Posts from February 2014.

Cataldi v. New York Community Bank (N.D. GA Feb. 3, 2013) (Loss Mitigation & Dual Tracking)

This action involves one of the first decisions issued pursuant to the new mortgage servicing regulations under the "Dodd-Frank Wall Street Reform Act and Consumer Protection Act." Plaintiff sought injunctive relief for violation of the Act, including a claim that the Defendant did not fairly offer and negotiate loss mitigation options and pursued "dual track" foreclosure. The facts established that the parties engaged in modification negotiations, that one or more modifications ...

The Eleventh Circuit Court of Appeals held in Faire Feaz v. Wells Fargo Bank, N.A., et al., No. 13-10230 (11th Cir. Feb. 10, 2014), that a lender may require a borrower who has a federally-insured mortgage to obtain more flood insurance than the amount required under federal law. Feaz had obtained a mortgage loan that was guaranteed by the Federal Housing Administration ("FHA"). Feaz's mortgage contained the following covenant, which is required by federal law for all FHA-guaranteed mortgages:

Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the ...

In Gruber v. Creditors' Protection Service, Inc., --- F.3d ---, 2014 WL 292086 (7th Cir. 2014), the Seventh Circuit Court of Appeals recently held that letters directing consumers to request verification rather than dispute the debt did not violate the FDCPA. The Seventh Circuit also held that the phrase "[w]e believe you want to pay your just debt" was mere puffery and did not violate the FDCPA. Plaintiffs filed lawsuits against separate defendants alleging that debt collection letters violated the FDCPA because they did not contain adequate notice required by section ...

In Richardson v. Wells Fargo, N.A., No. 13-10002 (5th Cir. 2014), the United States Court of Appeals for the Fifth Circuit held that motions for attorney's fees provided by contract are permissible in accordance with Fed. R. Civ. P. 54(d)(2). This rule provides that "a claim for attorney's fees and related nontaxable expenses must be made by motion unless the substantive law requires those fees to be proved at trial as an element of damages." Plaintiff Pamela Richardson obtained a loan from Wells Fargo to refinance the mortgage on her property. Plaintiff secured the debt with a deed of ...

The Connecticut Court of Appeals recently found that the prohibition of yield spread premiums in the Dodd-Frank Act did not establish a per se violation of a fraud claim under the Connecticut Unfair Trade Practices Act ("CUTPA"). In CitiMortgage, Inc. v. Coolbeth, --- A.3d ---, 2013 WL 6448883 (Conn. Ct. App. Dec. 17, 2013), CitiMortgage filed a foreclosure action against the defendant mortgagors. The mortgagors filed special defenses and a counterclaim alleging that the mortgage broker falsely represented a higher interest rate, that CitiMortgage paid the mortgage broker a ...

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