Seventh Circuit Holds Debt Collector Did Not Violate FDCPA by Sending Motion Papers Directly to Represented Debtor in Compliance with State Rules

The United States Court of Appeals for the Seventh Circuit recently reversed a district court’s decision granting a debtor’s motion for summary judgment and held that the defendant debt collector did not violate the Fair Debt Collection Practices Act (“FDCPA”) by sending motion papers directly to the debtor when the debtor was represented by an attorney who had not filed a notice of appearance.  See Holcomb v. Freedman Anselmo Lindberg, LLC, 2018 WL 3984544 (7th Cir. Aug. 21, 2018). 

Massachusetts Federal Court Dismisses Borrower’s Wrongful Foreclosure and Predatory Lending Claims

The United States District Court for the District of Massachusetts recently dismissed a borrower’s complaint against a lender, finding that the lender did not wrongfully foreclose on the borrower or engage in predatory lending.  See Healy v. U.S. Bank, N.A. for LSF9 Master Participation Tr., 2018 WL 3733934 (D. Mass. Aug. 3, 2018).  In the case, the borrower executed a loan agreement secured by a mortgage on his house in 2004.  In 2013, he defaulted on the loan, and the note and mortgage were assigned to the defendant lender thereafter. 

New Jersey Appellate Court Holds Business Judgment Rule Protects Decisions of Common-Interest Community Board in Adopting and Enforcing Building Height Restrictions

In a decision approved for publication, New Jersey’s Appellate Division recently held that the business judgment rule protected the actions of a common-interest community’s board of trustees in rejecting certain residents’ requests to elevate their homes higher than the board’s regulations allowed after Superstorm Sandy. See Alloco v. Ocean Beach & Bay Club, 2018 WL 3999039 (N.J. Super. Ct. App. Div. Aug. 22, 2018). The decision is significant in limiting challenges to a board’s action to grounds of fraud, self-dealing or unconscionability.

New York Federal Court Holds County Tax Foreclosure May Constitute Fraudulent Conveyance

The United States District Court for the Western District of New York recently reversed a Bankruptcy Court’s dismissal of an action and held that sales arising from tax foreclosures may be avoidable as fraudulent transfers.  See Hampton v. Ontario Cty., New York, 2018 WL 3454688 (W.D.N.Y. July 18, 2018).  The case involves two adversary proceedings commenced by homeowners against the County of Ontario (the “County”).  In each matter, the County foreclosed on plaintiffs’ homes after plaintiffs failed to pay property taxes.

Rhode Island Supreme Court Holds Lender Entitled to Summary Judgment in Attorney Defalcation Case

The Rhode Island Supreme Court recently affirmed the granting of a lender’s motion for summary judgment, holding that a settlement agent’s defalcation of loan funds was outside the scope of his agency and that the lender could not be held liable for the same.  See Pineda v. Chase Bank USA, N.A., 186 A.3d 1054 (R.I. 2018).  In 2008, the plaintiff borrower entered into a refinancing agreement with the defendant lender whereby the lender agreed to issue two loans that would pay off existing mortgages on the borrower’s properties.

Eighth Circuit Affirms Dismissal of Borrowers’ Lawsuit, Holds Deadline to File Lis Pendens and Challenge Sale of Home Could Not Be Extended

The United States Court of Appeals for the Eighth Circuit recently held that the plaintiff borrowers’ action challenging the sheriff's sale of their home was properly dismissed when they failed to file a lis pendens within the redemption period, and that this deadline could not be extended.  See Litterer v. Rushmore Loan Mgmt. Servs., LLC for U.S. Bank Nat’l Ass’n, 894 F.3d 1274 (8th Cir. 2018).

Indiana Appellate Court Holds Title Insurance Company Not Liable For Negligent Misrepresentation

The Indiana Court of Appeals recently held that an insured’s negligent misrepresentation claim against a title insurance company was properly dismissed because the insured’s claims were limited to the title insurance policy.  See Pearman v. Stewart Title Guar. Co., 2018 WL 3132451 (Ind. Ct. App. June 27, 2018).  In the case, the plaintiff insured purchased three lots for $5,000, and the defendant title insurance company issued a title insurance policy with regard to the properties.

California Federal Court Holds Borrowers Adequately Alleged RESPA Claim but Were Not Entitled to Restraining Order Enjoining the Sale of Their Property

The United States District Court for the Northern District of California recently held that borrowers had adequately alleged that their servicer violated the Real Estate Settlement Procedures Act (“RESPA”) but nonetheless that they were not entitled to a temporary restraining order enjoining the sale of their property.  See Sparks-Magdaluyo v. New Penn Financial, LLC, 2018 WL 3537188 (N.D. Cal. July 23, 2018). 

New Jersey Federal Court Denies Reconsideration Motion, Holds Debt Collector May Have Violated FDCPA by Threatening Litigation

The United States District Court for the District of New Jersey recently denied a debt collector’s motion for reconsideration and held that the debt collector may have violated the Fair Debt Collection Practices Act (the “FDCPA”) by threatening litigation in an initial letter to a consumer when the debt collector always sent at least a second letter before bringing any action.  See Pollak v. Portfolio Recovery Assocs., LLC, 2018 WL 3105424 (D.N.J. June 25, 2018).