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Foreclosure Litigation Battles Rage On

Disputed foreclosures are not uncommon. But borrowers in a number of states have had some success fighting servicers in court, and several have been in Florida or Michigan.

A foreclosure judgment on behalf of HSBC Mortgage Services Inc. was reversed by the District Court of Appeal of Florida, Second District. The borrowers, Vasiliy and Marina Goncharuk, had obtained a $233,000 conforming loan in 2006 from The Lending Group. A copy of the decision indicated that the foreclosure had been granted despite that the borrowers were unopposed in a claim that HSBC had not provided the notice of acceleration that the standard language in the mortgage requires it to provide.

Also in Florida, the District Court of Appeal of Florida, Third District, reversed a trial court’s decision to not allow a perfectly legitimate affidavit in a foreclosure filed by TBOM Mortgage Holding LLC.

“Although the plaintiff mortgagee in this “routine” home foreclosure case clearly established its right to a default against the mortgagor, the trial court refused to enter one, giving only what must be called the spurious reason that the non-military affidavit was in some unspecified (because non-existent) way ‘insufficient,” the decision stated. “In fact and in law, the affidavit, which was in the universally accepted form, and was supported by evidence which clearly established that the defendant, who was personally served at his home in Miami-Dade County, was not in the military service, was legally impeccable.”

The District Court of Appeal of Florida, Fourth District, on May 18 issued a decision against Flagstar Bank, FSB, reversing and remanding the case. The court concluded that the borrower, Nudel, was a prevailing party entitled to recover attorney’s fees.

In another Florida lawsuit, the U.S. District Court for the Southern District of Florida ruled that Chase Home Finance will have to put up a $4 million surety bond in its lawsuit to get its foreclosure files back from the law firm of Ben-Ezra & Katz, The Palm Beach Post reported. The files are tied to $400 million in mortgages.

In California, GMAC Mortgage Corp. was denied its application for service upon defendant R. Scott Scheiman by publication in the Santa Clara weekly. The court wrote in its decision that such a manner can only be used when the party “cannot with reasonable diligence be served in any other manner specified” by law. GMAC’s problem was that it had not indicated that it had attempted to serve the subject by mail.

“Thus, GMAC has not demonstrated to the court’s satisfaction that Scheiman cannot with reasonable diligence be served in any other manner specified in Article 3 besides publication,” the decision stated. “Accordingly, it is hereby ordered that GMAC’s application is denied.”

In New York, a civil racketeering lawsuit filed in U.S. District Court against Merscorp Inc. was dismissed, Bloomberg reported. “The plaintiffs settled with another defendant and voluntarily dismissed the case against us,” a Merscorp spokeswoman was quoted as saying.

A foreclosure filed by Bank of America was dismissed by Judge Peter E. Doyne of the Superior Court of New Jersey Chancery Division, according to a news release from Denbeaux & Denbeaux. The judge reportedly ruled that BofA did not have possession and control over the mortgage note and illegally had Wells Fargo send a notice of intent to foreclose.

BofA allegedly violated the Fair Foreclosure Act N.J.S.A., 2A:50-53 to 50-68 and failed to comply with the requirement that lenders must send a Notice of Intent to Foreclose.

The Superior Court in Trenton, N.J., approved a settlement between a lawyer hired by the state and six lenders over allegations they utilized faulty foreclosure affidavits, according to The Record. The lenders are Ally Financial, Bank of America, JPMorgan Chase, Wells Fargo, OneWest Bank and Citibank.

In Michigan, U.S. Bank Home Mortgage lost its motion to dismiss based on an alleged violation of the Real Estate Settlement Procedures Act. The bank was also denied because of wrongful foreclosure claims.

An opinion from Warner, Norcross & Judd LLP indicated that the Michigan Court of Appeals ruled that Mortgage Electronic Registration System Inc. did not have authority under MCL 600.3204(1)(d) to foreclose by advertisement because it did not own an interest in the indebtedness secured by the mortgage. The case, Residential Funding Co v. Saurman, involved a mortgage made by defunct Homecoming Financial LLC.

A federal lawsuit filed by three Michigan borrowers against MERS seeks more than $100 million because of “illegally prosecuted” non-judicial foreclosures, Bloomberg reported. The plaintiffs are calling for the voiding of foreclosures handled through MERS.

A friend-of-the-court brief filed by the Mortgage Bankers Association in a case where the property was already sold by U.S. Bancorp urged the Massachusetts Supreme Judicial Court to validate the title, Bloomberg reported. The trade group reportedly warned that the lower court decision, if upheld, “likely will have adverse implications for hundreds or even thousands of Massachusetts property owners” who are faced with buying similar properties.

Ron and LaRhonda Wilson filed a voluntary petition under Chapter 13 of the U.S. Bankruptcy Code in September 2007. When they allegedly missed several payments, Option One Mortgage Corp. filed a request for a relief from stay. The borrowers claimed they had made the payments and submitted proof of the payments as evidence.

Another hearing was held, at which point Option One acknowledged that it had received three of the missing payments. Counsel for Option One admitted at a subsequent hearing that the account was current. The delayed payment posting was blamed on a delay in setting up the account in the Lender Processing Service system.

But the court also found that inaccurate statements were made by LPS during the foreclosure process.

“The motion for sanctions is granted as to liability of LPS,” the decision said. “The court will conduct an evidentiary hearing on sanctions to be imposed.”

The Court of Appeals of Arkansas reversed a $175,000 award to borrower Linda Yeager against PHH Mortgage Corp. by a lower court. PHH, which serviced a first mortgage for $58,000 and a second-mortgage home-equity line of credit for $63,000, had missed a court hearing in a lawsuit filed by Yeager — who claimed she could have sold her property for $280,000 instead of the $126,000 sale price garnered by PHH had she been given more time.

“We reverse and remand for a new damages hearing,” the Arkansas court wrote.

A foreclosure judgment in favor of Deutsche Bank National Trust Co. was reversed on April 28 by the Supreme Court of New Hampshire. The borrowers, James Kevlik, Catherine Kevlik and Patricia Durgin, said that they had a video of the auctioneer arriving at their house, sitting in the car and leaving without a sale. The supreme court said in its decision that Deutsche had not carried its burden to show ownership of the property.

VASILIY GONCHARUK and MARINA GONCHARUK, Appellants, v. HSBC MORTGAGE SERVICES, INC., Appellee.
Case No. 2D10-2629 (District Court of Appeal of Florida, Second District).

TBOM Mortgage Holding, LLC, Petitioner, v. Cecilia Brown, et al., Respondents.
Case No. 3D11-229, Opinion filed April 20, 2011 (District Court of Appeal of Florida, Third District).

NUDEL v. FLAGSTAR BANK, FSB

(District Court of Appeal of Florida, Fourth District).

GMAC MORTGAGE CORPORATION, Plaintiff, v. R. SCOTT SCHEIMAN, ET AL., Defendants.
Case No. C 11-01288 PSG, decision filed on April 11, 2011 (U.S. District Court for the Northern District of California, San Jose Division).

Campbell v. Baum.

Case No. 10-cv-3800 (U.S. District Court, Eastern District of New York).

Baum v. Lask.

Case No. 11-cv-197 (U.S. District Court, Western District of New York).

In re. Bank of America.

Docket No F-61880-09 (Superior Court of New Jersey Chancery Division: Bergen County).

MARILYN HOUSTON, Plaintiff, v. U.S. BANK HOME MORTGAGE WISCONSIN SERVICING, a wholly owned subsidiary of U.S. Bank, N.A., Defendant.
Case No. 10-13780, decision on May 2, 2011 (U.S. District Court for the Eastern District of Michigan, Southern Division).

Residential Funding Co v. Saurman.

(Michigan Court of Appeals).

Depauw v. Mortgage Electronic Registration Systems Inc.

Case No. 2:11-cv-12032 (U.S. District Court, Eastern District of Michigan).

Bevilacqua v. Rodriguez.

Case No. 10880 (Supreme Judicial Court of Massachusetts).

IN RE: Ron Wilson Sr., LaRhonda Wilson, Debtors.

Case 07-11862 Doc 304, Entered April 7, 2011 (U.S. Bankruptcy Court for the Eastern District of Louisiana).

PHH MORTGAGE CORPORATION, APPELLANT, v. LINDA S. YEAGER, APPELLEE.
Case No. CA 10-868, Opinion Delivered April 27, 2011 (Court of Appeals of Arkansas, Division IV).

DEUTSCHE BANK NATIONAL TRUST COMPANY v. JAMES KEVLIK, et al.
Case No. 2010-249, Opinion Issued: April 28, 2011 (Derry District Court; Supreme Court of New Hampshire).

Copies of some decisions obtained from Leagle.

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