California Appellate Court Holds Lender’s Deed of Trust Was an Enforceable First-Priority Lien Despite the Borrower Having Obtained Title Via a “Sham Transaction”

The California Court of Appeals recently held that a deed of trust was a first-priority lien on a property even though the borrower who executed the deed of trust obtained title via a “sham transaction” because the lender was a bona fide encumbrancer for value.  See Bank of New York Mellon v. Nazaryan, 2018 WL 1736622 (Cal. Ct. App. 2018).  There, defendant and her husband purchased the subject property in 1998.  In 2002, defendant transferred her interest in the property to her husband, and her husband executed a deed transferring the property to his sister that same day.

Ninth Circuit Holds Company Collecting Debts for Hospital Did Not Violate FDCPA Because It Was Meaningfully Involved in the Process

The United States Court of Appeals for the Ninth Circuit recently affirmed a district court’s grant of defendants’ motion for summary judgment and held that the defendant debt collection agency was meaningfully involved in the debt collection process and, as such, did not violate the Fair Debt Collection Practices Act (“FDCPA”).  See Echlin v. PeaceHealth, 887 F.3d 967 (9th Cir. 2018). 

Seventh Circuit Holds Debt Collector Violated FDCPA by Reporting Debts to Credit Reporting Agencies Without Informing Agencies That Debts Were Disputed

The United States Court of Appeals for the Seventh Circuit recently affirmed a district court’s grant of plaintiffs’ motions for summary judgment and held that the defendant debt collector violated the Fair Debt Collection Practices Act (“FDCPA”) by communicating plaintiffs’ debts to credit reporting agencies without stating that plaintiffs disputed the debts.  See Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337 (7th Cir. 2018).  In the case, defendant attempted to collect debts owed by plaintiffs, and plaintiffs’ counsel sent a letter to defendant in response. 

New York Supreme Court Holds Mortgagee Does Not Need to Send 90-Day Foreclosure Notice if Mortgagee Is Not a “Lender, an Assignee, or a Mortgage Loan Servicer”

The Supreme Court of New York, Suffolk County, recently granted a foreclosing plaintiff summary judgment and held that plaintiff did not need to send a 90-day notice pursuant to RPAPL 1304 because plaintiff was not a lender, assignee, or mortgage loan servicer.  See NIC Holding Corp. v. Eisenegger, 59 Misc. 3d 1221(A) (N.Y. Sup. Ct. 2018). 

Third Circuit Holds One-Year FDCPA Statute of Limitations Begins to Run Upon Violation, Not When Consumer Discovers or Should Have Discovered It

In a decision contrary to the holdings of two other circuit courts, the United States Court of Appeals for the Third Circuit recently affirmed a district court’s decision and held that a plaintiff’s claim under the Fair Debt Collection Practices Act (“FDCPA”) was time barred because he brought his action more than one year after the violation occurred, despite the fact that he brought it within one year of discovering it.  See Rotkiske v. Klemm, 2018 WL 2209120 (3d Cir. May 15, 2018). 

New Jersey’s Department of Banking and Insurance Adopts New Mortgage Processing Requirements

Riker Danzig Partner Michael O’Donnell and associates Michael Crowley and Clarissa Gomez co-authored an article in the Spring 2018 issue of New Jersey Banker Magazine entitled “New Jersey’s Department of Banking and Insurance Adopts New Mortgage Processing Requirements.”  The article discusses two changes regarding residential mortgages and how these changes will affect residential lenders.   

Please note that the disclosure of mortgage loan application fees issue is still evolving.  After publication of this article, the Department of Banking and Insurance determined that the disclosures will not currently be mandatory and financial institutions are currently free to decide on their own whether to incorporate such disclosures in their forms.   

Click here to read the entire article.

Utah Appellate Court Holds Use Restrictions Did Not Render Title Unmarketable, but Reduction in Lot Size Would Be Covered Under Title Insurance Policy

A Utah appellate court recently held that use restrictions on an insured property did not render it unmarketable under the title insurance policy, but that damages caused because one of the insured lots overlapped with a neighboring parcel would be covered.  See Lauritzen v. First Am. Title Ins. Co., 2018 WL 1663285 (Utah Ct. App. Apr. 5, 2018).

Eighth Circuit Holds Borrower Did Not Suffer Damages Because of Servicer’s RESPA Violation

The United States Court of Appeals for the Eighth Circuit recently reversed a district court and held that a borrower failed to prove he suffered damages caused by the servicer’s violation of the Real Estate Settlement Procedures Act (“RESPA”) and, as such, failed to establish an essential element of the claim.  See Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713 (8th Cir. 2018).