Daily Archives: February 12, 2014


Panel Allows Marine Colonel to Sue Over Foreclosure

Panel Allows Marine Colonel to Sue Over Foreclosure

A military member can sue a mortgage company for failing to remove fees arising from the previous loan servicer’s rescinded notice of default, since such fees come within a foreclosure protection statute, the Ninth U.S. Circuit Court of Appeals has ruled.

The panel on Friday, in an opinion by Judge Ronald M. Gould, reversed a court’s dismissal of Christopher Brewster’s suit for failure to state a claim under the Federal Rules of Civil Procedure 12(b)(6).

Gould explained that Brewster stated a claim under §533 of the Servicemembers Civil Relief Act by asserting that Nationstar Mortgage’s failure to remove fees on his account was a continuation of the foreclosure proceedings that originally gave rise to the fees in the first place.

The statute protects active duty military members from foreclosures by placing limits on the proceedings that can take place while they are serving.

Brewster, a lieutenant colonel in the U.S. Marine Corps Reserve, took out a mortgage in 2007. He was called up to active duty three times between 2008 and 2011, including one overseas deployment in 2010.

Sun Trust Mortgage initially serviced his loan in 2007. Brewster, while on active duty, became delinquent on the loan and the company initiated foreclosure proceedings in 2009 by filing a notice of default.

This filing was accompanied by various fees. Sun Trust Mortgage rescinded the notice of default in August 2010, but did not remove the foreclosure fees from Brewster’s account.

In November 2010, Sun Trust Mortgage transferred the servicing rights of Brewster’s mortgage to Nationstar Mortgage. After taking over these rights, Nationstar Mortgage attempted to recover the fees from Brewster.

Nationstar Mortgage did not remove the fees that had been imposed by Sun Trust Mortgage’s attempted foreclosure proceedings.

On appeal, Nationstar Mortgage contended that the protections of §533 only extend to the foreclosure proceedings initiated by Sun Trust Mortgage, and not to its company since the proceedings had already terminated upon its becoming the loan servicer.

Gould said, however, that the term foreclosure includes more than when a property is being taken for sale. He explained that the statute refers to foreclosure proceedings, which means “a process rather than a single act.”


Deutsche Bank Told to Hand Over Documents to Dubai Regula

Deutsche Bank Told to Hand Over Documents to Dubai Regula

Deutsche Bank AG (DBK) agreed to hand over documents related to a probe into the operations of its Dubai-based wealth management division after being taken to court by the emirate’s financial free zone regulator.

The Dubai Financial Services Authority began proceedings against the Frankfurt-based lender at the Dubai International Financial Centre Courts on Oct. 31 in an attempt to force the bank to comply with its investigation. Deutsche Bank agreed to submit the documents within 28 days and pay the regulator’s costs, according to a DFSA statement yesterday.


Wells Fargo found in contempt of court in U.S. District Court in Augusta

Wells Fargo found in contempt of court in U.S. District Court in Augusta

One of the country’s largest banks was found in contempt of court Tuesday in U.S. District Court in Augusta after the bank repeatedly failed to comply with court orders.

U.S. District Court Judge Dudley H. Bowen Jr. found Wells Fargo not only in civil contempt of court but also in criminal contempt of court. The final straw was an 11-day delay in the receipt of an $8,000 check out of the bank account of a convicted bank robber.

Wells Fargo’s troubles complying with court orders started July 31 when Bowen issued orders for the bank to freeze the account of Andrew Nelson and to provide bank statements on the account to a probation officer.

Nelson was under indictment on charges of robbing a Wells Fargo bank branch on Jan. 5, 2013. He was appointed an attorney free of charge, and his attorney sought money to pay for a psychiatric evaluation.

Bowen ordered a probation officer to determine Nelson’s financial condition after learning Nelson had several thousand dollars in the bank, mostly from an $800 monthly disability check. The Department of Veterans Affairs payment was for post-traumatic stress disorder. Nelson, the judge said, had never served a day outside the United States.

The probation officer got Nelson’s previous bank statements but none after July, which was included in Bowen’s order. On Aug. 9, the officer learned that Nelson’s bank account – which was supposed to be frozen – had dropped by about $2,000.

Bowen repeated his court orders in August. On Jan. 23, after learning that Wells Fargo had failed to provide the bank statements as ordered, Bowen set a hearing for the next day. Bank executives were subpoenaed to court.

Wells Fargo Vice President Susan Honnicut, who is also president of the area marketing and represents the bank in the community, learned of the situation the day the subpoenas were issued. A half-hour before the hearing, the documents were delivered.


BofA Fired Trader on Hypocritical Pretext, Lawyer Says

BofA Fired Trader on Hypocritical Pretext, Lawyer Says

The Bank of America Corp. manager who fired Sunny Tadjudin “hypocritically” used the pretext she failed to share information, her lawyer said on the last day of a trial over her claim for bonuses of $3.7 million.

John Liptak knew Tadjudin, who worked for the bank’s Asian distressed-debt trading group, would not get a bonus for 2007 when he put her on a performance plan, her lawyer Graham Harrissaid in the Hong Kong High Court yesterday. The plan was an instrument for termination, not improvement, Harris said.

Liptak, who no longer works for the bank, denied engineering Tadjudin’s firing. She was fired after failing to meet 100 percent of the goals in her improvement plan, Liptak testified. Bank of America denied her claims that she was deprived of bonuses she was entitled to expect for 2005 and 2006 after irrational and arbitrary performance ratings.

Tadjudin is seeking HK$28.3 million ($3.7 million) for bonuses she says she should have received for 2005 to 2007, when she generated three quarters of her group’s profits. Friction developed with Liptak in 2005, when he was appointed as head of the Asia desk and he allegedly transferred a mispriced position to her portfolio, the court was told.


DOJ Criminal Division Pick Lays Out Prosecution Priorities

DOJ Criminal Division Pick Lays Out Prosecution Priorities

Law360, New York (February 11, 2014, 10:13 PM ET) — Morgan Lewis & Bockius LLP partner Leslie Caldwell, nominated to head the U.S. Department of Justice’s criminal division, made it through a Senate Judiciary Committee confirmation hearing Tuesday without facing any adamant disapproval, saying she would prioritize the prosecution of several types of crimes.


State Supreme Court Accepts 10 Cases, Including One on Mortgage Assignments

State Supreme Court Accepts 10 Cases, Including One on Mortgage Assignments

Feb. 11, 2014 – Do your clients include borrowers, lenders, or businesses that rely on the services of the Mortgage Electronic Registration System (MERS)? If so, you may want to keep your eye on a case that is headed to the Wisconsin Supreme Court.

The court recently accepted review of 10 new cases, summarized below. One is a foreclosure case, Dow Family LLC v. PHH Mortgage Corp., involving a company that bought a condo but later faced a foreclosure action by an apparent assignee.

Dow Family purchased the condo from a couple who originally issued a promissory note to U.S. Bank for $146,000. The note, recorded in 2001, was secured by a mortgage on the condo and listed MERS as the mortgagee. U.S. Bank was a member of MERS.


Morgan & Morgan Files Class Action Lawsuit Against CEO of JPMorgan Chase

Morgan & Morgan Files Class Action Lawsuit Against CEO of JPMorgan Chase

The securities attorneys in Morgan & Morgan’s New York office have filed a class action lawsuit against James Dimon, who is the CEO, President, and Chairman of the Board of Directors of JPMorgan Chase, alleging that Mr. Dimon and the other members of the bank’s Board of Directors allowed JPMorgan to embark on an unprecedented course of recklessness and unlawful conduct to increase their own personal fortunes.



According to the class action complaint, Mr. Dimon earned in excess of $130 million from 2005 through 2012. The lawsuit is seeking disgorgement of all illicit profits generated as a result of the bank’s unlawful conduct, as well as an order requiring JPMorgan to enact proper internal control procedures to prevent such fraudulent and illegal conduct from occurring in the future.