Daily Archives: January 7, 2014

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United States: Ohio Appellate Court Rejects Mortgage Servicing Class Action, Finds Foreclosure Actions Are Not “Consumer Transactions” Under The Consumer Sales Practices Act

United States: Ohio Appellate Court Rejects Mortgage Servicing Class Action, Finds Foreclosure Actions Are Not “Consumer Transactions” Under The Consumer Sales Practices Act

Yesterday, the Eighth District Ohio Court of Appeals affirmed the dismissal of a putative class action raising claims against a noteholder, mortgage servicer, and law firm under Ohio’s Consumer Sales Practices Act (“CSPA”). In Glazer v. Chase Home Finance L.L.C., 2013-Ohio-5589 (Ohio App. 2013), the Eighth District held that servicing defaulted mortgage loans is not a “consumer transaction” subject to the CSPA. The court also reinforced that there is no private right of action to enforce alleged violations of R.C. 1319.12, a statute imposing certain regulations on debt collectors. The court’s ruling limits the exposure of the mortgage servicing industry to class action litigation in Ohio—a substantial win given that Ohio was one of the epicenters of the foreclosure crisis.

The plaintiffs alleged that the defendants violated the CSPA by prosecuting a foreclosure case in which they allegedly wrongfully held Chase (the putative noteholder) out as a noteholder when the note was allegedly still held by Fannie Mae. The plaintiff argued that the CSPA applied because the defendants were “suppliers” under the CSPA, made material misrepresentations in a residential mortgage consumer transaction, and engaged in unfair and deceptive debt collection practices.

The court rejected this argument, relying on the Ohio Supreme Court’s recent decision in Anderson v. Barclay’s Capital Real Estate, Inc., 136 Ohio St.3d 31, 2013-Ohio-1933, 989 N.E.2d 997, that residential mortgage servicers are not covered by the CSPA. While the plaintiff attempted to distinguish Anderson, reasoning that Anderson focused on “primary mortgages” rather than mortgages that had gone into default or foreclosure, the Eighth District rejected that distinction because Anderson expressly held the “management of loans in default” was not covered. As a result, the court found the foreclosure-related actions were not “consumer transactions” and dismissed the plaintiff’s CSPA claim for lack of standing. Likewise, for similar reasons, the court also found that mortgage servicers were not “suppliers” subject to CSPA.

JPMorgan Would Prefer You Not See This Shameful Rectangle

Check it out..

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$1.4B Credit Suisse Loan Pool Suits Tossed By Judge

$1.4B Credit Suisse Loan Pool Suits Tossed By Judge

Law360, Los Angeles (January 06, 2014, 8:08 PM ET) — A New York state judge on Monday tossed claims that a Credit Suisse AG affiliate made misrepresentations about mortgage-backed securities that cost investors $1.4 billion, ruling that the suits were filed before Credit Suisse had a chance to repurchase the loans.

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RBS Japanese Unit Sentenced With $50M Fine In Libor Case

RBS Japanese Unit Sentenced With $50M Fine In Libor Case

Law360, New York (January 06, 2014, 8:34 PM ET) — A Connecticut federal judge on Monday formally sentenced the Japanese subsidiary of Royal Bank of Scotland PLC for its role in rigging the London Interbank Offered Rate, or LIBOR, accepting a criminal plea agreement that includes a $50 million fine.

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Prudential, Goldman Settle $375M RMBS Fraud Suit

Prudential, Goldman Settle $375M RMBS Fraud Suit

Law360, Los Angeles (January 06, 2014, 9:24 PM ET) — A New Jersey federal judge on Monday dismissed Prudential Insurance Company of America Inc.’s lawsuit accusing Goldman Sachs & Co. of fraud and racketeering related to the sale of more than $375 million in residential mortgage-backed securities, after the parties reached an undisclosed settlement.

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Wells Fargo, Fannie Mae Dodge Suit Over Reverse Mortgages

Wells Fargo, Fannie Mae Dodge Suit Over Reverse Mortgages

Law360, Chicago (January 06, 2014, 9:38 PM ET) — A California federal judge on Friday tossed a proposed class action accusing Wells Fargo Bank NA and Fannie Mae of wrongly refusing heirs and surviving spouses of reverse mortgage borrowers the opportunity to buy property at its appraised value.

U.S. District Judge Samuel Conti issued an order dismissing the suit brought by the AARP on behalf of Robert Chandler, finding that the deed attached to Chandler’s deceased mother’s reverse mortgage — or “home equity conversion mortgage” — didn’t back his claims.

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INFOGRAPHIC: JP MORGAN PAYS $31.78 BILLION IN FINES AND OTHER LEGAL COSTS SINCE 2009

INFOGRAPHIC: JP MORGAN PAYS $31.78 BILLION IN FINES AND OTHER LEGAL COSTS SINCE 2009

AND there are many many more years to come!