Articles Posted in Banking

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Plaintiff filed suit against Wells Fargo, alleging that the foreclosure sale of his house was invalid under the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. 3953(a), 3953(c), which requires a lender to obtain a court order before foreclosing on or selling property owned by a current or recent servicemember where the mortgage obligation "originated before the period of the servicemember's military service." The Fourth Circuit affirmed the district court's grant of summary judgment to Wells Fargo, holding that plaintiff's mortgage obligation originated when he was in the Navy, it was not a protected obligation under section 3953(a), and his later enlistment in the Army did not change that status to afford protection retroactively. View "Sibert v. Wells Fargo Bank, N.A." on Justia Law

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The Fourth Circuit affirmed the bankruptcy court's denial of Wells Fargo's motion to set aside the bankruptcy court's order. Wells Fargo filed the motion two years after the bankruptcy court cancelled its deed of trust covering a piece of real property, and several months after the property was sold in foreclosure to a bona fide purchaser for value. The court held that Wells Fargo failed to carry its burden under FRCP 60(b) by filing its motion within a reasonable time. Even if Wells Fargo did satisfy Rule 60(b)'s threshold requirements, it still did not meet the requirements of that Rule's enumerated sections for relief. View "Wells Fargo Bank, N.A. v. AMH Roman Two NC, LLC" on Justia Law

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Plaintiffs challenged the dismissal of their pro se complaint that, inter alia, sought a declaration that Chase and U.S. Bank could not foreclose on their home. The district court dismissed certain counts based on lack of subject matter jurisdiction under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), 12 U.S.C. 1821, and other counts for failure to state a claim. The court affirmed, concluding that the district court lacked subject matter jurisdiction over most of the counts (Counts 1, 2, 5-9, and 16-19) that plaintiffs appeal because they failed to exhaust their claims with the FDIC. The court further concluded that the other relevant counts for constructive fraud (Count 14) and negligence (Count 15) failed to state a claim. Finally, the district court did not abuse its discretion by not providing a reason for denying plaintiffs' requests to amend their complaint. View "Willner v. Dimon" on Justia Law

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Plaintiff filed suit for damages in connection with a $66,500 loan secured by a deed of trust on her house. Plaintiff alleged that, in the administration of and collection efforts on the loan, defendants violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq.; the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq.; and the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq. The district court dismissed plaintiff's FDCPA and TILA claims and, following discovery, granted Wells Fargo’s motion for summary judgment on her RESPA claim. The court concluded that plaintiff adequately alleged that the White Firm and the Substitute Trustees were “debt collectors,” as that term is used in the FDCPA. Therefore, the court reversed the order of dismissal of her FDCPA claims against them and remanded for further proceedings, without suggesting whether or not those defendants violated the FDCPA. The court affirmed as to the TILA claims. View "McCray v. Federal Home Loan Mortgage Corp." on Justia Law

Posted in: Banking, Consumer Law

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Plaintiff filed suit against Wells Fargo, alleging that his mortgage agreement, providing him with a loan far in excess of his home’s actual value, was an “unconscionable contract” under the West Virginia Consumer Credit and Protection Act, W. Va. Code 46A–1–101 et seq. The court agreed with the district court that the amount of a mortgage loan, by itself, cannot show substantive unconscionability under West Virginia law, and that plaintiff has not otherwise made that showing. The court concluded, however, that the Act allows for claims of “unconscionable inducement” even when the substantive terms of a contract are not themselves unfair. Accordingly, the court remanded so that the district court may consider this issue in the first instance. View "McFarland v. Wells Fargo Bank" on Justia Law

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The FDIC-R filed a civil action against several officers and directors of a North Carolina bank, Cooperative Bank, alleging that the officers and directors were negligent, grossly negligent, and breached their fiduciary duties, resulting in the failure of the Bank. On appeal, the FDIC-R argued that the district court erred in finding that North Carolina’s business judgment rule shields the officers and directors from allegations of negligence and breach of fiduciary duty, and that there was insufficient evidence to support claims of gross negligence. The court vacated the district court’s grant of summary judgment on the FDIC-R’s claims of ordinary negligence and breach of fiduciary duty as to the Officer Defendants because the court found that there is sufficient evidence to rebut the initial evidentiary presumption of the North Carolina business judgment rule; reversed and remanded the district court’s order denying as moot the FDIC-R’s cross-motion for summary judgment, as well as its order denying as moot the FDIC-R’s motion to exclude the declaration of Robert T. Gammill and the attached exhibits; and affirmed the district court’s judgment with respect to the remaining claims. View "FDIC v. Rippy" on Justia Law

Posted in: Banking

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Despite having only a few hundred dollars in her checking account at SunTrust Bank, Appellant cut herself a check for nearly $10,000, resulting in a sizable overdraft. SunTrust hired a Maryland law firm, Mitchell Rubenstein & Associates (MR&A) to bring a debt collection suit. MR&A filed suit on SunTrust’s behalf in a general district court in Virginia. The general district court entered judgment in favor of MR&A. Appellant subsequently filed a complaint against SunTrust and MR&A (collectively, Appellees), alleging that Appellees violated Maryland consumer protection laws and that MR&A violated the Fair Debt Collection Practices Act. The federal district court dismissed Appellant’s suit for failure to state a claim. The Fourth Circuit affirmed, holding that the district court did not err in finding that the counts alleged in Appellant’s complaint failed to state a claim for relief. View "Elyazidi v. SunTrust Bank" on Justia Law

Posted in: Banking, Consumer Law

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The Bank commenced this adversary proceeding in Restivo's Chapter 11 bankruptcy case, seeking a judgment declaring that the security interest it acquired on January 4, 2005, had priority over the IRS's tax lien filed on January 10, 2005, regardless of the fact that it did not record its security interest until after the IRS had filed notice of its tax lien. The district court granted the Bank priority. The court rejected the district court's holding that Md. Code. Ann., Real Prop. 3-201 gives the Bank retroactive priority over the IRS, concluding that 26 U.S.C. 6323(h)(1)(A)'s use of the present perfect tense precludes giving effect to the Maryland statute's relation-back provision. However, the court affirmed the judgment based on the ground that under Maryland common law, the Bank acquired an equitable security interest in the two parcels of real property on January 4, regardless of recordation, because its interest became protected against a subsequent lien arising out of an unsecured obligation on that date and that therefore its security interest had priority over the IRS's tax lien under sections 6323(a) and 6323(h)(1). View "Susquehanna Bank v. United States/Internal Revenue" on Justia Law

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Plaintiffs filed a class action suit against defendants, alleging that they violated Section 8 of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2607, by creating a joint venture (Prosperity) to skirt RESPA's prohibition on kickbacks while failing to disclose this business arrangement to its customers. The court concluded that the district court did not abuse its discretion denying plaintiffs' claims because plaintiffs' failed to move for judgment as a matter of law before the jury reached its verdict and because of the highly deferential lenses through which the court must review the issues before it. Accordingly, the court affirmed the judgment of the district court. View "Minter v. Wells Fargo Bank, N.A." on Justia Law

Posted in: Banking, Consumer Law

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Plaintiff filed suit against Nutter, alleging that Nutter was liable for conspiring with Savings First to violate the Maryland Finder's Fee Act, Md. Code Ann., Com. Law 12-801 to 12-809. Plaintiff borrowed from Savings First in a reverse mortgage transaction and then Nutter purchased the mortgage from Savings First. The court agreed with the district court that Nutter could not be a violator of section 12-804(e) because that statute regulates only mortgage brokers and Nutter was not a "mortgage broker" in the transaction. Accordingly, the court affirmed the district court's grant of summary judgment in favor of Nutter. View "Marshall v. James B. Nutter & Co." on Justia Law