HOUSINGNEWS REPORT
LEGAL BRIEFS
Banks Win Big In Fla. Supreme Court Ruling The Florida Supreme Court on Nov. 3 ruled in favor of mortgage lenders in a decision that allows lenders to re-file new foreclosure actions against borrowers whose foreclosure cases were originally fe-filed more than five years ago but then dismissed even though the borrowers continued to miss mortgage payments. The case — Lewis Brooke Bartram v. U.S. Bank National Association — was decided in favor of the lenders as borrowers argued a five year statute of limitation should apply. The court’s ruling determined that when foreclosure actions are dismissed, lenders and borrowers return to their pre-foreclosure complaint status. The ruling was a victory for banks in Florida who continue to foreclose on loans that defaulted years ago. Many of those loans are so called “zombie mortgages,” or a foreclosure that has been started but not completed. In the future, foreclosure activity in Florida could rise, as lenders re-file foreclosure cases that were previously dismissed. Florida has a five year statute of limitations on foreclosure actions. Quicken Loans Gets Lawsuit Relocated to Detroit A federal judge moved Quicken Loans case against the Department of Justice and the Department of Housing and Urban Development from Washington, D.C., to the mortgage lenders hometown in Detroit. U.S. District Court Judge Reggie B. Walton said moving the case to the Eastern District Court in downtown Detroit would be more appropriate and convenient venue for the fraud allegations against Quicken Loans to be heard. Quicken, which is the nation’s largest Federal Housing Administration-backed mortgage lender, sued the DOJ and HUD in April 2015, claiming that it was left with no alternative but to sue due to the DOJ’s demands. The government countersued Quicken six days later. SOURCE: Lewis Brooke Bartram v. U.S. Bank National Association
CFPB Seeks Rehearing in PHH Lawsuit The Consumer Financial Protection Bureau (CFPB) is challenging an appeals court ruling in a lawsuit filed by PHH Mortgage Corp. that would enable the president of the United States to fire the agency’s director. On October 11, 2016, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit held in PHH Corporation v. CFPB that the structure of the CFPB as an independent agency headed by a single director violated Article II of the Constitution. The next step in the legal process is a rehearing of the decision before the full appeals court. The full court has a majority of judges appointed by Democratic presidents, while all three judges on the panel that issued the ruling were named by Republican presidents. The D.C. Circuit handed a victory to PHH Mortgage, declaring the CFPB’s leadership structure unconstitutional and vacating a $103 million fine against PHH. The PHH ruling handed a victory to the banking industry, which has viewed the agency as a thorn in its side and accused it of overreaching in its regulation of consumer financial activities. The CFPB has taken legal action against banks, mortgage companies, credit card issuers, payday lenders, debt collectors and others.
SOURCE: PHH Corporation v. CFPB
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SOURCE: United States v. Quicken Loans, Inc.
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