Category Archives: State Law Developments

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Will Oregon Mandate Closing Services and Title Insurance for Cannabis Transactions?

A proposal pending in the Oregon Legislative Assembly would limit title insurers’ potential grounds for refusing to insure certain real property transactions involving cannabis. Specifically, HB 2806, presented by Reps. David Brock Smith and Gary Leif, would prohibit title insurers and their affiliates from refusing to close or insure real estate transactions solely because the … Continue Reading

Florida Supreme Court Rules Borrowers Can Recover Reciprocal Attorneys’ Fees Under Section 57.105

The Florida Supreme Court rang in the New Year by casting a blow to lenders and loan servicers in Florida seeking to avoid the entry of attorneys’ fees judgments in borrowers’ favors where the borrowers successfully argued the plaintiff lacked standing to foreclose. On December 31, 2020, the court issued its opinion in Page v. … Continue Reading

What Does CA AB 3088 Mean for Mortgage Servicers? PART II

Last year, our blog, What Does CA AB 3088 Mean for Mortgage Servicers?, examined some new and notable obligations California imposes on mortgage servicers, including requirements to provide forbearance denial notices. In that blog, we promised the publication of a Part II that further expanded upon CA AB 3088. In this Part II, we discuss … Continue Reading

Florida Court Affirms That Merchant Cash Advance Product Not Subject to Usury Statute

This month, a Florida appellate court held that a merchant cash advance (MCA) purchase and sale agreement was not a “disguised loan” and, therefore, was not subject to Florida’s criminal usury statute. MCA purchase and sale agreements, which offer merchants a fast and efficient way to obtain funding for their operations, are not loans. Rather, … Continue Reading

New York Enacts a Moratorium on COVID-19-Related Residential Evictions and Foreclosures

On December 28, 2020, New York passed a new law entitled the “COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020.” The act places a moratorium on COVID-19-related residential real property mortgage foreclosure actions and residential eviction proceedings until May 1, 2021, where a tenant or homeowner has submitted a “hardship declaration” to the foreclosing … Continue Reading

New York Enacts Small Business Truth in Lending Disclosure Requirement Affecting Small Business Loans, MCAs, and Other Forms of Business Finance

A new year brings new compliance requirements for non-banks and fintechs conducting business in New York, including Merchant Cash Advance (MCA) companies. On December 23, 2020, New York Gov. Andrew Cuomo signed SB5470 expanding the New York Financial Services law to require non-banks and fintechs to provide small businesses with lending disclosures similar to those … Continue Reading

New York Enacts New Reverse Mortgage Foreclosure Law

On December 15, 2020, New York Governor Andrew Cuomo signed into law a bill that, among other things, requires reverse mortgage lenders in the state to notify the state’s Department of Financial Services (DFS) and mortgagors of an impending foreclosure action on reverse mortgage borrowers. The legal and regulatory regime governing reverse mortgages rapidly evolved … Continue Reading

What Does CA AB 3088 Mean for Mortgage Servicers?

On September 1, 2020, California passed a new law titled the “COVID-19 Small Landlord and Homeowner Relief Act of 2020.” Although the majority of the new law addresses eviction issues between landlords and tenants, it imposes notable new obligations on mortgage loan servicers as well. This two-part blog series will address those changes. Part I … Continue Reading

NYDFS’s New (and Expanded) Servicer Vendor Management Expectations

Originally proposed by the New York Department of Financial Services (NYDFS) in 2019 and constituting what the Mortgage Bankers Association has described as “the first major update to Part 419 since its adoption almost 10 years ago,” the new Part 419 of Title 3 of NYDFS regulations covers a range of significant issues impacting the … Continue Reading

Eleventh Circuit Holds Plaintiffs Must Have Incurred Concrete Injury for Article III Standing to Sue under FDCPA

Under the Fair Debt Collection Practices Act (FDCPA), debt collectors are prohibited from using “false, deceptive, or misleading representation[s]” in connection with collecting debts. If a debt collector violates the FDCPA, the debt collector may be liable in the amount of the actual damages incurred by a debtor resulting from the FDCPA violation. Further, additional … Continue Reading

New Mortgage Licensing Requirements Come to the West

During this pandemic, both Idaho and South Dakota have been busy adding new mortgage licensing requirements. As discussed below, these new licensing requirements will materially impact mortgage lenders and servicers doing business in these states. Idaho Earlier in 2020, Idaho passed H0401, which amended the definition of “mortgage lender” to include mortgage companies that engage … Continue Reading

Update on Texas Foreclosures Given Statewide Rise in COVID-19 Cases

As we previously reported in April, Texas’s initial approach to foreclosures in light of the coronavirus was “ad hoc” and the decision whether to halt foreclosures was left to the various counties in which the sales were conducted. Since that time, the state has begun reopening but has seen a rise in the number of … Continue Reading

Oregon Passes Mandatory Forbearance Law

On June 30, 2020, Oregon joined D.C., Massachusetts, and New York in passing state-specific COVID-19 mortgage assistance programs into law. This new law further confuses the patchwork quilt of compliance issues for mortgage lenders and servicers. Oregon also became the first state to create an express cause of action allowing borrowers to enforce the state … Continue Reading

FTC and NY AG Target Merchant Cash Advance Companies

On June 10, 2020, the Federal Trade Commission and the  New York Office of the Attorney General filed actions against two merchant cash advance (MCA) companies – RCG Advances and Ram Capital Funding – and individuals associated with both companies in the Southern District of New York and the Supreme Court of the State of … Continue Reading

New York Passes Mandatory Forbearance Law, Inviting Potential Constitutional Challenge

On June 17, New York Gov. Andrew Cuomo signed one of the most far-reaching COVID-19 mortgage assistance state programs yet into law. Affected servicers and lenders will soon need to decide whether they should find a way to comply, or bring a constitutional challenge. The new law mandates that New York-regulated banking organizations and mortgage … Continue Reading

A Good Day for Lenders: Texas Supreme Court Rules that Lenders Still Entitled to Equitable Subrogation for Non-compliant Home Equity Loans

On April 24, 2020, the Texas Supreme Court upheld a lender’s right to equitable subrogation for non-compliant home equity loans, ruling that lenders who fail to cure within the statutorily mandated 60-day period may recoup funds paid to satisfy prior liens. The court’s opinion in Federal Home Loan Mortgage Corp. v. Zepeda answered a certified … Continue Reading

Southern District of Texas Enters Temporary Restraining Order Extending PPP Loan Benefits to Debtor in Bankruptcy

In a potentially ground-breaking decision, Judge David R. Jones of the United States Bankruptcy Court for the Southern District of Texas temporarily enjoined the Small Business Administration (SBA) from denying a Paycheck Protection Program (PPP) loan to Hidalgo County Emergency Service Foundation due solely to its status as a Chapter 11 debtor in bankruptcy. While … Continue Reading

Misrepresentation Claims Not Preempted: Eleventh Circuit Rules Against Preemption in Student Loan Case

As we’ve been tracking for over a year now, courts across the country have addressed the significant question of whether the federal laws governing federally owned or guaranteed student loans preempt state laws placing burdens on servicers of those loans. Last week, the Eleventh Circuit became the latest court to weigh in, holding in Lawson-Ross … Continue Reading

New Nevada Decisions Confirm Additional Ways to Satisfy HOA Superpriority Liens

The Nevada Supreme Court again turned its attention to superpriority liens in the first quarter of 2020, issuing two opinions dealing with tenders, i.e. attempts or offers to pay. These decisions outline additional ways that the superpriority portion of an HOA’s lien can be satisfied, offering hope to lenders embroiled in litigation over the continuing … Continue Reading

Foreclosure in the Times of COVID-19: Some Texas Counties Halt Foreclosures for April Amid Coronavirus Concerns

Many of Texas’ largest counties have suspended foreclosures for the month of April amid coronavirus (COVID-19) concerns, including the state’s two largest counties, Harris and Dallas. Texas Gov. Greg Abbott, however, has yet to issue an executive order or make a general proclamation cancelling all foreclosures statewide. Likewise, the Texas Supreme Court has also declined … Continue Reading

Updates from 12 State Regulatory Agencies Regarding Coronavirus and Related Work from Home Issues

As regulatory agencies provide guidance regarding working from home for financial services professionals while the COVID-19 outbreak progresses, we summarized the additional guidance issued in the recent past and current as of March 24, 2020. California Department of Real Estate Released Frequently Asked Questions Relating to COVID-19 The California Department of Real Estate’s Frequently Asked … Continue Reading

Four Additional States Issue New Guidance Relating to Working from Home; Massachusetts and New York Supplement Previous Guidance

As we continue to follow the trend of regulatory agencies providing guidance allow working from home for financial services professionals while the COVID-19 outbreak progresses, we summarized the additional guidance issued in the recent past and current as of March 19, 2020. Colorado Department of Regulatory Agencies, Division of Real Estate Issued an Advisory on … Continue Reading

Maryland Court of Appeals Bars Confessed Judgment Clauses in Consumer Contracts

A recent decision from the Maryland Court of Appeals provided somewhat surprising new guidance on the permissibility of confessed judgment clauses in consumer contracts. In Goshen Run Homeowners Association, Inc. v. Cisneros, the Court concluded that Maryland’s Consumer Protection Act (the “Maryland CPA”) prohibits all confessed judgment clauses in all consumer contracts. In the underlying … Continue Reading

California’s Proposed “Mini-CFPB” May Increase Scrutiny of Auto Lenders and Other Industry Participants

Earlier this month, California Gov. Gavin Newsom revealed plans to create a state version of the federal Consumer Financial Protection Bureau (CFPB) as part of the state’s proposed 2020-2021 budget. According to the governor’s Budget Summary, “[t]he federal government’s rollback of the CFPB leaves Californians vulnerable to predatory businesses and leaves companies without the clarity … Continue Reading
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