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).

New Jersey Court Grants Lender Summary Judgment on Grounds of Estoppel, Ratification, Equitable Mortgage and Equitable Subrogation

In an opinion issued earlier this month in a case successfully argued by the firm’s Co-Managing Partner, Michael O’Donnell, the Superior Court of New Jersey, Chancery Division, Bergen County held that a property’s transfer to an LLC was not fraudulent, and that plaintiff Bank of America therefore could exercise the right of foreclosure because the mortgage was legal and, alternatively, the doctrines of ratification, equitable mortgage, and equitable subrogation would have applied.

Eighth Circuit Holds That Complaint Alleging That Law Firm Violated FDCPA by Attempting to Charge Compound Interest Should Not Be Dismissed

The United States Court of Appeals for the Eighth Circuit recently reversed a district court and held that a claim against a law firm should not be dismissed, finding that the firm may have violated the Fair Debt Collection Practices Act (the “FDCPA”) by seeking compound interest on a debt in violation of state law.  See Coyne v. Midland Funding LLC, 2018 WL 3423469 (8th Cir. July 16, 2018). 

New York Supreme Court Annuls Insurance Regulation 208

On July 5, 2018, Justice Rakower of the New York County Supreme Court issued a decision annulling the recently-enacted and controversial Insurance Regulation 208.  See New York State Land Title Association, Inc. v. New York State Department of Financial Services, 2018 WL 3306755 (N.Y. Sup. Ct. July 5, 2018).  The New York State Department of Financial Services (“DFS”) issued the regulation after purportedly finding that title insurance companies, title agents, and title insurance closers employed practices that resulted in higher premiums and closing costs for consumers.