Sixth Circuit Holds Law Firm Liable Under the FDCPA for Not Cancelling Foreclosure Ads in Newspaper or Cancelling Foreclosure Sale Upon Receiving Letter Disputing Debt

The United States Court of Appeals for the Sixth Circuit recently reversed a lower court and held that a debt collector law firm violated the Fair Debt Collection Practices Act (“FDCPA”) when it did not stop foreclosure ads from appearing in the newspaper after it received a letter from the debtor disputing the debt.  See Scott v. Trott Law, P.C., 2019 WL 169237 (6th Cir. Jan. 11, 2019). 

Eleventh Circuit Reverses District Court, Allows RESPA Claim to Proceed

The United States Court of Appeals for the Eleventh Circuit recently reversed a lower court and held that the plaintiff borrowers were entitled to pursue their claims under the Real Estate Settlement Procedures Act (“RESPA”) based on a servicer’s alleged improper response to their QWR.  See Ranger v. Wells Fargo Bank N.A., 2018 WL 6523213 (11th Cir. Dec. 11, 2018).  In 2012, the lender initiated a foreclosure suit against the borrowers based on the servicer’s claim that the borrowers had missed their mortgage payments. 

Tenth Circuit Finds Title Agent Liable to Title Insurance Company For Removing Exception

The United States Court of Appeals for the Tenth Circuit recently held that a title agent was responsible for the entirety of a title insurance company’s loss after the agent removed an exception from a policy without the company’s consent.  See Fid. Nat'l Title Ins. Co. v. Pitkin Cty. Title, Inc., 2019 WL 315328 (10th Cir. Jan. 23, 2019).  Fidelity National Title Insurance Company (“Fidelity”) underwrote title insurance policies issued by Pitkin County Title, Inc. (“Pitkin”) pursuant to an agency agreement between the parties. 

Maryland Federal Court Dismissed RESPA Kickback Action Because Consumers Did Not Suffer Any Injury and Limitations Period Had Run

The United States District Court for the District of Maryland recently dismissed an action under the Real Estate Settlement Procedures Act (“RESPA”) because plaintiffs were not injured and because the statute of limitations had run.  See Baehr v. Creig Northrop Team, P.C., 2018 WL 6434502 (D. Md. Dec. 7, 2018).  Plaintiffs purchased their home in July 2008.   Unbeknownst to them, the real estate agents they used had a marketing and services agreement (“MSA”) with a title agency (“Lakeview”) that designated Lakeview as their “exclusive preferred settlement and title company” in exchange for payments of $6,000 per month.  

New York DFS Fines Servicer $100,000 For Failing to Register and Maintain Abandoned Properties

New York’s Department of Financial Services (the “DFS”) recently entered a consent order fining a mortgage loan servicer (“SN”) $100,000 for failing to register and maintain two abandoned properties.  See In re: SN Servicing Corporation, (Jan. 14, 2019).  Under the Abandoned Property Relief Act (the “Act”), lenders and servicers with first mortgage liens on vacant or abandoned residential properties are required to register, secure and maintain these properties.  See RPAPL §§ 1308, 1310.  Failure to comply could result in fines of up to $500 per day per property. 

New York Appellate Court Dismisses Claim Against Bona Fide Purchasers

New York’s Second Department Appellate Division recently held that the purchasers of a property were bona fide purchasers for value despite the filing of a notice of pendency on the property because of the death of the prior owner.  See Caldara v. Monti, 165 A.D.3d 1219 (2d Dept. 2018).  Plaintiff brought an action against the decedent in 2015 in which he sought specific performance of a real estate contract.

Eleventh Circuit Holds Florida Statute Cured Deficient Deed and Blocked IRS’s Attempt to Foreclose on Property

The United States Court of Appeals for the Eleventh Circuit recently reversed a lower court and held that a Florida statute cured an improperly-witnessed deed and prevented the IRS from foreclosing on the property.  See Saccullo v. United States of Am., 2019 WL 168217 (11th Cir. Jan. 11, 2019).  In 1998, the owner of a property executed a deed conveying the property to a trust for the benefit of his son. 

Fifth Circuit Affirms Dismissal of RESPA Claims, Holds Lender Not Vicariously Liable for Servicer’s Actions

The United States Court of Appeals for the Fifth Circuit recently held that a borrower’s claim against a lender under the Real Estate Settlement Procedures Act (“RESPA”) was properly dismissed because the lender could not be held vicariously liable for the servicer’s alleged violation.  See Christiana Tr. v. Riddle, 2018 WL 6715882 (5th Cir. Dec. 21, 2018).  In the case, the borrower defaulted on her mortgage and the lender brought a foreclosure action.  The borrower counterclaimed and alleged a violation of RESPA, among other things.  

New Jersey Appellate Court Holds Evidentiary Hearing Necessary to Determine Whether Statute of Limitations Should Be Tolled in Action Regarding Title to Property

New Jersey’s Appellate Division recently reversed a lower court and held that an evidentiary hearing was necessary to determine whether the statute of limitations should be tolled in a case in which plaintiffs allege that defendant defrauded them out of title to a property over 20 years earlier.  See Benipal v. Tri-State Petro, Inc., et al., A-0894-17T3 (N.J. Super. Ct. App. Div. Jan. 4, 2019). 

New Jersey Appellate Court Holds 2011 Amendment of Construction Lien Law Regarding Authorized Signatory of Claim Forms Does Not Apply Retroactively

New Jersey’s Appellate Division recently held that the 2011 amendment to the Construction Lien Law (the “CLL”) regarding the proper signatory to a construction lien claim does not apply retroactively and that the amendment could not be used by a claimant to validate claims it filed in 2008.  See Diamond Beach, LLC v. Mar. Assocs., Inc., 2018 WL 6729724 (N.J. Super. Ct. App. Div. Dec. 24, 2018).