Category Archives: State Law Developments

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Appellate Court Reverses Course on Lis Pendens Effect on Post Judgment Liens

UPDATE: On rehearing, the appellate court held that all liens placed on property between a final judgment of foreclosure and judicial sale are discharged by Florida statute. Specifically, the court recognized that the sale discharges all liens, whether recorded before final judgment or after, if the lienor does not intervene in the action within 30 days … Continue Reading

Servicers Beware: Courts Rule Non-Parties Cannot Invoke Jury Trial Waiver

In Florida, courts routinely enforce jury trial waiver provisions found in loan agreements, which are generally valid and enforceable. This is true even with respect to fair debt actions. However, because there is generally a fundamental right to a jury trial, waivers of this right are strictly construed. As such, federal courts in Florida have … Continue Reading

No Free Houses—Florida Supreme Court Approves Fifth DCA’s Bartram Decision and Extension of Singleton v. Greymar

The mortgage industry scored a significant victory last week when the Florida Supreme Court released its decision in Bartram v. U.S. Bank, N.A. broadly approving of the approach taken by the Fifth District Court of Appeal and other courts in addressing the application of the statute of limitations in the context of an action for … Continue Reading

UPDATE: Ninth Circuit Denies Rehearing of Bourne Valley Decision Holding Nevada HOA Super-Priority Lien Statute Unconstitutional

The Ninth Circuit denied the plaintiff’s request to rehear Bourne Valley Court Trust v. Wells Fargo Bank, N.A., in which the Ninth Circuit found NRS 116 to be unconstitutional on its face because the statute violates a first lien holder’s due process rights by impermissibly shifting the burden to mortgage lenders to affirmatively request notice … Continue Reading

Ninth Circuit Denies Motion to Dismiss and Motion to Stay Publication of Decision Holding Nevada HOA Super-Priority Lien Statute Facially Unconstitutional

As we have previously covered in a series of blog posts, the Nevada Supreme Court held in September 2014 that Nevada Revised Statute chapter 116 allows homeowners’ associations (HOAs) to non-judicially foreclose on homeowners who have overdue assessments, which may extinguish a first lien holder’s deed of trust. That holding, as well as the confusion … Continue Reading

Same Verse, Different Chapter: The Statute of Limitations Saga Continues in Florida

The Second District Court of Appeals joins the Third District in affirming a final judgment of foreclosure in favor of the bank in an action based on a breach date that falls outside the five-year statute of limitations under Florida Statute 95.11(2)(c), beginning the second chapter of the statute of limitations saga. The Second District … Continue Reading

Florida Appellate Court Rules Lis Pendens Does Not Bar Post Judgment Liens

In a recent decision issued by the Fourth District Court of Appeal, the court held that while a lis pendens may discharge liens that exist prior to entry of a final judgment of foreclosure, it does not affect those that accrue after the date on which the judgment is entered. In Ober v. Town-Of-Lauderdale-By-The-Sea, the … Continue Reading

The Ninth Circuit Weighs In: Nevada HOA Super-Priority Lien Statute is Facially Unconstitutional

The tide may finally be turning in Nevada.  Since the Nevada Supreme Court dealt a devastating blow to the whole of the financial services industry in September 2014 by holding that an HOA could foreclose on its super-priority lien and thereby extinguish a first deed of trust, first lien holders have been battling to protect … Continue Reading

Nevada Supreme Court Strikes Significant Blow Against HOA Super-Priority Foreclosure-Sale Purchasers

In September 2014, the Nevada Supreme Court held that an HOA could foreclose on its nominal super-priority lien and extinguish a senior mortgage in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., a ruling that initially seemed cataclysmic to the mortgage industry. SFR Investments spawned thousands of contentious quiet-title actions, each pitting the senior … Continue Reading

Rhode Island Joins Lists of True Super-Priority Lien States for Condo Associations

In December 2015, the Rhode Island Supreme Court issued an opinion holding that Rhode Island’s Uniform Condominium Act provides a true “super-priority” lien to condominium owner associations (COAs) when a condominium owner is delinquent in paying the COA assessments. This super-priority lien—applicable to condo association liens only—takes priority over a lender’s first security interest in … Continue Reading

Be Prepared: How to Avoid the Super-Priority Trap

Benjamin Franklin once said, “By failing to prepare, you prepare to fail.” Servicers can face significant obstacles in preservation of their rights vis a vis assessments by homeowners’ associations and condo associations (a “property association”). The most important action servicers can take in addressing this issue, not surprisingly, is foresight and preparation by putting procedures … Continue Reading

Nevada Supreme Court Clarifies Limits to its SFR Investments Decision

In September 2014, the Nevada Supreme Court, in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., held that a portion of a homeowners’ association (HOA) lien for delinquent assessments has true super-priority status over a first deed of trust, meaning that the foreclosure of that lien could extinguish the first deed of trust. Since … Continue Reading

Recovery of Real Property in South Carolina After a Tax Sale

Acme Bank has a problem. Acme loaned $480,000 for the purchase of a beach house on Sullivan’s Island, South Carolina, securing the debt with a recorded mortgage. Six months ago, the bank received a letter from the county tax collector, which unfortunately was overlooked after being routed to the wrong department. Today, Acme was served with a lawsuit … Continue Reading

Florida Appellate Court Bolsters Statutory HOA Safe Harbor

A significant opinion from the Florida Third District Court of Appeal further clarifies the extent of the Florida statutory homeowners association (HOA) “safe harbor.” In the end, entities that obtain title through judicial foreclosures are left satisfied while homeowners associations are left reeling from another nail in the safe harbor coffin. The Florida safe harbor … Continue Reading

Supreme Court of South Carolina sides with MERS in Kubic v. MERSCORP Holdings, Inc.

On March 30 2016, the Supreme Court of South Carolina weighed in on the attempts of several South Carolina counties to make Mortgage Electronic Registrations Systems, Inc. (MERS), and its member banks pay for the correction of inaccurate land records and the remediation of the land records process. In a unanimous decision, the Court sided … Continue Reading

California Supreme Court Weighs in on Standing

The California Supreme Court recently held that borrowers may have standing to challenge an assignment of a deed of trust in a wrongful foreclosure action where they assert that the assignment is void. The decision likely gives defaulted homeowners new avenues to defend against foreclosures and gives lenders more reason to closely scrutinize assignments, especially … Continue Reading

Florida Court of Appeals Finds Notice of Assignment Not Condition Precedent to Foreclosure Suit

In January, the Florida Second District Court of Appeals—addressing an issue of first impression in the Florida district courts of appeal—held that providing written notice of assignment of a note described in Fla. Stat. § 559.715 is not a condition precedent to foreclosure. In Brindise v. U.S. Bank Nat’l Assoc., the noteholder acquired borrowers’ note by … Continue Reading

Indiana Court Weighs in on Deficiency Judgments

The Indiana Court of Appeals recently held that creditors must move for an in personam remedy in the original foreclosure judgment or forfeit their right to collect deficiency funds. In Elliott v. Dyck O’Neal, the bank foreclosed upon a borrower’s residence, and sought judgment against the borrowers for the full amount of the outstanding balance … 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

Post-Foreclosure Sale Tenant Protections Proposed in Florida

Florida Senate Bill 524 and House Bill 779 would provide certain protections to tenants after the foreclosure sale of residential property.  The bills, both of which were introduced on March 3, 2015, would add back certain tenant protections that previously existed under the federal Protecting Tenants at Foreclosure Act (PTFA), which sunset on December 31, … Continue Reading

Wisconsin Foreclosure Sale Process Just Got a Lot Faster

Recently, in Bank of New York Mellon v. Carson, the Wisconsin Supreme Court issued a decision that, in the words of Justice David Prosser, Jr., “radically revises the law on mortgage foreclosures” and could significantly obstruct lenders’ efforts to minimize or mitigate their losses. In its decision, the Supreme Court held that circuit courts have … Continue Reading
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