Foreclosure 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

In response to the COVID-19 pandemic, the federal and state governments as well as many local governments have established regulations to temporarily suspend foreclosure and eviction activities. Perkins Coie has created an easy-to-use state-by-state guidance tracker for eviction and foreclosure orders related to COVID-19.

In response to the ongoing coronavirus pandemic, New York’s Governor Andrew Cuomo issued two executive orders since March 20, 2020, suspending the state’s statute of limitations for the commencement of new court cases until May 7, 2020. Executive Order 202.14; Executive Order 202.8.

Likewise, New York’s Office of Court Administration issued two memoranda suspending,

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 United States Court of Appeals for the Second Circuit recently made clear that foreclosure actions qualify as “debt collection” under the Fair Debt Collection Practices Act (FDCPA). See Cohen v. Rosicki, Rosicki & Assocs., P.C., 897 F.3d 75 (2d Cir. 2018). Thus, even if a foreclosure action is not seeking a deficiency judgment and the proceeding is strictly in rem, it now falls under the FDCPA debt collection umbrella in the Second Circuit.

In Cohen, the borrower appealed the district court’s dismissal of his FDCPA claims based on the defendants’ allegedly incorrect identification of Green Tree Servicing LLC as the creditor in the foreclosure complaint, certificate of merit, and request for judicial intervention. The basis for the district court’s dismissal of the case was that “enforcement of a security interest through foreclosure proceedings that do not seek monetary judgments against debtors” does not qualify as debt collection within the scope of the FDCPA. The Second Circuit disagreed. Cohen, aff’d, 897 F.3d 75 (2d Cir. 2018)
Continue Reading Second Circuit: Mortgage Foreclosure Constitutes “Debt Collection” Under FDCPA

Because New York residential foreclosures can take several years and several attempts to complete, it is essential for a statute of limitations analysis to be completed during all phases of the foreclosure proceedings. The discussion that follows includes some of the considerations that should be made during a statute of limitations analysis.

Background

Mortgage debt accrues as each installment becomes due, with a six-year statute of limitations running accordingly. CPLR 213(4); Koeppel v. Carlandia Corp., 21 A.D.3d 884, 800 N.Y.S.2d 607 (2d Dept. 2005). Where there is an acceleration clause giving the creditor the right to declare the whole amount due, the six-year statute of limitations begins to run on the full amount of the debt at the time of acceleration. Zinker v. Makler, 298 A.D.2d 516, 748 N.Y.S.2d 780 (2d Dept. 2002); EMC Mortgage Corp. v. Patella, 279 A.D.2d 604, 720 N.Y.S.2d 161 (2d Dept. 2001). While acceleration clauses can be categorized as automatic or optional, most clauses are not considered truly self-operative in nature. Seligman v. Burg, 233 A.D. 221, 251 N.Y.S. 689 (2d Dept. 1931). In most residential foreclosure actions, acceleration occurs at commencement of the action, which would include a provision explicitly calling the entire amount due. See, e.g., Walsh v. Henel, 226 A.D. 198, 235 N.Y.S. 34 (4th Dept. 1929).
Continue Reading Limitations to the New York Foreclosure Statute of Limitations