News + updates + recent press
With the recent decision in Federal Home Loan Mortgage Corporation v. Zepeda, No19-0712, the Texas Supreme Court issued a significant decision in favor of home equity lenders in, answering the question, “Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under §50 of the Texas Constitution?” Or more specifically, “If the party seeking equitable subrogation could have satisfied the requirements of §50(a)(6)(Q)(ix) but failed to do so, does that failure preclude it from invoking equitable subrogation?”
On April 20, 2020, the United States Court of Appeals for the Fourth Circuit in the Western District of Virginia, in Stepp v. U.S. Bank Trust National Association, Case No. 19-1067 held that “a bank office that conducts no mortgage related business does not qualify as a branch office of a mortgagee under the regulatory exception.
“According to Stepp, U.S. Bank improperly initiated foreclosure without first offering her a face to face meeting as required by 24 CFR 203.604(b). U.S. Bank argued that it was exempt from the face to face meeting requirement under 24 CFR 203.604(c)(2) which excuses the meeting when the mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either.” Because U.S. Bank’s Richmond office, the only one within 200 miles of Stepp’s home, conducted no mortgage related business and was not open to the public, U.S. Bank contended it did not qualify as a branch office of a mortgagee and so the exception applied.
The Fourth District Court of Appeal held that the text of 24 CFR 203.604(c)(2) cannot be read to encompass an office at which no mortgage related business is conducted. An office that does not mortgage related business at all, even if within 200 miles of a mortgagor’s home, will be poorly positioned to discuss the mortgage specific loss mitigation options. Note: this is a decision out of the Western District of Virginia and is not binding in all jurisdictions.
Servicers operating in Ohio and Florida should consider these recent property registration updates from ProChamps:
PLG BLOG DISCLAIMER
The information contained on this blog shall not constitute legal advice or a legal opinion. The existence of or review and/or use of this blog or any information hereon does not and is not intended to create an attorney-client relationship. Further, no information on this blog should be construed as investment advice. Independent legal and financial advice should be sought before using any information obtained from this blog. It is important to note that the cases are subject to change with future court decisions or other changes in the law. For the most up-to-date information, please contact Padgett Law Group (“PLG”). PLG shall have no liability whatsoever to any user of this blog or any information contained hereon, for any claim(s) related in any way to the use of this blog. Users hereby release and hold harmless PLG of and from any and all liability for any claim(s), whether based in contract or in tort, including, but not limited to, claims for lost profits or consequential, exemplary, incidental, indirect, special, or punitive damages arising from or related to their use of the information contained on this blog or their inability to use this blog. This Blog is provided on an "as is" basis without warranties of any kind, either express or implied, including, but not limited to, warranties of title or implied warranties of merchantability or fitness for a particular purpose.