Third Circuit Finds That Each Separate Mortgage Payment That Resulted in a Kickback Constitutes a Separate RESPA Violation for Limitations Purposes, But That Prior Class Action Did Not Toll Limitations Period for New Class Action

The United States Court of Appeals for the Third Circuit recently affirmed the dismissal of a Real Estate Settlement Procedures Act (“RESPA”) kickback claim, holding that a 2011 class action in California did not toll the limitations period for this new class action making the same allegations.  See Blake v. JP Morgan Chase Bank NA, 927 F.3d 701 (3d Cir. 2019).  In the case, the two plaintiffs took out mortgages from the defendant lender in 2005 and 2006.  In 2013, they brought this class action alleging that defendant violated RESPA by referring them to mortgage insurers in exchange for kickbacks.  

Eleventh Circuit Affirms Dismissal of RESPA Claims, Holds Servicer Not Required to Cancel Foreclosure Sale Once Borrower Entered Modification Plan

The United States Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a Real Estate Settlement Procedures Act (“RESPA”) claim against a servicer, finding that the servicer did not violate RESPA by rescheduling, rather than canceling, a foreclosure sale after the borrower entered into a loan modification plan.  See Landau v. RoundPoint Mortg. Servicing Corp., 925 F.3d 1365 (11th Cir. 2019). 

New Jersey Federal Court Denies Motion to Dismiss RESPA Claim

The United States District Court for the District of New Jersey recently denied a loan servicer’s motion to dismiss a borrower’s claim that the servicer violated the Real Estate Settlement Procedures Act (“RESPA”) by failing to properly respond to the borrower’s loss mitigation applications and Notice of Error.  See Grembowiec v. Select Portfolio Servicing, Inc., 2019 WL 3183588 (D.N.J. July 16, 2019).  In May 2018, the plaintiff borrower submitted a loss mitigation application to the defendant servicer.  Defendant responded and informed plaintiff that the submitted documents were insufficient.  Although plaintiff sent additional documents, defendant later sent another letter saying the application had been terminated because there had been no activity on the file. 

New Jersey Appellate Court Finds Later-Executed but First-Recorded Mortgage Not Entitled to Priority When Lender Could Not Produce Origination File

The New Jersey Appellate Division recently found that a subsequent lender’s inability to produce its origination file resulted in a negative inference that the lender had knowledge of a previously-executed mortgage, despite the fact that the subsequent lender’s mortgage was recorded first.  See Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not in its individual capacity, but solely as Trustee for BCAT 2015-14BTT, v. 61 Holdings, LLC, 2019 WL 3063740 (N.J. Super. Ct. App. Div. July 12, 2019).

D.C. Circuit Holds Discovery Rule May Have Applied to Toll Limitations Period for Title Insurer’s Claim Against Surveyors

The United States Court of Appeals for the D.C. Circuit recently reversed a lower court and held that a title insurance company’s negligence claims against property surveyors may have been tolled until the insurer or its insured discovered the encroachment at issue.  See Commonwealth Land Title Ins. Co. v. KCI Techs., Inc., 922 F.3d 459 (D.C. Cir. 2019). 

New York Federal Court Grants Debtor Summary Judgment in FDCPA Action When Debt Collector Failed to Notify Debtor That Interest Would Accrue

The United States District Court for the Eastern District of New York recently found that a debt collector violated the Fair Debt Collection Practices Act (“FDCPA”) by sending a letter that offered settlement amounts if plaintiff paid by a certain date, but did not state that the debt would continue accruing interest and/or fees if plaintiff did not pay those amounts by the specified dates. 

New York Court Holds Bank Selling a Property Did Not Violate Insurance Law by Requiring Property Purchaser to Obtain Title Insurance from a Specific Title Insurer

New York’s Second Department Appellate Term recently held that a bank did not violate Insurance Law § 2502(a)(2) when it required a property purchaser to obtain title insurance from a particular insurer because the bank was acting as a seller, not a lender.  See Wenig Saltiel, LLP v. Specialized Loan Servicing, LLC, 63 Misc. 3d 152(A) (N.Y. App. Term. 2019).

New Jersey Appellate Court Holds No Presumptive Rule that Materials Prepared for a Coverage Investigation Are Not in “Anticipation of Litigation”

The New Jersey Appellate Division recently reversed a lower court and held that there is no presumptive rule that materials prepared or collected for an insurance coverage investigation are not privileged work-product prepared in “anticipation of litigation.”  See Paladino v. Auletto Enter., Inc., 2019 WL 2375475 (N.J. Super. Ct. App. Div. June 6, 2019).  This is a significant decision for insurance underwriters as well as claims handlers.