Showing 52 posts in Foreclosures.
A prior blog post analyzed Green Tree Servicing v. Asterino-Starcher, et al., 2018-Ohio-977 (Franklin Cty. App., March 15, 2018), which advises, in part, “[a] foreclosure proceeding is a two-step process involving, first, the enforcement of a debt obligation, and, second, the creditor's right to collect against the security given by the borrower for that debt. . . . There is reason to distinguish the action on the note from the ensuing action against the associated collateral. The first claim involves only the maker of the note and the person entitled to enforce it. The second joins all those with an interest in the mortgaged property.” This article discusses what happens if a secured lender believes that quote and tries to collect the mortgage debt through two separate lawsuits. Read More ›
Foreclosure cases often proceed without participation or significant defense by the obligor / mortgagor because that party is without both any defense and any funds to pay counsel. That happened in Green Tree Servicing v. Asterino-Starcher, et al., 2018-Ohio-977 (Franklin Cty. App., March 15, 2018). In Green Tree Servicing, as sometimes occurs, a junior lienor had the motivation and resources to contest the foreclosure. Read More ›
An Ohio residential loan and mortgage were made and recorded in 2008. After default, a foreclosure case was started, but not completed – it was dismissed without prejudice. Read More ›
On January 14, 2013, the Sixth Circuit Court of Appeals ruled that the Fair Debt Collection Practices Act (“FDCPA”) applies to foreclosures, even non-judicial foreclosures, of residential property. The law firm of Reimer, Arnovitz, Chernek & Jeffrey Co., LPA and two of its attorneys (“RACJ”) were sued for foreclosing on a home for improperly alleging that JPMorgan had conveyed, assigned and transferred all of its rights in a promissory note to Chase Home Finance LLC (“Chase”), an arm of JPMorgan. Also sued were JP Morgan and Chase. In fact, the Note had already been assigned to Fannie Mae, although the loan was serviced by JP Morgan and subsequently Chase. The Sixth Circuit held the FDCPA claims could proceed against RACJ based on the improper assertions of ownership of the Note by Chase. Mortgage foreclosure, including non-judicial foreclosures, was deemed to equal debt collection under the Act. However, the servicer, Chase, was not liable because the FDCPA only applies to a debt collector, and at the time the loan was assigned to Chase, the Note was not in default. The Sixth Circuit’s Opinion is also consistent with the Third and Fourth Circuit of the Court of Appeals. However, a number of district courts have disagreed with this result, instead analyzing foreclosures as the enforcement of security interests rather than the collection of a debt. The Sixth Circuit concluded that other than repossession agencies and their agents, it could think of no others whose only role in the collection process is the enforcement of the security interest. Read More ›
Will the Real Owner of This Mortgage Loan Please “Stand”: The Necessary Standing for Ohio Foreclosure Actions After Schwartzwald
On October 31, 2012, the Supreme Court of Ohio was terrifying the banking industry by its decision in Federal Home Loan Mortgage Corp. v. Schwartzwald, 2012-Ohio-5017 (Oct. 31, 2012) at the same time as ghosts and goblins were scaring children. In Schwartzwald, the Court answered the question of whether a lender could correct its lack of standing when commencing a foreclosure action by obtaining an assignment of a note and mortgage prior to the final judgment of foreclosure and sale. Read More ›
Equitable Subrogation Unavailable when Actual or Construction Notice of Intervening Judgment Lien Exists
The Kentucky Supreme Court, on March 24, 2012, in the case of Mortgage Electronic Registration Systems Inc.[MERS] v. Roberts, 366 S.W.3d 405 (Ky. 2012), conclusively held that the doctrine of equitable subrogation was unavailable to protect a subsequent lender and mortgage holder when its loan proceeds were used to pay off a prior lender’s mortgage and an intervening properly filed judgment lien created actual or constructive notice. The Court expressly held that the so-called “Wells Fargo rule” under which equitable subrogation is not available if the lender has constructive knowledge of an existing tax lien also applied to an intervening judgment lien, overruling the prior decision in Louisville Joint Stock Land Bank v. Bank of Pembroke, 9 S.W.2d 113 (Ky. 1928). Read More ›
On March 26, 2012, the Consumer Financial Protection Bureau filed an Amicus Brief in the United States Court of Appeals for the Tenth Circuit in which it took the side of the consumer in an interpretation of Section 125 of the Truth in Lending Act relating to the statutory right to rescind certain types of mortgage loans. Read More ›
The Indiana Supreme Court recently clarified the standard for when defendants in mortgage foreclosure actions are entitled to have a jury, rather than a judge, consider their defenses and counterclaims. Lucas v. U.S. Bank, N.A., 953 N.E.2d 457 (Ind. 2011). Plaintiff bank filed an action against two borrowers to enforce the terms of a promissory note and to foreclose the mortgage that secured the note. The borrowers asserted various statutory and common law defenses and counterclaims and filed a third-party complaint against the loan servicer, asserting similar common law and statutory claims. The borrowers also filed a demand for a jury trial “on all issues deemed so triable.” Read More ›
Last month, the U.S. Supreme Court agreed to hear another bankruptcy case and this one could have a profound effect on a lender’s bidding rights when its collateral is up for sale. RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166, cert. granted Dec. 12, 2011. In the lower courts, the debtor sought approval of a bankruptcy plan which would have sold the lender’s collateral at auction without allowing the bank to credit bid. The Seventh Circuit Court of Appeals rejected that approach, saying that secured creditors had a right to acquire the property by bidding with their liens. Read More ›
American Law Institute Attempts To Clarify Law Concerning Transfer And Enforcement Of Mortgage Notes
The current “Mortgage Crisis” has prompted many borrowers to challenge the right of a lender or mortgage servicer to bring a foreclosure action, asserting that errors in the process of selling or assigning the note and/or mortgage make it difficult or impossible to enforce those documents. Those contests have often been couched in terms of lack of standing, inability to prove ownership of mortgage documents or invalid/undocumented assignment of those documents. Both counsel and courts have sometimes evidenced uncertainty concerning the applicable law and its impact on these issues. On November 14, 2011, the American Law Institute published a report entitled “Application of the Uniform Commercial Code to Selected Issues Related to Mortgage Notes” which attempts to clarify some of the frequently encountered questions in this area. It can be found at www.uniformlaws.org/shared/committees_materials/PEBUCC/PEB_Report_111411.pdf. Read More ›
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William T. Repasky practices with the Litigation Department at Frost Brown Todd. He focuses on lending and commercial services; banking litigation and financial institutions.