New Jersey Appellate Division Affirms Dismissal of Plaintiff’s Fraudulent Transfer Claim Against Title Agent and Title Insurance Company

The Superior Court of New Jersey, Appellate Division, recently affirmed the trial court’s grant of summary judgment dismissing plaintiff’s complaint against multiple defendants, including the title agent and title insurance company, alleging fraudulent transfer of title to realty, holding that “one, who knows a deed transferring her ownership in property has been filed, but declines to repudiate that conduct and also acts to later approve the conduct and benefits from same, has ratified the conduct and loses the right to challenge the forgery.”

Supreme Court Holds That Purchaser of Defaulted Debt Is Not “Debt Collector” Under FDCPA

In a significant decision for banks and the lending industry as a whole, the United States Supreme Court recently clarified that purchasing and collecting defaulted debt does not make an entity a “debt collector” under the Fair Debt Collection Practices Act (“FDCPA”). See Henson v. Santander Consumer USA Inc., 2017 WL 2507342 (U.S. June 12, 2017). In the case, plaintiffs received and later defaulted on auto loans from CitiFinancial Auto. Santander bought the defaulted debt on these loans from CitiFinancial and attempted to collect for itself. 

Florida District Court Dismisses Plaintiff’s Complaint Alleging Violations of RESPA Due To Lack Of Article III Standing In Light Of Plaintiff’s Failure To Allege Actual Damages

The United States District Court, Middle District of Florida, recently granted defendant loan servicer’s motion to dismiss plaintiff’s complaint alleging violations of the Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq. (“RESPA”), on the ground that plaintiff failed to allege any concrete injury.  Chadee v. Ocwen Loan Servicing, LLC, 2017 WL 1050386 (M.D. Fla. 2017). 

New Jersey Appellate Division Holds Foreclosing Lender Who Simply Winterized and Secured a Condominium Is Not a Mortgagee in Possession and Not Responsible for Condominium Association Fees

In a noteworthy decision for New Jersey lenders approved for publication, the New Jersey Appellate Division recently held that a lender who simply winterizes and secures an abandoned property in foreclosure is not deemed a mortgagee in possession subject to condominium association fees. See Woodlands Cmty. Ass’n, Inc. v. Mitchell, 2017 WL 2437036 (N.J. Super. Ct. App. Div. June 6, 2017). In Mitchell, the borrower defaulted on his loan with the lender and abandoned his condominium. The lender commenced a foreclosure action and then winterized the property and changed the locks.

Michigan District Court Dismisses Plaintiff’s Wrongful Foreclosure Action for Failure to State a Claim

The United States District Court for the Eastern District of Michigan recently dismissed plaintiff debtor’s complaint seeking to have the foreclosure and sheriff’s sale set aside, on the grounds that plaintiff failed to state a wrongful foreclosure claim based on only allegations of 12 C.F.R. 1024.41(g) (“Regulation X”) violations, and holding that “to find that Plaintiff has made out a state-law wrongful foreclosure case using only allegations of Regulation X violations would amount to the creation of a hybrid remedy where neither state law nor federal law has provided for one.”

New York Federal Court Dismisses Mortgagee’s Complaint and Holds Citizenship of Nominal Defendant MERS Cannot Be Controlling for Diversity Jurisdiction Purposes

In an action filed by plaintiff mortgagee in federal court purportedly under diversity jurisdiction, the United States District Court for the Northern District of New York denied plaintiff’s motion for default judgment and, instead, sua sponte dismissed the complaint for lack of subject matter jurisdiction. 

Supreme Court Holds That Filing of Bankruptcy Claim on Time-Barred Debt Does Not Violate FDCPA

The United States Supreme Court recently held that a creditor who files a bankruptcy claim on a time-barred debt does not violate the Fair Debt Collection Practices Act (“FDCPA”).  See Midland Funding, LLC v. Johnson, 137 S. Ct. 1407 (2017).  In the case, the debtor filed for bankruptcy under Chapter 13 of the Bankruptcy Code, and the creditor filed a proof of claim asserting that it was owed credit card debt.  However, the credit card had not been used in over ten years, outside Alabama’s six-year statute of limitations. 

New York District Court Holds Plaintiff’s Failure To Properly File the Statutorily Required Notice of Pendency Warrants Denial of Motion For Default Judgment

The United States District Court, Northern District of New York, recently denied plaintiff’s motion for default judgment and for judgment of foreclosure and sale of certain property, finding plaintiff’s notice of pendency to be ineffective and, therefore, void.  See Ditech Financial LLC v. Frantz, 2017 WL 1184206 (N.D.N.Y. March 29, 2017).

New York State Court Discharges and Cancels Mortgage Which Plaintiff Sought to Foreclose Due to Plaintiff’s Wrongful Conduct

The Supreme Court of New York, Tompkins County, recently granted the “drastic remedy” of dismissing plaintiff bank’s residential foreclosure action against defendant debtors, cancelling the notice of pendency filed in the action and discharging and cancelling the mortgage which plaintiff sought to foreclose, all because of plaintiff’s “pattern of conduct which gave rise to an inference of willfulness.”