Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 48 posts in Foreclosures.

Michigan Supreme Court Holds Full Credit Bid Does Not Impact Lenders’ Right to Recover From Third Parties

In an important ruling for mortgage lenders and servicers, the Michigan Supreme Court clarified in Bank of America v First American Title Ins Co, Docket No. 149599 (2016) the impact of a full credit bid—when a lender bids the full amount of the outstanding debt at a foreclosure sale—on a lender’s ability to bring claims against a third party following foreclosure. In doing so, the Supreme Court expressly overruled a previous holding by the Court of Appeals in New Freedom Mtg Corp v Globe Mtg Corp, 281 Mich App 63; 761 NW2d 832 (2008). Read More ›

New Texas Law Provides Statutory Mechanism for Unilateral Rescission of Acceleration

Recent legislation now provides a bright line rule for unilaterally abandoning acceleration of installment loans. Lenders and mortgage servicers often face challenges by borrower seeking to invalidate lienholder interests on statute of limitations grounds that in many cases were caused by compliance with lengthy, federally-regulated, loss mitigation requirements. Texas House Bill 2067, effective September 1, 2015, provides a new and welcomed rule for unilateral rescission of acceleration. Read More ›

First Circuit Confirms that Servicers’ Delinquency Advances Do not Impede Foreclosure

An important appellate court ruling has rejected what it termed a “crafty” argument, which has been advanced by many attorneys in the past several years on behalf of defaulted mortgagors seeking to avoid foreclosure. The United States Court of Appeals for the First Circuit has held that delinquency advances made by servicers to mortgage securitization trusts were not made on behalf of the defaulted borrowers, and therefore foreclosures on the subject properties could proceed. Read More ›

Sixth Circuit Affirms that Michigan Mortgagees Need Not Disclose Who Owns the Note to Foreclose, and Borrowers Cannot State a Negligence Claim Based on Alleged Duties Under HAMP

In an opinion issued on July 6, 2015, which has been recommended for publication, the United States Court of Appeals for the Sixth Circuit affirmed the dismissal of several common claims made by borrowers in foreclosure-related litigation. In Rush v. Freddie Mac, the plaintiffs challenged a foreclosure on four grounds: they alleged that (1) Bank of America lacked standing to foreclose because there was no chain of title evidencing ownership of the loan; (2) Freddie Mac negligently failed to evaluate plaintiffs’ loan under the Home Affordable Modification Program (“HAMP”); (3) the foreclosure violated Michigan law; and (4) foreclosure by advertisement violated their due process rights. Read More ›

Illinois Courts Continue to Examine Low Foreclosure Sale Prices

Judicial confirmation of the sale is the final hurdle in the foreclosure process in Illinois in both commercial and residential cases. Upon entry of a judgment of foreclosure, the real estate that is the subject of the judgment must be sold at a judicial sale on the terms and conditions specified in the judgment of foreclosure. 735 ILCS 5/15-1507(a)-(b). But, title does not pass to a successful bidder until the sale is confirmed by the court and, under the Illinois Mortgage Foreclosure Law’s sale confirmation statute, 735 ILCS 5/15-1508(b), a court may void a foreclosure sale if (1) notice of sale was not given; (2) the terms of the sale were unconscionable; (3) the sale was conducted fraudulently; or (4) “justice was otherwise not done.” Parties bidding at foreclosure sales should be aware that bidding significantly less than the appraised value of the property could result in an evidentiary hearing and a delay in confirmation of the sale.  Read More ›

HUD’S Distressed Asset Sale Program May Force a Delay in Foreclosures

On April 24, 2015, the U.S. Department of Housing and Urban Development (“HUD”) announced changes it intends to make to its Distressed Asset Sale Program (known as DASP) which will affect mortgage servicers who purchase nonperforming home mortgage loans.  Read More ›

Bill Introduced to Permanently Extend Protecting Tenants at Foreclosure Act

On March 13, 2015, Senator Richard Blumenthal (D-CT) and Representative Keith Ellison (D-MN) introduced a bill seeking to extend the protections of the Protecting Tenants at Foreclosure Act (the Act) permanently. The Act, which expired December 31, 2014, provided protection for tenants living in a foreclosed property. Read More ›

New FHA Guidelines Could Lead to Postponement of Reverse Mortgage Foreclosures

Late January, the Federal Housing Administration (FHA) issued new policy guidelines under its Home Equity Conversion Mortgage (HECM) program that allows FHA-approved lenders to postpone foreclosure proceedings against non-borrowing spouses in the event of the death of the last surviving borrower. This latest guidance is similar to policy changes announced by the FHA last year, but those changes only impacted HECM loans that were created on or after August 4, 2014. Read More ›

Changes to Michigan Foreclosure Law May Result in Early Termination of Mortgagor's Redemption Right

In January 2014, the Michigan Legislature added a provision to MCL 600.3240 which significantly altered the redemption right of a delinquent borrower whose property is foreclosed and sold via foreclosure by advertisement. The new provision in Section 3240 expanded the rights of purchasers of foreclosed property by providing them with authority to inspect the interior and exterior of the foreclosed property during the redemption period (which varies depending on the circumstances from 30 days to 1 year, but is typically 6 months). Read More ›

California Court of Appeal Declines to Follow Glaski and Affirms Dismissal of Wrongful Foreclosure Action Based on Borrower’s Lack of Standing to Challenge PSA

In Yvanova v. New Century Mortgage Corp., plaintiff filed suit against numerous financial institutions alleging that the deed of trust was improperly securitized and assigned from the original lender to several successive entities.  In 2006, plaintiff obtained a loan from a mortgage lender who went into bankruptcy in 2007.  Subsequently, the deed of trust was assigned to New Century Mortgage through a pooling and servicing agreement.  Plaintiff defaulted and was served with a notice of default in August 2008 and January 2012.  The property was sold through a foreclosure sale on September 14, 2012.  Read More ›