Second Circuit Rules Homeowners Established Article III Standing for Statutory Damages Claim

On May 10, 2021, ruling on an issue of first impression, the U.S. Court of Appeals for the Second Circuit in Maddox v. Bank of New York Mellon Trust affirmed denial of BNY Mellon's motion for judgment on the pleadings, finding that plaintiffs have Article III standing to sue over the alleged violation of legal interests created by New York State statute. The ruling has important implications for mortgage lenders and their servicers. More ›

Federal Court Rules That CDC Exceeded its Authority with Nationwide Eviction Moratorium

On May 5, 2021, the U.S. District Court for the District of Columbia struck down the Centers for Disease Control and Prevention's nationwide eviction moratorium. According to the court, the CDC exceeded the scope of its authority under the Public Health Services Act, 42 U.S.C. § 264(a) (PHSA) when it enacted the "Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19" (CDC Order). The decision could have wide-reaching ramifications and set a precedent for challenges to various eviction and foreclosure moratoriums across the country. More ›

SCOTUS Narrows Autodialer Definition under the TCPA

We analyze in this client advisory the recent decision by a unanimous U.S. Supreme Court to narrow the definition of what constitutes an automatic telephone dialing system, or autodialer. Our analysis includes a take on the potential impacts of the decision, as well as the significance of a Democratic Party-controlled FCC. We note that the TCPA has not gone away and callers should continue to carefully consider how best to comply with its provisions to avoid further litigation and regulatory risk.

New York Court of Appeals Decision Clarifies RPAPL Notice Requirements, Affirms Heightened Standard for Borrowers

Last year, as we reported, the Second Circuit requested that the New York Court of Appeals rule on two certified questions concerning predicate notices in foreclosure actions. On March 30, 2021, the Court of Appeals issued its decision in Schiffman on the questions certified by the Second Circuit concerning New York Real Property Actions and Proceedings Law (RPAPL) §§ 1304 (90-day predicate notice) and 1306 (pre-foreclosure filing with the superintendent of banks). More ›

CFPB Signals Change by Rescinding Abusive Acts or Practices Policy, With Confirmation of Chopra Likely to be Delayed

On March 11, 2021, the Consumer Financial Protection Bureau (CFPB) announced rescission of its January 24, 2020 Statement of Policy Regarding Prohibition on Abusive Acts or Practices (Policy). In announcing its rescission, the Bureau indicated the Policy did not provide the intended clarity to regulated entities, and declared it inconsistent with the Dodd-Frank Act, including by limiting the Bureau's full scope of supervisory and enforcement authority. More ›

CFPB Issues Interpretive Rule Prohibiting Discrimination on the Basis of Sexual Orientation and Gender Identity

Anti-discrimination efforts are front and center for the Consumer Financial Protection Bureau. This is evident by the interpretive rule it recently issued relating to the Equal Credit Opportunity Act (ECOA) and Regulation B. The rule clarifies that the prohibition against sex discrimination in ECOA and Regulation B encompasses sexual orientation and gender identity discrimination. The prohibition includes discrimination motivated by perceived nonconformity with sex-based or gender-based stereotypes, as well as discrimination based on an applicant's associations. More ›

Landmark New York Court of Appeals Decision Clarifying Calculation of Statute of Limitations in Mortgage Foreclosure Actions

The New York Court of Appeals reversed four Appellate Division decisions and decided in favor of the mortgagees in a consolidated decision issued on February 18, 2021, ruling, inter alia, that:

• a demand letter which includes language that the debt "will be" accelerated expresses a possible future event and therefore does not constitute an unequivocal overt act which would accelerate the mortgage debt; 
• a defective pleading which incorrectly references only the original terms of a loan – not the operative modification agreement – is insufficient to accelerate the mortgage debt;
• a mortgagee's voluntary discontinuance of a foreclosure action is sufficient to revoke the acceleration created by the filing of that complaint; and
• a mortgagee's motivation for the discontinuance and revocation of the acceleration is irrelevant to the Court's analysis.

CFPB Highlights COVID-19-Fueled Regulatory Risks for Examined Industries in Special Edition of Supervisory Highlights

In its recent Special Edition of Supervisory Highlights on COVID-19 Prioritized Assessments, the Consumer Financial Protection Bureau (CFPB) summarized challenges and risks with respect to several industries it had informally examined since the start of the pandemic. Beginning in May 2020, the Bureau rescheduled about half of its planned examinations and instead conducted "prioritized assessments" in response to the pandemic. These assessments included seeking information on how institutions were responding and communicating with consumers, and also examining how institutions were confronting and adapting compliance in response to the pandemic. More ›

Following Fair Lending Investigation, NYS DFS Issues Report, Recommendations, and Mortgage Lender Best Practices

The New York State Department of Financial Services (DFS) issued a report on February 4, 2021, detailing its investigation of the mortgage lending market in the Buffalo metropolitan area. The report includes findings about a "distinct lack of lending" by mortgage lenders, particularly nonbank lenders, in neighborhoods with majority-minority populations and to minority homebuyers in general. More ›

Second Circuit Finds HUD Assignees Immune from State Statute of Limitations Claims

The mortgage foreclosure world continues to experience change at a moment's notice. Lenders continue to defend against borrower actions seeking to discharge their mortgages as time-barred, which in turn has led to the development of several defenses supported by the appellate courts. Whether it is lack of standing to accelerate the mortgage debt, revocation, or re-affirmation of the debt, all of these defenses are not as interesting—and powerful—as full immunity from the statute of limitations. In Windward Bora, LLC v. Wilmington Savings Fund Society, FSB, that's exactly what the Second Circuit found, and its decision could have a substantial impact for lenders in New York and elsewhere. More ›