A California lawsuit where the court roundly criticized both parties for overreaching was among the activity in recent servicing-related lawsuits. Other cases involved a 1099 that one plaintiff says shouldn’t have been issued after the foreclosure of his house, a court order into arbitration and another court order into mediation.
In McClusky v. Century Bank, judgment for the defendant was entered on March 2. Henry McClusky brought a breach of contract action, alleging that Century Bank violated a settlement order by issuing McClusky a 1099.
Century Bank believed that the settlement order in the case canceled the $159,479 in debt allegedly owed by McClusky after the foreclosure of his house and litigation over the question of whether the bank had mitigated damages during the selling of the property.
The court in Peters v. JP Morgan Chase ordered on Feb. 18 that the status conference hearing scheduled for Feb. 20 be canceled until further notice. The breach of contract case deals with allegations that, although Lauren Peters paid her property tax and insurance directly until 2009, Chase created an escrow account in 2002 that also paid insurance and property taxes for the property.
Chase first applied Peters’ mortgage payments to the escrow account to cover insurance and tax costs. The remainder was then applied to the mortgage, resulting in double payment of tax and insurance liabilities and underpayment of Peters’ mortgage.
When Chase moved to foreclose on the property in 2009, Peters investigated the reason for the foreclosure and discovered the double tax and insurance payments. Peters said in court papers that her requests for an accounting were ignored. She sued, claiming breach of contract and asking for a declaration of the amount due on her mortgage.
A reply to a response to a motion was filed on March 9 in Lupo v. Chase. Specialized Loan Servicing, one of the defendants, submitted the reply in support of its renewed motion to dismiss the plaintiff’s amended complaint. The motion to dismiss based on improper venue or transfer based on forum non-convenience was denied.
The case arose from the foreclosure of Lupo’s Texas property. Lupo contended that the foreclosure was improper because of erroneous escrow accounting by Specialized and its predecessor loan servicer.
On Jan. 9, the court issued an opinion paring the complaint down to two causes of action in Heurlin v. CitiMortgage Inc. In so doing, the court had strong words for both parties.
“This case is a textbook example of a plaintiff taking a relatively few and perhaps even improbable alleged facts, attempting to wrap some 12 legal theories around them, resulting in an excessively long and overcharged complaint,” said the California appellate court in reinstating the causes of action for breach of contract and unfair competition. “It is also a textbook example of a defendant attempting to accomplish more than is possible with a demurrer.”
The Heurlins alleged that they could not qualify for a public benefits program to pay their mortgage after facing unemployment because Citi erroneously reported their mortgage in arrears and failed to correct the report.
In Banquez v. National Bank Trust Co., a New Jersey state appellate court ordered the parties into arbitration on Feb. 3.
Alicia Banquez was unable to make her mortgage payments in 2009, according to the court’s opinion. On May 20, 2009, and again on Aug. 3, 2009, the servicer of the loan sent Banquez a notice of intention to foreclose as required under the state’s Fair Foreclosure Act. Both notices contained contact information concerning the loan servicer but did not disclose the name and contact information of the lender.
Deutsche Bank then filed a complaint to foreclose on Banquez’s property on Nov. 30, 2012. After Banquez and Deutsche Bank agreed to a loan modification, Deutsche Bank dismissed the foreclosure. Banquez then filed a class action complaint, alleging that the the notice of intention she received were legally defective because they did not include the name and contact information of the lender as required by the law.
Deutsche Bank sent Banquez’s counsel a letter electing to arbitrate Banquez’s claim under the agreement. When Banquez did not voluntarily dismiss her complaint, Deutsch Bank moved to compel arbitration. The motion court declined to order arbitration.
On March 11, a scheduling order was entered in Hosler v. Nationstar Mortgage. In the order, the court determined that settlement of the case could be enhanced by early mediation.
Settlement talks are already underway as Bank of America has made a written settlement offer and Thurman Hosler has responded, according to court papers. In addition, Hosler requested loan modification and the parties are evaluating whether a loan modification will be offered.
Hosler alleged violation of the Truth in Lending Act and breach of the implied covenant of good faith and fair dealing. Hosler’s claims arise out of allegations that the bank caused force-placed insurance to be issued against his residential property without making the required disclosures and charged him unreasonable and inflated premiums for the insurance.
