Florida Court Applying New York Law Holds Purchase & Sale Agreement of Future Receivables Not Usurious Loan Despite Personal Guarantees

A Florida court recently applied New York law and held that a purchase & sale agreement of a pharmacy’s future receivables could not be voided as a usurious loan even though the pharmacy’s principals signed personal guarantees securing the agreement.  See EBF Partners, LLC v Burklow Pharmacy, Inc., 2018 WL 6620582 (Fla.Cir.Ct. 2018).  In the case, plaintiff paid the defendant pharmacy $425,000 to purchase $586,500 of future receivables.  In connection with the agreement, the pharmacy’s principals signed personal guarantees.

New York Court Denies Motion to Extend Lapsed Notice of Pendency

The New York Supreme Court, Kings County, recently denied a party’s motion to extend a notice of pendency, finding that the party had let a prior notice expire and the party was barred from filing a new notice despite the fact that there had been a substitution of parties in the action.  See 25-35 Bridge St. LLC v. Excel Auto. Tech Ctr. Inc., 62 Misc. 3d 1210(A) (N.Y. Sup. Ct. 2019). 

New Jersey Appellate Court Holds County Recorders Are Not Authorized to Charge a Convenience Fee for Electronic Recording

In a decision approved for publication, New Jersey’s Appellate Division held on February 11, 2019 that county registers or clerks may not “charge a ‘convenience fee’ for the electronic filing of documents concerning real property.”  See New Jersey Land Title Ass’n v. Rone, 2019 WL 508858 (N.J. Super. Ct. App. Div. Feb. 11, 2019). 

Virginia Federal Court Denies Title Agent’s Motion to Dismiss Title Insurer’s Action

The United States District Court for the Western District of Virginia recently denied a title agent’s motion to dismiss a claim brought by Stewart Title Guaranty Company (“Stewart”) for the breach of an agency agreement and, in doing so, did not accept the agent’s argument that the underlying claims should have been excluded under Exclusion 3(a).  See Stewart Title Guar. Co. v. Closure Title & Settlement Co., LLC, 2019 WL 97045 (W.D. Va. Jan. 3, 2019).  In the case, the agent issued two title insurance policies for the same lender to secure first priority deeds of trusts on two properties. 

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.