Category Archives: Loss Mitigation

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Sixth Circuit Affirms Dismissal of $2.3 Billion FCA Case Due to Prior Public Disclosure

Last week, in U.S. ex rel. Advocates for Basic Legal Equality, Inc. (ABLE) v. U.S. Bank, the Sixth Circuit affirmed the dismissal of a False Claims Act (FCA) suit against U.S. Bank because the conduct alleged by the qui tam relator had previously been publicly disclosed in a consent order with the Office of the … Continue Reading

Oral Modification of Mortgage Not Permitted by Florida Court of Appeals

This week, the Florida Fourth District Court of Appeals held that Florida’s Statute of Frauds precludes oral modification of a mortgage and that the judicial doctrine of promissory estoppel may not be used to circumvent the application of the Statute of Frauds. In Ocwen Loan Servicing, LLC v. Jean Marie Delvar, the noteholding servicer brought … Continue Reading

Do the CFPB Mortgage Servicing Rules Provide For Rescission?

The Consumer Financial Protection Bureau’s (CFPB) mortgage servicing rules have now been in place for nearly 18 months. These rules have set forth extensive loss mitigation procedures that nearly all servicers must follow. In particular, 12 C.F.R. § 1024.41 requires servicers to stop foreclosure proceedings when a borrower submits a timely application for loss mitigation. … Continue Reading

Chapter 7 Debtors Cannot Strip Off Junior Liens on Underwater Home Loans, United States Supreme Court Rules

This morning, the United States Supreme Court ruled that debtors in Chapter 7 bankruptcy cases cannot “strip off,” or completely void, junior mortgages that—based on the value of the property and the amount of claims secured by senior mortgages—are completely underwater. This ruling eliminates a potential means for Chapter 7 debtors to maximize the relief … Continue Reading

Servicer’s Loss Mitigation Letters Found Not to Be Attempts to Collect a Debt

A recent decision from Pasco County, Florida clarifies for lenders and servicers what constitutes an attempt to collect a debt when they are communicating with a debtor about loss mitigation. In Hurtubise v. P.N.C. Bank, N.A., the borrower, James Hurtubise, filed suit against his creditor, PNC Bank, alleging that the bank improperly contacted him to … Continue Reading
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