Georgia Federal Court Dismisses Some of the CFPB’s Claims for Willful Discovery Violations

The United State District Court for the Northern District of Georgia recently dismissed some of the Consumer Financial Protection Bureau’s (“CFPB”) claims against debt collectors because of the CFPB’s willful violations of the Court’s discovery orders.  See Consumer Fin. Prot. Bureau v. Universal Debt Sols., LLC, 2017 WL 3887187 (N.D. Ga. Aug. 25, 2017).  The CFPB brought an action against a number of debt collectors for a “massive debt-collection scheme” through which the defendants “allegedly used the telephone broadcast services of [one defendant] to broadcast millions of threatening and false statements to consumers in telephone calls and messages.” 

New York Federal Court Holds Pre-Foreclosure Notice Is Not Subject to FDCPA

The United States District Court for the Eastern District of New York recently held that a mortgagee’s pre-foreclosure notice to a homeowner did not violate the Fair Debt Collection Practices Act (“FDCPA”) because it was not an attempt to collect a debt.  See Carbone v. Caliber Home Loans, Inc., 2017 WL 4157265 (E.D.N.Y. Sept. 19, 2017).  In the case, plaintiff and her husband fell behind on their mortgage payments and defendant mortgagee sent them a pre-foreclosure notice as required under New York law. 

CFPB Enters Consent Order with Title Agency for Failure to Disclose Affiliated Business Arrangement with Underwriter

The Consumer Financial Protection Bureau (“CFPB”) recently entered into a consent order with Meridian Title Corporation (“Meridian”) for alleged violations of the Real Estate Settlement Procedures Act (“RESPA”) based on Meridian’s alleged failure to disclose an affiliated business arrangement with a title insurance underwriter.  See In the Matter of Meridian Title Corp., 2017-CFPB-0019 (Sept. 27, 2017).  According to the consent order, Meridian is a settlement agent and title insurance agency that issues title insurance policies and conducts loan closings.

Mississippi Appeals Court Holds Beneficiary of Deed of Trust Has Priority Over Prior Deed of Trust Because the Prior Deed of Trust Lacked a Named Beneficiary

In an action brought by plaintiff, a beneficiary under a subsequent deed of trust, seeking a declaration that it had first priority to property over that of the beneficiaries under a prior deed of trust that originally lacked a named beneficiary, the Court of Appeals of Mississippi recently affirmed the chancery court’s grant of summary judgment in favor of plaintiff, holding that while the prior deed of trust was not void for initially lacking a named beneficiary, plaintiff’s affidavit in support of its motion precluded a fact issue as to whether its predecessor-in-interest had actual notice of defendants’ prior deed of trust.

California Appellate Court Affirms Judgment for Title Insurer After Insured Conveyed Its Interest in Foreclosure Sale

In an action brought by foreclosure sale purchasers against the foreclosing bank’s title insurer based on the title insurer’s refusal to defend and indemnify the bank in an underlying action, the California Court of Appeal, Fifth District, recently affirmed summary judgment in favor of the title insurer finding, among other things, that coverage under the policy had terminated upon the conveyance of the property at the foreclosure sale.  See Hovannisian v. First Am. Title Ins. Co., 14 Cal. App. 5th 420 (Ca. Ct. App. 2017).

Maryland Federal Court Holds Insured Lender’s Late Notice Barred Title Insurance Claim

The United States District Court for the District of Maryland recently held that an insured lender’s title insurance claim was barred because the insured did not provide notice of the claim to the title insurance company until after the property was sold in a foreclosure sale. See Wells Fargo Bank, N.A., as Trustee for Soundview Home Loan Trust 2007-OPT1, Asset-Backed Certificates, Series 2007-OPT1, 2017 WL 3868693 (D. Md. Sept. 5, 2017). In 1994, the borrowers obtained a loan that was secured by a deed of trust on their home. 

Arizona Court of Appeals Affirms Summary Judgment for Mortgagee Under Replacement Doctrine, but Reverses Application of Equitable Subrogation

In an action regarding lien priority between two lenders, the Court of Appeals of Arizona recently affirmed the trial court’s application of the replacement doctrine and concluded that plaintiff’s deed of trust takes priority over defendant’s deed of trust, but reversed the trial court’s application of the doctrine of equitable subrogation in favor of plaintiff, on the grounds that plaintiff’s predecessor in interest had actual knowledge of defendant’s junior lien but failed to take the proper steps to ensure it was satisfied and released.  See US Bank, N.A. v. JPMorgan Chase Bank, N.A., 398 P.3d 118 (Ariz. Ct. App. 2017).

New Jersey’s Appellate Division Affirms Trial Court’s Decision That Lender Was Entitled to Equitable Subrogation and Spouse Ratified Mortgage

The New Jersey Appellate Division recently affirmed a lower court’s decision that a lender would be equitably subrogated to the position of an earlier mortgage despite the mortgagee’s spouse’s claim that she was unaware of any mortgage, and that the spouse had ratified the mortgage.  See Reibman v. Myers, 164 A.3d 1080 (N.J. Super. Ct. App. Div. 2017).  In the case, plaintiff’s father-in-law purchased a house for plaintiff and her husband in 2001, and plaintiff contributed some of the down payment.

Florida Federal Court Holds Insured’s Bad Faith Claim Is Premature

The United States District Court for the Middle District of Florida recently held that an insured’s bad faith claim must be abated because the insured had not yet prevailed on its underlying breach of contract claim.  See Stewart Title Guar. Co. v. Machado Family Ltd. P’ship No. 1, 2017 WL 3622006 (M.D. Fla. Aug. 23, 2017).  In the case, the insured was the assignee of a title insurance policy and a mortgage on a 1,300-acre property in Central Florida.