The New York Supreme Court, Kings County, recently found that a notice sent by a mortgagee which reinstitutes monthly payments and states that any prior acceleration is revoked is sufficient to constitute a deceleration of the underlying loan. Carter v. U.S. Bank Trust, N.A., 2021 WL 291198 (N.Y. Sup. Ct. Jan 27, 2021).
The New York Appellate Division, Second Department, recently held that a title insurance company has no duty to defend or indemnify its insured for an adverse possession action brought against the insured, citing the title policy’s parties in possession exception. See Melamed v. First Am. Title Ins. Co., 190 A.D.3d 724 (2d Dept. 2021).
The Maryland Court of Special Appeals recently reversed a lower court and held that a right of access provision in a title insurance policy ensures only legal access and does not include reasonable or vehicular access. See Chicago Title Insurance Co. v. Allynnore N. Jen, 2021 WL 286073 (Md. Ct. Spec. App. Jan. 28, 2021).
In a ground-breaking case for lenders, the New York Court of Appeals recently added critical guidance and comfort for lenders as to what constitutes a proper de-acceleration of a loan after the filing of a foreclosure complaint. Namely, the Court of Appeals held that where the acceleration of a loan is triggered by the filing of a foreclosure complaint, a noteholder’s voluntary discontinuance of that action serves to revoke that acceleration unless it is accompanied by an “express, contemporaneous statement to the contrary,” and resets the six-year statute of limitations period for New York foreclosure actions.
In a decision approved for publication, the New Jersey Appellate Division recently found that actual knowledge is not a bar to the doctrine of equitable subrogation for a lender who paid off a prior mortgage but failed to discharge an intervening lien. See New York Mortg. Tr. 2005-3 Mortg.-Backed Notes, U.S. Bank Nat’l Ass’n as Tr. v. Deely, 2021 WL 520063 (N.J. Super. Ct. App. Div. Feb. 12, 2021).
The Texas Supreme Court recently held that a lender could still foreclose on a mortgage under the doctrine of equitable subrogation, even if it brought the foreclosure after the limitations periods had passed. See PNC Mortg. v. Howard, 2021 WL 297579 (Tex. Jan. 29, 2021). In 2003, defendants purchased a home with loans secured by two mortgages.
The Third Circuit recently vacated a District Court decision and held that a rebuttable presumption of fraud is created under the Uniform Fraudulent Transfer Act (UFTA) when certain badges of fraud are found. MSKP Oak Grove, LLC v. Venuto, 2020 WL 7496512 (3d Cir. Dec. 21, 2020). Appellants were the landlords and creditors of a Florida location of a chain of tanning salons, the parent company of which (Appellee-Debtors, along with the four individual family members who owned all the company’s shares) sold the majority of its assets in 2007.
The United States Court of Appeals for the Seventh Circuit recently declined to address whether a FDCPA action should have been sent to arbitration, instead finding that plaintiff lacked standing and dismissing the case entirely. See Nettles v. Midland Funding LLC, 983 F.3d 896 (7th Cir. 2020).
The United States District Court for the Central District of California recently held that plaintiffs, who assisted clients in obtaining PPP loans from the defendant lenders, did not have a private right of action against the defendants for agent fees. See Am. Video Duplicating Inc. v. Citigroup Inc., 2020 WL 6712232 (C.D. Cal. Nov. 16, 2020). In the case, plaintiffs, who included accountants and other consultants, assisted their clients in obtaining PPP loans from defendants.
Automatic Stay Not Violated by Retention of Property Seized Before Filing
The United States Supreme Court recently held that 11 U.S.C. § 362(a)(3), a provision of the automatic stay of the U.S. Bankruptcy Code, does not require creditors to take affirmative steps to return property that was seized before the filing of a debtor’s bankruptcy petition. City of Chicago, Illinois v. Fulton, 2021 WL 125106, ____ U.S. ____ (Jan. 14, 2021).