LexisNexis® Legal Newsroom
Short Sale Sellers May Face Huge Tax Bill In 2014

Congress Fails To Extend Mortgage Forgiveness Debt Relief Act for 2014 The ringing of the New Year may not have been a welcome sound to distressed homeowners who were not able to complete short sales by the close of 2013. Unfortunately, Congress failed to extend the December 31, 2013 expiration...

First Circuit Ruling in Foreclosure Litigation May Help Lenders Facing HAMP-Related Claims

By the Ballard Spahr LLP Mortgage Banking Group The law is well settled that borrowers do not have a direct right of action under the Home Affordable Modification Program (HAMP) against a lender that fails to offer a loan modification. A split of authority continues, however, on whether a lender...

Proceed with Caution When Foreclosing in Washington State: Split Decisions Regarding Deficiency Claims

Last month, the Washington Court of Appeals, Division One, ruled that, notwithstanding the anti-deficiency provision in the state's Deeds of Trust Act, a lender can pursue a deficiency judgment against a guarantor following a non-judicial foreclosure of the property securing the underlying borrower's...

Enfeoff This

Judge (J): We’re here on a motion by BailMeOutBanc for summary judgment in its foreclosure action against Lender Liability Equities LLC. It’s hard to imagine a more straightforward motion. Counsel: what’s the defense? Borrower’s Counsel (BC): Your Honor, there is a fatal defect...

Statute of Limitations Update in Florida Foreclosure Actions: Fifth District Court of Appeals Holds that Each Default Creates a New Case of Action

I. The Opinion On April 25, 2014, the Fifth District Court of Appeals issued an important opinion in U.S. Bank Nat’l Ass’n v. Bartram , No. 5D12-3823, 2014 Fla. App. LEXIS 6057 (Fla. 3d DCA Apr. 25, 2014), [ enhanced version available to lexis.com subscribers ], holding that “a default...

Real Estate Loan Mitigation, Foreclosure, and Mortgagor Tax Liabilities

By Patricia Hughes Mills J.D. LL.M Upon mortgage debt default, the mortgagee's foreclosure or mitigation of the debt yield differing tax consequences to the mortgagor. Moreover, the mortgagor's tax treatment on foreclosure depends, in part, on whether the mortgagor is personally liable...

It's Not "Bad Faith" For Lenders To Stick To The Terms Of Their Agreements With Borrowers

Last Friday, the Appellate Division provided another reminder that it is not “bad faith” for a lender to abide by the terms of its mortgage with a borrower. In Warner v. Sovereign Bank , borrowers fell behind on their residential mortgage and contacted their lender to request a modification...

New Jersey Law Requires Creditors to Maintain Vacant Property During Pending Foreclosures

New Jersey municipalities are now authorized to penalize creditors who do not address code violations or abate nuisances on vacant or abandoned residential property subject to a pending foreclosure action. Pursuant to Assembly Bill A347 , New Jersey municipalities will now be allowed "to require...

The Doctrine of Equitable Assignment is Alive and Well in Wisconsin

That was the holding of the Wisconsin Supreme Court in the opinion in Dow Family, LLC v. PHH Mortgage Corporation , 2014 WI 56, [ enhanced version available to lexis.com subscribers ]. The facts of the case are similar to thousands of foreclosure cases prosecuted in Wisconsin every year, but with a couple...

Maine Supreme Court Decision Limits Scope of MERS' Ability to Assign Mortgages

On July 3, 2014, the Maine Supreme Judicial Court issued a ruling in Bank of America, N.A. v. Greenleaf , 2014 ME 89 (Me. July 3, 2014), [ enhanced version available to lexis.com subscribers ], significantly affecting the ability of Mortgage Electronic Registration System, Inc. (MERS) to assign mortgage...

Not A Holder In Due Course? Not Necessarily A Standing Problem

By now, all lenders have likely been faced with at least one situation where a borrower alleges that the lender lacked standing to sue on a note because the lender was not the holder of the note. While New Jersey courts have largely eliminated this defense, at least in the post-judgment context (see...

"Just One Victory" By Bank Over Todd Rundgren In Foreclosure Fight

Todd Rundgren is a well known musician, songwriter, and producer. Most of his hits came out in the 1970's and early 1980's and are therefore a bit before my time. However, he was thrust back into the limelight when Liv Tyler shot to fame in the early 1990's as, among other things, the star...

Real Cases in Real Estate By Andrea Lee Negroni, Esq. – August 19, 2014 Update

A Missouri condominium association’s lien for an unpaid assessment was superior to a deed of trust securing the owner’s refinance loan . In 2004, Trish Carcopa bought a condominium at Parkway Towers in Kansas City, Missouri. In 2006, she refinanced her purchase money loan. After she bought...

Ibanez Update: Land Court Ruling May Clear Defective Titles

It appears we may be nearing the end of the misery resulting from the infamous U.S. Bank v. Ibanez , [ enhanced version available to lexis.com subscribers ], foreclosure decision, which has caused hundreds if not thousands of title defects across the Commonwealth. A recent Land Court ruling combined...

Gov. Patrick Effectively Kills Act Clearing Titles to Foreclosed Properties

Senate Bill 1987 Would Have Cleared Title For Innocent Homeowners Acceding to the demands of fair housing community activists, Massachusetts Governor Deval Patrick has rejected Senate Bill 1987, An Act Clearing Titles to Foreclosed Properties . The bill would have cleared title of homes affected by...

D.C. Court of Appeals Extinguishes Lender’s Mortgage Lien Following Association Lien Foreclosure

By Roger D. Winston and Joseph E. Lubinski A recent decision by the District of Columbia Court of Appeals brings into renewed focus the tension between condominium and homeowner associations and lenders when it comes to payment of delinquent association assessment charges. In Chase Plaza Condominium...

HOA Lien Extinguishes First Deed of Trust in Foreclosure, Nevada Supreme Court Holds

By Abran Vigil and Matthew D. Lamb On the heels of a recent D.C. Court of Appeals ruling , [ enhanced version available to lexis.com subscribers ], the Nevada Supreme Court issued an opinion last Thursday holding that a homeowners association (HOA) lien is a true super-priority lien that, if foreclosed...

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

The Missouri Supreme Court recently ruled, [ enhanced version available to lexis.com subscribers ], 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 concern. A state bankers...

No, You Cannot Enforce A Mortgage That Has Already Been Paid In Full

By Peter J. Gallagher (@pjsgallagher) The Appellate Division recently dealt with an unusual situation involving a borrower trying to enforce a mortgage, which had been satisfied years earlier, against a lender that was foreclosing on a different loan. While disputes occasionally arise between lenders...

Appellate Division Holds That Buyer Can Sue Seller's Broker For Failing To Relay Offer To Seller

In a decision issued earlier this month, the Appellate Division reinstated a lawsuit against a real estate broker who failed to relay an offer from the buyer to its client, the seller. If you are thinking, as I was, "of course the court would do this, why wouldn't you be able to sue" then...

When "Shall" Means "Shall": Wisconsin Supreme Court Requires Mortgage Lenders to Sell Abandoned Properties in Foreclosure

Last week the Wisconsin Supreme Court issued its decision in Bank of New York v. Carson , 2015 WI 15, a case we previewed here . The case is significant for its potential lasting effects on mortgage foreclosures in Wisconsin. The Carson case involves interpretation of Wis. Stat. § 846.102, [...

When "Shall" Means "May": Wisconsin Court of Appeals Allows Mortgage Lenders to Slow the Foreclosure Sale Process

Last week we discussed the Wisconsin Supreme Court’s decision, [ enhanced version available to lexis.com subscribers ], in Bank of New York v. Carson permitting circuit courts to force a mortgagee to hold a sheriff’s sale. Today we rewind the clock a bit to a decision last December by the...

SJC Puts The Nail In Popular Foreclosure Defense Strategy

Abate v. Fremont Investment & Loan : High Court Rules That “Try Title” Procedure Only Available After Foreclosure Auction Completed , [ enhanced version available to lexis.com subscribers ]. After Deutsche Bank foreclosed his Newton home, Thomas Abate brought a lawsuit in the Land...

Fifteen Minute Foreclosure Counseling Session at Gillette Stadium Deflated Borrower’s Rights

Court Halts Eviction For Distressed Homeowner, Validity of Foreclosure In Question ( Wells Fargo v. Cook , Mass. Appeals Court May 19, 2015) , [ enhanced version available to lexis.com subscribers ]. In response to the foreclosure crisis, HUD enacted regulations requiring lenders to provide distressed...

Third Circuit Rules FDCPA Claims Can Be Based on Foreclosure Complaints

The U.S. Court of Appeals for the Third Circuit, [ enhanced version available to lexis.com subscribers ], recently ruled that foreclosure complaints can be the basis of Fair Debt Collection Practices Act (FDCPA), [ enhanced version available to lexis.com subscribers ], claims. This decision continues...