In an unpublished opinion, the U.S. Court of Appeals for the Eleventh Circuit recently held that a debt collector’s telephone messages did not violate the federal Fair Debt Collection Practices Act (“FDCPA”),
15 U.S.C. § 1692, where the message identified the name of the caller, which included the term “Collection Bureau,” and specifically referenced the debtor’s personal file number.
A copy of the opinion is available at:
http://www.ca11.uscourts.gov/unpub/ops/201110560.pdf
Plaintiff-debtor (“Debtor”) brought suit against defendant-debt collector, Gulf Coast Collection Bureau, Inc. (“Gulf Coast”), alleging violations of the FDCPA and the Florida Consumer Collections Practices Act (“FCCPA”).
The Debtor’s allegations arose from a series of identical or nearly identical telephone messages from Gulf Coast which stated:
“This message is intended for Eric H. Beeders (Debtor). If you are not Eric H. Beeders please hang up or disconnect. If you are Eric H. Beeders please continue to listen to this message. By continuing to listen to this message you acknowledge that you are Eric H. Beeders. Please return this call to Roy Dillard from Gulf Coast Collection Bureau. Please call 877-827-4820 and ask for file number G31852.”
The lower court granted Gulf Coast’s motion for directed verdict following a bench trial. On appeal, the Debtor argued that the telephone message failed to comply with the FDCPA and FCCPA “because it did not adequately satisfy the disclosure requirement in that it did not identify the nature of the calling company’s business, the fact that the caller was a debt collector, and the fact that the call was being made with respect to the collection of a debt.”
The Eleventh Circuit affirmed, reasoning that “taking this message as a whole, even an unsophisticated consumer would not be misled as to the purpose of this call, as the message identified the name of the caller, which includes the term ‘Collection Bureau,’ and specifically referenced a personal file number.” Accordingly, the Court found “no reversible error in the district court’s conclusion that Gulf Coast satisfied the disclosure requirements of the FDCPA.”
The Court also noted that, having found against the Debtor on his FDCPA claim, the Court “need not address Debtor’s arguments that the failure to comply with these requirements constitute a per se violation of the FCCPA.” Therefore, the Court also affirmed the lower court’s grant of summary judgment as to Debtor’s FCCPA claim.
Friday, July 15, 2011
Ind Sup Ct Holds Failure to Name Second-Lienholder in Foreclosure May Result in Buyer Taking Subject To
The Indiana Supreme Court recently held that a mortgage lender who failed to make a junior lienholder a party to a foreclosure action could not institute a new and subsequent foreclosure action against the junior lienholder, because the first mortgage lender's lien was extinguished by the doctrine of merger.
A copy of the opinion is available at:
http://www.in.gov/judiciary/opinions/pdf/06291102rdr.pdf
Countrywide Home Loans, Inc. ("Countrywide") foreclosed on a property, bid its judgment and took title to the property by way of a sheriff's deed.
In error, Countrywide did not make Citizens State Bank of New Castle ("Citizens") a party to the foreclosure action, although Citizens held a judgment lien on the property. Countrywide then conveyed title to the
property to Federal National Mortgage Association ("FNMA").
When Countrywide discovered Citizens' judgment lien, Countrywide filed an action titled "Complaint for Strict Foreclosure," seeking to foreclose Citizens' interest in the subject property. Citizens filed a separate action against FNMA attempting to foreclose on its judgment lien. The two actions were consolidated, each side moved for summary judgment, and the trial court granted the motion brought by Countrywide and FNMA.
Citizens appealed and the appellate court reversed, on the grounds that through the doctrine of merger, Countrywide's lien was extinguished. The Indiana Supreme Court granted transfer, vacating the opinion of the appellate court.
As you may recall, the doctrine of merger provides that when one party acquires both a lien on and legal title to a property, the two interests merge, and the lien is extinguished. However, merger may produce an arguably unfair result where it operates to give a junior lienholder priority over a senior lienholder. Therefore, an exception to the doctrine of merger provides that merger will not take place if it is against the best interests of the party in whom the interests merge.
The Court began its analysis by nothing that, under Indiana law, a junior lienholder not made a party to a foreclosure action is not bound by the foreclosure. In such circumstances, a purchaser at a foreclosure sale takes the property subject to the junior lienholder's interest.
Next, the Court scrutinized the merger and anti-merger doctrines. It concluded that although courts must presume that the mortgagee intended the result that it was in its best interest, that presumption can be rebutted by evidence finding that a merger had been expressly agreed to.
The Court found such evidence here. When Countrywide conveyed its interest in the property to FNMA, it used language which indicated that the title conveyed was free from all encumbrances. The Court reasoned that Countrywide could only make such a conveyance if Countrywide's lien had been extinguished through merger.
Because "Countrywide demonstrated that it intended a merger of its interests," the Court held that Countrywide was not entitled to the remedy of strict foreclosure. Thus, the decision of the trial court was reversed.
A copy of the opinion is available at:
http://www.in.gov/judiciary/opinions/pdf/06291102rdr.pdf
Countrywide Home Loans, Inc. ("Countrywide") foreclosed on a property, bid its judgment and took title to the property by way of a sheriff's deed.
In error, Countrywide did not make Citizens State Bank of New Castle ("Citizens") a party to the foreclosure action, although Citizens held a judgment lien on the property. Countrywide then conveyed title to the
property to Federal National Mortgage Association ("FNMA").
When Countrywide discovered Citizens' judgment lien, Countrywide filed an action titled "Complaint for Strict Foreclosure," seeking to foreclose Citizens' interest in the subject property. Citizens filed a separate action against FNMA attempting to foreclose on its judgment lien. The two actions were consolidated, each side moved for summary judgment, and the trial court granted the motion brought by Countrywide and FNMA.
Citizens appealed and the appellate court reversed, on the grounds that through the doctrine of merger, Countrywide's lien was extinguished. The Indiana Supreme Court granted transfer, vacating the opinion of the appellate court.
As you may recall, the doctrine of merger provides that when one party acquires both a lien on and legal title to a property, the two interests merge, and the lien is extinguished. However, merger may produce an arguably unfair result where it operates to give a junior lienholder priority over a senior lienholder. Therefore, an exception to the doctrine of merger provides that merger will not take place if it is against the best interests of the party in whom the interests merge.
The Court began its analysis by nothing that, under Indiana law, a junior lienholder not made a party to a foreclosure action is not bound by the foreclosure. In such circumstances, a purchaser at a foreclosure sale takes the property subject to the junior lienholder's interest.
Next, the Court scrutinized the merger and anti-merger doctrines. It concluded that although courts must presume that the mortgagee intended the result that it was in its best interest, that presumption can be rebutted by evidence finding that a merger had been expressly agreed to.
The Court found such evidence here. When Countrywide conveyed its interest in the property to FNMA, it used language which indicated that the title conveyed was free from all encumbrances. The Court reasoned that Countrywide could only make such a conveyance if Countrywide's lien had been extinguished through merger.
Because "Countrywide demonstrated that it intended a merger of its interests," the Court held that Countrywide was not entitled to the remedy of strict foreclosure. Thus, the decision of the trial court was reversed.
Foreclosure case goes to Supreme Court of Florida
http://pdfserver.amlaw.com/dbr/Nieves-appeal.pdf
In Nieves' case, the 4th District Court of Appeal ruled Feb. 3 that BNY Mellon legally avoided a claim that it committed a fraud on the court by voluntarily dismissing a foreclosure action against Pino, a Lake Worth, Fla., resident. The claim was dismissed after Pino's counsel scheduled depositions and asked for an evidentiary hearing to determine whether BNY Mellon used a fraudulent mortgage assignment.
On appeal is an 8-1 en banc decision saying courts have no authority to rescind voluntary dismissals and that no harm was done. Judge Mark Polen disagreed, saying the allegation of a systemic fraud was the very thing the Supreme Court addressed in its 2010 rule change giving courts greater latitude in sanctioning plaintiffs who make false allegations.
http://www.law.com/jsp/law/sfb/article.jsp?id=1202501156555&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110715&kw=Newcomer%20to%20Argue%20High-Stakes%20Foreclosure%20Case%20Before%20Fla.%20Supreme%20Court
In Nieves' case, the 4th District Court of Appeal ruled Feb. 3 that BNY Mellon legally avoided a claim that it committed a fraud on the court by voluntarily dismissing a foreclosure action against Pino, a Lake Worth, Fla., resident. The claim was dismissed after Pino's counsel scheduled depositions and asked for an evidentiary hearing to determine whether BNY Mellon used a fraudulent mortgage assignment.
On appeal is an 8-1 en banc decision saying courts have no authority to rescind voluntary dismissals and that no harm was done. Judge Mark Polen disagreed, saying the allegation of a systemic fraud was the very thing the Supreme Court addressed in its 2010 rule change giving courts greater latitude in sanctioning plaintiffs who make false allegations.
http://www.law.com/jsp/law/sfb/article.jsp?id=1202501156555&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110715&kw=Newcomer%20to%20Argue%20High-Stakes%20Foreclosure%20Case%20Before%20Fla.%20Supreme%20Court
FRB/FTC Issue Final Rule on Dodd-Frank Act Changes to Risk-Based Pricing, Adverse Action Notices
The Federal Reserve Board and the Federal Trade Commission (FTC) issued their final rules implementing the new credit score disclosure requirements under Dodd-Frank, specifically relating to adverse actions and risk-based pricing notices under FCRA/Regulation V and ECOA/Regulation B.
Model forms are also provided.
Copies of the Final Rules are available at:
Regulation V:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110706a1.pdf
Regulation B:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110706a2.pdf
Under section 311 of FACTA, if a credit score is used in setting material terms of credit or in taking adverse action, creditors must disclose credit scores and related information to consumers in notices. Section 1100F of the Dodd-Frank Act changed the content required for risk-based pricing notices. Accordingly, the final rules amend Regulation V to revise the content requirements for risk-based pricing notices, and to add related model forms that reflect the new credit score disclosure requirements.
The final rules also amend certain model notices in Regulation B, which combine the adverse action notice requirements for Regulation B and the FCRA, to reflect the new credit score disclosure requirements
The rules under Regulations V and B are effective 30 days after the date of publication in the Federal Register, which is expected shortly.
Model forms are also provided.
Copies of the Final Rules are available at:
Regulation V:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110706a1.pdf
Regulation B:
http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20110706a2.pdf
Under section 311 of FACTA, if a credit score is used in setting material terms of credit or in taking adverse action, creditors must disclose credit scores and related information to consumers in notices. Section 1100F of the Dodd-Frank Act changed the content required for risk-based pricing notices. Accordingly, the final rules amend Regulation V to revise the content requirements for risk-based pricing notices, and to add related model forms that reflect the new credit score disclosure requirements.
The final rules also amend certain model notices in Regulation B, which combine the adverse action notice requirements for Regulation B and the FCRA, to reflect the new credit score disclosure requirements
The rules under Regulations V and B are effective 30 days after the date of publication in the Federal Register, which is expected shortly.
Tuesday, July 12, 2011
9th Circuit Oral Argument on Chapter 13 Mortgage Addendum- Monthly Statements
• In re Monroy, No. 10-60005- 9th Circuit Oral Argument on Chapter 13 Mortgage Addendum
http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007730
http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007730
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