Real Estate Law Community Troubled Loans

Force-Placed Insurance: Another Multi-Billion Dollar Industry Caught in the Regulatory Cross Hairs

karenyotis@gmail.com (Karen C. Yotis) — Tue, 07 May 2013 16:38:00 -0400

By Karen C. Yotis, Esq.

Forced-placed insurance (FPI), which is sometimes referred to as 'lender-placed insurance,' is a specialty product that is intended to insure properties when standard property coverage is allowed to lapse. During the housing boom, FPI occupied an overlooked corner of the hazard insurance business. Its importance has been growing, both as a result of increased demand for FPI in the wake of the nation's housing crisis, but also because of the rising vulnerability of property to damage from increased

More Courts Reject Eleventh-Hour Attempts To Avoid Foreclosure Based On An Alleged Lack Of Standing

pjgallagher@pbnlaw.com (Peter J. Gallagher) — Tue, 30 Apr 2013 15:03:00 -0400

Two more Appellate Division panels have refused to allow defendant's in foreclosure lawsuits to raise standing as an eleventh-hour defense. As we previously reported -- Changing Tide in Forclosure Litigation? Courts Taking Closer Look When Defendants Assert Lack Of Standing At Last Minute -- there is now a clear trend against allowing defendants to stay silent in the face of a foreclosure lawsuit only to appear at the last minute, usually on the eve of a sheriff's sale, and seek to vacate final judgment based on an alleged lack of standing to foreclose. Two recent Appellate Division cases continue to bring this point home.

In bulletin (Bulletin) detailing its plans to closely supervise loan servicing transfers and enforce federal and state law compliance in connection with such transfers. The backdrop for this new initiative is the CFPB's concern that transferee servicers frequently fail to honor the terms of trial loan modifications provided by predecessor servicers. This may happen because relevant documents are not transferred to the transferee servicer or

When Can Foreclosing Lenders Be Accused Of Acting In Bad Faith?

pjgallagher@pbnlaw.com (Peter J. Gallagher) — Tue, 26 Mar 2013 16:32:00 -0400

In a recent decision, the Chancery Division denied a lender's motion to strike a borrower's contesting answer in a foreclosure lawsuit, holding that the borrower had adequately pled a claim that the lender acted in bad faith. While this decision is unique based on the facts of the underlying dispute, it does, by contrast, serve as a reminder that lenders generally cannot be held to have acted in bad faith when they simply attempt to enforce the terms of loan documents as written.

In Wells Fargo Bank, N.A. v. Schultz, [

In a recent case, the Supreme Court of Nevada agreed that a lender needed to wait until the completion of a foreclosure sale before making a deficiency claim against a guarantor. In Ken L. Templeton Family Trust, et al. v. Eighth Judicial District Court of the State of Nevada, et al., 2013 Nev. Unpub. LEXIS 158 (Nev.), the court granted the issuance of a writ of mandamus, instructing the district court to vacate its order granting in part AG/ICC Willows Loan's motion for summary judgment and directing the district

Ballard Spahr LLP: CFPB Issues Guidance on Mortgage Servicing Transfers

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Thu, 28 Feb 2013 07:54:00 -0400

by the Mortgage Banking Group

The Consumer Financial Protection

Troutman Sanders LLP: North Carolina Court of Appeals Forestalls Borrower’s Attempt to Collaterally Attack Foreclosure Proceeding

Troutman.Sanders@placeholder.com (Troutman Sanders) — Wed, 27 Feb 2013 06:51:00 -0400

By John C. Lynch and D. Kyle Deak

On Plaintiff's appeal of dismissal of his Complaint seeking to challenge the authority of the lender to foreclose, the Court of Appeals affirmed the Superior Court's dismissal and found that Plaintiff's failure to properly and timely appeal the Order of the

Ballard Spahr LLP: Borrower Can Sue after Three Years To Rescind Mortgage Loan, 3rd Circuit Rules

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Mon, 25 Feb 2013 08:06:00 -0400

By the Mortgage Banking Group

A borrower can bring a lawsuit seeking

Changing Tide In Foreclosure Litigation? Courts Taking Closer Look When Defendants Assert Lack Of Standing At Last Minute

pjgallagher@pbnlaw.com (Peter J. Gallagher) — Mon, 25 Feb 2013 09:01:00 -0400

In a series of recent decisions, New Jersey courts appear to be taking a stance against defendants raising, as a last-minute defense, that a party lacks standing to foreclose. This is good news for lenders and their assignees, who, prior to these decisions, faced the prospect of proceeding to final judgment of foreclosure, only to have a party appear at the last minute, allege a lack of standing to foreclose, and send the process back to square one.

The changing body of case law began with the Appellate Division's

Duane Morris LLP: N.J. Superior Court Finds That Condemning Authority Is Not Required to Negotiate with Mortgagee Prior to Initiation of Eminent Domain Action

Duane.Morris@placeholder.com (Duane Morris LLP) — Fri, 22 Feb 2013 13:47:00 -0400

In a recent decision, the Appellate Division of the Superior Court of New Jersey has held that New Jersey law does not require a condemning authority to negotiate with a mortgagee, which has obtained a final judgment of foreclosure on the subject property, prior to the initiation of an eminent domain action. Borough of Merchantville v. LB-RPR REO Holdings, LLC, No. A-3745-11T4 (App. Div., 2013) [enhanced version available to lexis.com subscribers].

By Richard D. Vetstein, ESQ

Federal Appeals Court Reinstates Borrower's Wrongful Foreclosure Claim

Troutman Sanders LLP: CFPB Announces Plan to Implement New Rules for Mortgage Industry

Troutman.Sanders@placeholder.com (Troutman Sanders) — Fri, 15 Feb 2013 08:02:00 -0400

By John C. Lynch, Ethan G. Ostroff and David M. Gettings

By Richard D. Vetstein, ESQ

Court Uses Novel Equitable Assignment of Mortgage Theory

In what could be the first test case of a new theory to clear up defective foreclosure titles - and much welcome news for property

Troutman Sanders LLP: CFPB Releases Rule Aimed at Reforming Force-Placed Homeowners’ Insurance Practices

Troutman.Sanders@placeholder.com (Troutman Sanders) — Mon, 11 Feb 2013 07:59:00 -0400

By David N. Anthony, Alan D. Wingfield, Nicholas R. Klaiber and Virginia Bell Flynn

Ballard Spahr LLP: Mortgage Foreclosure Is Debt Collection under the FDCPA, Sixth Circuit Holds

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Fri, 08 Feb 2013 09:58:00 -0400

By the Consumer Financial Services Group

Lawyers whose principal business is

Vetstein Law Group: Massachusetts SJC Issues Another Important Foreclosure Ruling In HSBC Bank v. Matt

VetsteinLawGroup@placeholder.com (Vetstein Law Group, P.C. ) — Wed, 06 Feb 2013 07:17:00 -0400

By Richard D. Vetstein, ESQ

Legal Standing For Mortgage Lender/Servicer Must Be Established To Start Foreclosure

Today [January 14th] the Massachusetts Supreme Judicial Court has issued what I believe to be another very important ruling involving foreclosures in the case of HSBC Bank v. Matt

Ballard Spahr LLP: CFPB Adopts Mortgage Escrow Account Final Rule

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Tue, 29 Jan 2013 09:19:00 -0400

By the Mortgage Banking Group

Among other final rules published on January 10, 2013, the CFPB issued its final mortgage escrow account rule under a section of the Dodd-Frank Act relating to the establishment of mandatory escrow accounts on higher-priced mortgage loans. The final rule is effective June 1, 2013.

By Richard J. Andreano, Jr., John D. Socknat, and Michael S. Waldron

By the Mortgage Banking Group

The CFPB has issued its long

Ballard Spahr LLP: Temporary Exemptions Adopted for Mortgage Disclosures

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Mon, 03 Dec 2012 14:38:00 -0400

By the Mortgage Banking Group

As expected, on November 16, 2012, the Consumer Financial Protection Bureau adopted a temporary exemption for certain mortgage disclosure requirements added by the Dodd-Frank Act. This exemption will allow the disclosures to be implemented along with the proposal to integrate the Real Estate Settlement Procedures Act and Truth in Lending Act disclosures. Without the temporary exemption, the disclosures would be required as of January 21, 2013.

Maryland Court Affirms Self-Help via Lock-Out but Reverses Conversion Claim Related to Resident's Belongings

The Maryland court of appeals will not recognize an impermissible forcible entry when a foreclosure purchaser's lawful possessory interest in a dwelling is enforced (through lock-out) by means of the common law remedy of self-help.

In Nickens v. Mount Vernon Realty Group, LLC (MVRG), 2012 Md. LEXIS 664 (Md. Oct. 19, 2012) [The Ohio Supreme Court recently addressed the following question:

Can a lack of standing at the commencement of a foreclosure action be cured by obtaining an assignment of a note and mortgage sufficient to establish standing prior to the entry of judgment?

On October 31^st, the court answered:

[S]tanding is required to invoke the jurisdiction of the common pleas court, and therefore it is determined as of the filing of the complaint

Ballard Spahr LLP: Pennsylvania County Recorder Can Sue MERS for Failure to Record Mortgage Assignments, Federal Court Rules

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Mon, 12 Nov 2012 14:49:00 -0400

By the Consumer Financial Services and Mortgage Banking Groups

Ballard Spahr LLP: Colorado Court of Appeals Finds “Fractional Interests” Not Lots under the Interstate Land Sales Full Disclosure Act

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Wed, 07 Nov 2012 11:27:00 -0400

by Christopher W. Payne and Joseph E. Lubinski

Ballard Spahr LLP: DOJ Fair Lending Focus Continues in Settlement of Case Challenging Lender's Minimum Loan Amount Policy

BallardSpahr@placeholder.com (Ballard Spahr LLP) — Thu, 25 Oct 2012 13:58:00 -0400

The Department of Justice's recent announcement that it had settled its case against Luther Burbank Savings challenging Luther's minimum loan amount policy demonstrates the DOJ's continued focus on fair lending. The settlement underscores the need for lenders to have their lending policies reviewed by counsel for compliance with fair lending laws and to be prepared to defend such policies against fair lending challenges.

The DOJ's