-in-lieu of foreclosure to the mortgaged property in favor...more

NYDFS to Investigate Potential Predatory Practices by Hard Money Lenders

On September 16, the NYDFS announced that they have issued subpoenas to nine “hard money” lenders, groups that originate short-term, high interest loans secured by a borrower’s home or other real estate, as part of a probe...more

California Amends Uniform Commercial Code Article 9 Regarding Name of Individual Debtor on Financing Statements

The California Legislature passed, and Governor Brown signed, Assembly Bill No. 1858, which changes the way individual debtors are identified in Uniform Commercial Code financing statements. The bill brings California into...more

Yet Another New Case On Standing to Foreclose

In July, the 2d DCA overturned a bank’s summary judgment on the grounds that the bank failed to rebut the defense of lack of standing. The frequency and similarity of these cases makes me think of the movie Goundhog Day!...more

What Exactly Is A Subordination, Non-Disturbance And Attornment Agreement, And Why Do I Need One?

While most commercial leases contain a requirement that the tenant will execute a “Subordination, Non-Disturbance and Attornment Agreement,” commonly referred to a an “SNDA,” a majority of tenants who have signed such leases,...more

AB 1103 Update: Postponement of Certain Nonresidential Building Energy Use Disclosure Requirements

Under California Assembly Bill 1103 (“AB 1103”, codified as California Public Resources Code Section 25402.10), owners and operators of nonresidential buildings must disclose certain building energy performance data to a...more

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