by Carol Lawson Esq | Feb 8, 2015 | Florida Foreclosures, Foreclosure
The U.S. Court of Appeals for the Eleventh Circuit recently affirmed a summary judgment in favor of a mortgagee on claims of wrongful attempted foreclosure, trespass, breach of contract and violation of the RESPA.
While affirming the order on the grounds that no damages could have been sustained by the borrower, the Eleventh Circuit ruled that a breach of contract claim could exist where the purported breach arises from incorporated HUD regulations for which there is no private right of enforcement. The Eleventh Circuit also held that the RESPA was not violated by the mortgagee’s timely QWR response, and that no causes of action lie on the mortgagor’s other claims.
A copy of the opinion is available at: http://www.gpo.gov/fdsys/pkg/USCOURTS-ca11-13-15340/pdf/USCOURTS-ca11-13-15340-0.pdf
The borrower sought the recovery of damages on the basis that the mortgagee: 1) allegedly wrongfully attempted to foreclose, 2) supposedly trespassed on her property while carrying out illegal property inspections, 3) allegedly breached the terms of the mortgage deed, and 4) allegedly violated section 2605(e)(2) of the federal Real Estate Settlement Procedures Act (“RESPA”) by failing to provide a compliant response to the
In late 2011, the mortgagee began the process of setting a non-judicial foreclosure sale. However, prior to any such sale being set, the borrower sent in a Qualified Written Request (“QWR”) regarding the rejection of the partial payments, in response to which the mortgagee timely advised her of the reasons behind its decision to reject the attempted partial payments. Following the QWR, the borrower made no further payments. Thereafter, the subject litigation ensued. The mortgagee refrained from scheduling a sale of the property.
The Eleventh Circuit addressed the breach of contract claim. The mortgagor had claimed that the mortgagee breached the terms of the federally-insured mortgage deed when it allegedly failed to strictly comply with “certain regulations promulgated by the Department of Housing and Urban Development (“HUD”).
In rejecting this claim below, the district court had held that “it would be anomalous” to allow a breach of contract claim to stand that is based upon regulations that do not provide a private right of action for violations. The Eleventh Circuit disagreed, however, holding that as the federally-insured mortgage contemplated compliance with the HUD regulations as a condition precedent to the mortgagee’s right to non-judicially foreclose, a breach of contract action would otherwise lie for the violation of that condition.
The Eleventh Circuit rejected the mortgagee’s arguments that no private right of action exists to enforce HUD regulations encapsulated in a contract, that the mortgagor’s claim is barred by the first-breach doctrine, and that the mortgagor’s claim is barred under the pre-existing duty rule.
The Court noted that this is an issue of first instance in Georgia, as well as within the Eleventh Circuit, and nationally it appears as if courts are split on this question. See, e.g., Wells Fargo Home Mortg. Inc. v. Neal 922 A.2d 538, 543-47 (Md. 2007)(“holding that mortgagor could not assert breach of contract claim in view of fact that deed was a form not drafted by lender and HUD regulations do not create a private right of action); but see, e.g., In re Silveira, No. 11-44812-MSH, 2013 Bankr. LEXIS 1904, at *45 (Bankr. Mass. May 3, 2013)(“While these HUD regulations do not provide a mortgagor with a private right of action … if they are incorporated into the various loan documents … they become enforceable by the parties to the loan documents.”).
Notwithstanding the fact that it had found a contractual duty, the Eleventh Circuit further determined that there was no evidence in the record of damages arising from the alleged breach.
Section 2605(e)(2) of the RESPA requires a servicer to respond to a qualified written request “after conducting an investigation, provide the borrower with a written explanation or clarification that includes – (i) to the extent applicable, a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer, and (ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower.” Id.
The Eleventh Circuit also quickly dispensed with the mortgagor’s claim that the mortgagee’s property inspections had constituted a trespass on her property, given that the subject mortgage deed provided the mortgagee the right to carry out such inspections.
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: [email protected]
by Carol Lawson Esq | Feb 8, 2015 | Consumer Credit, Florida Foreclosures, Foreclosure
http://scholar.google.com/scholar_case?case=147641421521665296&hl=en&as_sdt=6&as_vis=1&oi=scholar
FL Fourth District, reversed a trial court’s dismissal of a mortgage foreclosure action, ruling that the testimony of a successor loan servicer’s records custodian was sufficient to lay a proper evidentiary foundation to admit payment records over the borrower’s lack of foundation and hearsay objections.
The Court’s rationale was the business records exception to the hearsay rule — that such documents have a high degree of reliability because businesses have a built-in incentive to make sure their own records are accurate records, because the businesses rely on them to operate. In the Appellate Court’s words, “[m]inor discrepancies in calculations, given the volumes of records transferred from one business entity to another, should not render business records of a successor servicer untrustworthy for purposes of laying a foundation for the business record exception given that the trustworthiness of the records has been established.”
Where a business acquires custody of another business’ records and makes them part of its own business records, the records become those of the successor business. For a current servicer to establish the business records exception for information transmitted by a prior servicer under § 90.803(6), the testifying witness must not only testify that the current servicer verified the information it received, but must also have knowledge of the prior servicers’ record keeping procedures. The Witness must show that the records are trustworthy by, for example, explaining that the business or contractual relationship between the two companies provides a substantial incentive for accuracy.
The successor servicer can also verify that the business records it acquired are trustworthy by stating that, in order verify the accuracy of information it receives in connection loan transfers, its employees go through the files, check them for accuracy and then contact the borrower.
The Court held that the mortgagee’s witness provided sufficient evidence of trustworthiness by testifying that the fourth servicer reviewed the prior servicer’s payment records for accuracy before integrating them into its records.
http://www.4dca.org/calendar/briefs/Jan%202015/1-13-15/13-3514%20Initial%20Brief.pdf
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: [email protected]
by Carol Lawson Esq | Sep 30, 2014 | Foreclosure, Uncategorized
The Third District California Court of Appeal, affirmed the dismissal of the borrower’s complaint, ruling a wrongful foreclosure cause of action based on alleged defects in the assignment and securitization of the mortgage loan requires the borrower to demonstrate resulting prejudice.
The Court held that the Borrower lacked standing to challenge the transfer because she was not party to the assignment, nor was she the intended recipient of the assignment.
A copy of the opinion is available at: http://www.courts.ca.gov/opinions/documents/C071882.PDF
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: [email protected]
by Carol Lawson Esq | Sep 25, 2014 | Florida Foreclosures, Foreclosure
Foreclosure inventory is down nationwide, but the delinquency rate is up, according to Black Knight Financial Services‘ “First Look” at August Mortgage Data released on September 25.
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: [email protected]
by Carol Lawson Esq | Jul 20, 2014 | Florida Foreclosures, Foreclosure, Loan Modification, Uncategorized
The Ninth Circuit \, U.S. Court of Appeals dismissed in part, reversed in part, and affirmed in part, an appeal from the dismissal of numerous allegations in multidistrict litigation challenging the role of MERS in the foreclosure process.
The Ninth Circuit reversed the dismissal of a claim with regards to “robo signing”, based upon Arizona’s false documents statute, but upheld the dismal of other claims.
The complaint had a count alleging wrongful foreclosure based upon “note-splitting” – in violation of Nevada, California and Arizona law – the Ninth Circuit found that claims failed because “none of the [borrowers] has shown a lack of default, tender, or an excuse from the tender requirement, [borrowers’] wrongful foreclosure claims cannot succeed.”
The Ninth Circuit ruled that Edelstein v. Bank of New York Mellon, 286 P.3d 249 (Nev. 2012) “makes clear that MERS does have the authority, for the purposes of Nev. Rev. Stat. Sec. 107.080, to make valid assignments of the deed of trust to a successor beneficiary…”
The Court found the borrowers’ allegations of wrongful foreclosures under Arizona, California and Nevada law were without merit and rejected the related claim of aiding and abetting wrongful foreclosure.
A copy of the opinion is available at: http://cdn.ca9.uscourts.gov/datastore/opinions/2014/06/12/11-17615.pdf.
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: [email protected]
by Carol Lawson Esq | Jun 12, 2014 | Bankruptcy, Florida Foreclosures, Foreclosure, Loan Modification, Uncategorized
I am thinking of holding a clinic on how to fill our loan modification forms on a Saturday afternoon to be determined. The clinic would be hands on for 2 hours, seating would be limited to 8 people and the cost would be $100 per person. We will provide loan modification forms and you can bring your own. I will take you through the loan modification process step by step. Any takers?
Clearwater Bankruptcy, 28870 U.S. Hwy 19 #300, Hodusa Towers, Clearwater, FL 33761,
Phone: (727) 330-1627 email: [email protected]
