New regulations will impose increased inspection, reporting, and maintenance obligations on mortgagees and servicers of defaulted residential mortgage loans in New York.  You can learn more about the regulations of the New York Department of Financial Services for “zombie” properties in Mayer Brown’s latest Legal Update.  The regulations become effective today, December 20, 2016.

On November 3, in a case that was closely watched by industry participants, the Florida Supreme Court held that a mortgagor’s default that occurs after the dismissal of a prior foreclosure action in which the loan payments were accelerated resets the five-year statute of limitations for filing a subsequent foreclosure suit.  In Bartram v. U.S. Bank, N.A., the court explained that dismissal of the initial foreclosure action has the effect of returning the parties to their pre-foreclosure complaint status, where the mortgage remains an installment loan and the mortgagor has the right to continue to make installment payments without being obligated to pay the entire amount due under the note and mortgage.
Continue Reading Florida Supreme Court Holds that Each Default Resets the Statute of Limitations for Filing a Foreclosure Complaint

On October 19, a divided Ninth Circuit ruled that a trustee of a deed of trust who takes action to initiate non-judicial foreclosure is not a “debt collector” under the Fair Debt Collection Practices Act (FDCPA). See Ho v. ReconTrust Co., NA, No., 10-56884 (9th Cir. Oct. 19, 2016).  The court reasoned that because the object of a non-judicial foreclosure is to retake and resell the property that secures a debt, as opposed to collecting money from the borrower, the trustee was not acting as a “debt collector” under the statute.  In further support of its conclusion, the court reasoned that holding otherwise would create a conflict between the trustee’s duties under state law and its obligations under the FDCPA.

In reaching this conclusion, the majority expressly rejected the position put forth by the Consumer Financial Protection Bureau (CFPB),
Continue Reading Ninth Circuit Rejects CFPB Amicus Position as Unpersuasive

Today, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit issued a ruling overturning a $109 million monetary penalty imposed by the Consumer Financial Protection Bureau (“CFPB” or “Bureau”).  The decision in PHH Corporation v. CFPB, written by Circuit Judge Brett Kavanaugh, addressed the unconstitutionality of the Bureau’s structure and its retroactive application of a new RESPA interpretation, and imposed RESPA’s three-year statute of limitations on the Bureau. 
Continue Reading Court Rejects CFPB’s RESPA Interpretation, Declares Single-Director Structure Unconstitutional

New regulations under the federal Military Lending Act (“MLA”) that become effective next week will prohibit consumer loans to covered US Service members if those loans have a “military annual percentage rate” (“MAPR”) greater than 36 percent. The Defense Department’s regulations will impose that MAPR limit on additional types of consumer credit transactions (beyond just

Several of Mayer Brown’s Consumer Financial Services partners will be featured at this month’s Regulatory Compliance Conference in Washington, DC, sponsored by the Mortgage Bankers Association.

On Sunday, September 18th, Kris Kully will participate in the Compliance Essentials Workshop outlining how the Dodd Frank Act changed the regulatory framework for mortgages.  This panel will

Until recently, Florida courts had not determined what happens to liens placed on a property between the time of final judgment of foreclosure and sale. On August 24, 2016, Florida’s Fourth Appellate District decided Ober v. Town of Lauderdale-by-the-Sea, which resolved the issue, holding that liens placed on the property after the final judgment of foreclosure but prior to judicial sale are not discharged by Florida’s lis pendens statute.
Continue Reading Florida Appeals Court Holds That Post-Foreclosure Judgment Liens Are Not Discharged At Sale

The Texas Constitution is strict about protecting the homestead. In fact, until 1997, the Texas Constitution did not permit home-equity loans to be secured by borrowers’ homesteads. Even now, home-equity liens are allowed only under certain conditions, among which is the requirement that a home-equity loan be made on the condition that the lender or holder will forfeit principal and interest if the loan is constitutionally noncompliant and the lender fails to cure particular issues, using one of six listed corrective actions, within 60 days of receiving notice of the violation from the homeowner.  On May 20, 2016, the Texas Supreme Court announced two decisions (Garofolo and Wood) that will significantly affect home-equity lending in Texas.
Continue Reading Recent Texas Supreme Court Decisions Affect Home-Equity Lending in Texas

The controversial decision in Madden v. Midland Funding, LLC, was “incorrect” and “reflects an unduly crabbed conception of [National Bank Act] preemption,” said the Solicitor General and the Office of the Comptroller of the Currency (“OCC”) in the amicus brief filed with the United States Supreme Court on Tuesday.  Still, the Solicitor General and the OCC advised the Court not to review the decision of the Second Circuit in Madden.  They concluded that this just isn’t the right case for the Court to resolve the important questions of whether and under what circumstances the National Bank Act preempts state usury laws for assignees of loans made by national banks.
Continue Reading Madden Update: Solicitor General Says the Second Circuit Got it Wrong—But that the Decision Should Still Stand for Now

Today, the Supreme Court issued its long-awaited decision in Spokeo, Inc. v. Robins.  In a win for the business community, the Court held that plaintiffs can’t satisfy Article III’s injury-in-fact requirement for standing to sue in federal court by merely alleging the violation of a statute, without any accompanying real-world injury.  For more details