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Showing 12 posts in Mortgage.

Recent Illinois Court Decision Illustrates Pitfalls of Multiple Filings of a Mortgage Foreclosure Action

While Illinois mortgagees have the option of recouping delinquent mortgage loan debt through different types of lawsuits, the pursuit of this option can violate Illinois' prohibition on refiling the same cause of action. A recent decision illustrates the pitfalls of a mortgagee's numerous lawsuits filed on the same default and debt in reliance upon Illinois' savings statute. More ›

Business Records Exception Used to Attack Foreclosure Action in Maine Supreme Court

The Maine Supreme Court, using a recent interpretation of the business records exception to the hearsay rule under Maine law, has raised questions regarding mortgage loan servicers' ability to foreclose on defaulted borrowers. An essential element of proof in any Maine judicial foreclosure action includes evidence of default, and in Key Bank Nat'l Ass'n v. Estate of Quint, the Court affirmed exclusion of a prior servicer's screenshots submitted to demonstrate the amount a borrower owed, costs incurred and the outstanding principal balance in pursuit of a judicial foreclosure action. The current servicer's witness testified to establish default on review of the prior servicer's business records and under exception to hearsay, but the trial judge concluded that the witness had not established the hearsay exception with regard to records of the prior servicer. More ›

Consumer Financial Services: What to Expect in 2018

2017 was a highly volatile year for the consumer financial services industry, featuring significant court rulings, regulatory changes and other developments.

With a new year upon us, Consumer Crossroads blog wanted to ask some of our Hinshaw financial services attorneys about what we might expect in 2018. Here they are, specifically prognosticating trends in FCRA litigation, reverse mortgages, student loan regulatory and litigation, CFPB developments, cryptocurrencies, TCPA litigation, lost promissory notes, federal regulatory conduct and local government responses to the foreclosure crisis. More ›

A New HUD Rule for Reverse Mortgages, with Additional Rule Changes Proposed in Congress

This past month, Washington was busy with rule changes and proposed legislation that underscores the ongoing debate over the origination and foreclosure of reverse mortgages. First, the U.S. Department of Housing and Urban Development reduced the maximum amount a reverse mortgage applicant can borrow. Previously, the maximum amount was exclusively tied to the property's value (at either 60% or 70%). Under the new rule, HUD has tied that maximum amount to three criteria: applicant's age, loan rates and the value of the property. While it is unclear how these new criteria will impact the maximum amount, the Wall Street Journal reports that Lending Tree's chief sales officer anticipates that a typical applicant will now be able to borrow 58% on the property's value, down from an average of 64%. Second, HUD increased the upfront insurance premium charged on any reverse mortgage from between .5%-2.5% percent and depending on the amount borrowed to a flat 2%. Given the reduction in amount that an applicant can borrow and an increase in upfront insurance payments, HUD's new rules appear aimed at benefiting lenders. The new rules went into effect on October 2, 2017. More ›

Mortgage Foreclosure Alert: Attaching Promissory Note in Illinois Sufficient to Show Standing; but HUD Letters Require Proof of Dispatch

In a foreclosure action, the Illinois Appellate Court recently held that the foreclosing lender established its standing by attaching the blank-indorsed note to its complaint, but reversed judgment and remanded for the trial court to determine if a letter required by the Secretary of Housing and Urban Development ("HUD") regulations was actually dispatched. More ›

Mortgages or milk - do you need to check your expiration date?

There are borrowers out there who believe that the Massachusetts Obsolete Mortgage Statute, M.G.L. c. 260 sec. 33, relieves them of their repayment obligations. This statute, amended back in 2006, provides that five years after a mortgage reaches its term (or 35 years after the time the mortgage is recorded where a maturity date is not specified) it will be discharged by operation of law absent the timely recording of an extension or affidavit. The 2006 amendment specifically applied to all existing mortgages. The law is supposed to provide clarity in conveyancing and protect borrowers if their mortgagee or servicer failed to issue a discharge of the mortgage after the mortgage reaches its term.

In Hayden v. HSBC Mortgage, the borrowers alleged that the statute should apply to their loan and the loan should be discharged by operation of law because five years had passed from the time the servicer had accelerated the loan. Mortgagees and servicers can rest easy, however, because the First Circuit rejected this theory outright. In a succinct and emphatic rejection, the court held that "[n]othing in the text of the statute supports the Haydens' assertion that the acceleration of the maturity date of a note affects the five-year limitations period for the related mortgage." Thus, a borrower's milk will undoubtedly expire well before his mortgage.

No Surrender: Massachusetts Appeals Court Preserves Foreclosure Challenges for Bankruptcy Petitioner

Like Bruce Springsteen, a Massachusetts bankruptcy debtor said "no surrender" when it came to his home. In EverBank v. Chacon, a panel of the Massachusetts Appeals Court issued a non-binding decision that a debtor's "surrender" of real property in a bankruptcy petition does not waive defenses to an eventual foreclosure. EverBank had foreclosed on Mr. Chacon's home mortgage, acquired the property at the sale, and then sought to evict him through summary process action filed in Massachusetts state court. Mr. Chacon claimed that that EverBank did not comply with a HUD regulation that requires a face to face meeting prior to foreclosure rendering the foreclosure void. More ›

A Missing Massachusetts Promissory Note's Outsized Potential Impact on Foreclosures

In Zullo v. HMC Assets, LLC, the Massachusetts Land Court has issued a judicial about-face in deciding that a mortgage holder lacks standing to foreclose if that holder never possessed the mortgagor's original promissory note – even if that holder can submit a lost note affidavit from a predecessor holder. In a written decision issued in August 2014, the Land Court determined, in the very same case, that the mortgage holder could foreclose without possession of the original promissory note but with a lost note affidavit executed by a prior loan servicer. The 2014 Zullo decision directly contradicted two decisions arising out of the Massachusetts bankruptcy court, Desmond v. Raymond C. Green, Inc., 505 B.R. 365 (Bankr. D. Mass. 2014); Marks v. Braunstein, 439 B.R. 248 (Bankr. D. Mass. 2010), both of which concluded that under Massachusetts law, the foreclosing mortgage holder must have at one point possessed the original note, so that it can execute the lost note affidavit. More ›

CFPB Releases State by State Report on Consumer Complaints

This week, the Consumer Financial Protection Bureau (CFPB) released its June 2017 complaint report. The format is different than usual. Normally, the report spotlights complaints from a particular industry and state. This month, the report provides a state by state overview of what consumers are complaining about across the country. You can see the top 5 industries receiving complaints by volume and quarterly percent change for each state. More ›

Treasury Echoes Trump: Deregulate to Improve Financial Systems

Shortly after taking office, President Trump issued an Executive Order to establish a policy for regulating the United States financial system under seven "Core Principles," and to order a report from the United States Treasury that assesses financial markets. Last week, Treasury responded with its first 150 page report on the current state of the financial system that outlines proposed regulatory changes. Treasury points the finger at the Obama administration’s 2010 enactment of Dodd-Frank for imposing regulatory requirements insufficiently tailored or coordinated among agencies, unrelated to addressing the problems leading to the great recession, and applied in an overly prescriptive manner. In no uncertain terms, the report concludes that the scope and excess costs imposed by Dodd-Frank have resulted in a slower rate of growth in the financial markets. Unsurprisingly, Treasury’s regulatory recommendations coincide with Congress’ current legislative effort at replacing Dodd-Frank with the Financial Choice Act. More ›

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