Financial Services Litigation

Under California’s Homeowner Bill of Rights (HBOR), if a borrower obtains injunctive relief or is awarded damages pursuant to Civil Code Section 2924.12(h), the court may award the prevailing borrower reasonable attorney’s fees and costs.

In cases where the court ultimately determines that the mortgage lender or servicer violated the provision of the HBOR outlined in Civ. Code Section 2924.12(a)(1) and (b), the borrower would undoubtedly be entitled to recover attorney’s fees and costs.  However, HBOR does not make clear whether the borrower would be entitled to attorney’s fees and costs in cases where the borrower applies for injunctive relief before the court makes an ultimate decision on the merits of the case. Specifically, the statute does not clarify when (i.e., in what phase of the litigation) the borrower is entitled to an award of fees and costs, nor does it distinguish between permanent and preliminary injunctions. And in the few iterations of the HBOR since it became effective in 2013, Civil Code Section 2924.12 has remained largely unaltered, substantively, on attorney fee and costs rewards for injunctive relief.
Continue Reading California’s Third District Court of Appeal Expands a Borrower’s Right to Attorney’s Fees Under the Homeowner Bill of Rights

Beyond the Financial Services Modernization Act (also known as the Gramm-Leach-Bliley Act), which generally provides that a financial institution may not disclose a customer’s nonpublic personal information unless it falls under one of the general exceptions of 15 U.S.C. § 6802(e) (e.g., consent of the customer or compliance with a properly authorized civil subpoena), the failure to domesticate a subpoena remains one of the most utilized arguments in motions to quash.
Continue Reading Quashing Subpoenas for Borrower Records

The linchpin of the Federal Fair Debt Collection Practices Act (“FDCPA”) is debt collection. Not surprisingly, litigation often focuses on the crucial question of what is a “debt” and who is a “debt collector” for purposes of the FDCPA. In Ho v. ReconTrust Co., NA, the U.S. Court of Appeals for the Ninth Circuit recently concluded that the enforcement of a security instrument by nonjudicial foreclosure is not debt collection as a matter of law.

The Ho court explained that “[t]he object of a non-judicial foreclosure is to retake and resell the security, not to collect money from the borrower[,]” and because “California law does not allow for a deficiency judgment following non-judicial foreclosure[,]” “the foreclosure extinguishes the entire debt even if it results in a recovery of less than the amount of the debt.” On this basis, the Ho court held that “actions taken to facilitate a non-judicial foreclosure, such as sending the notice of default and notice of sale, are not attempts to collect ‘debt’ as that term is defined by the FDCPA.”
Continue Reading McNair v. Maxwell & Morgan PC: Judicial and Nonjudicial Foreclosure—A Distinction With a Difference