Frost Brown Todd

Seventh Circuit Upholds Servicer's Assessment Of Late Fees And Negative Credit Reporting

Jacob V. Bradley — Sun, 19 Feb 2012 12:00:00 -0500

In “an all-too-familiar story of our nation’s current economic predicament,” the United States Court of Appeals for the Seventh Circuit recently addressed a servicer’s application of late fees and negative credit reporting when a borrower entered into a forbearance agreement, but remained delinquent on his loan. Collins v. America’s Servicing Co., 652 F.3d 711, 712 (7^th Cir. 2011). Read More ›

Tags: Bankruptcy & Banking Law, Duties to Customers

Lawmakers Investigating Use Of Arrest Warrants Against Debtors

Rebekah G. Ballard — Sun, 29 Jan 2012 12:00:00 -0500

Some lawmakers and regulators are probing the use of arrest warrants by the U.S. debt collection industry to recover money owed by borrowers behind on loans, credit card payments, and other bills. Warrants are generally issued for contempt of court after the borrower fails to comply with a court order to repay a debt or to appear in court. Although U.S. statistics are unknown because many courts do not track the number of warrants issued by offense, judges interviewed by the Wall Street Journal reported that the number of borrowers threatened with arrest has vastly increased since the beginning of the financial crisis. Read More ›

Tags: Legislation & Regulation

Do Lenders Have A Right To Credit Bid On Their Collateral?

Gerald L. Baldwin — Mon, 23 Jan 2012 12:00:00 -0500

Last month, the U.S. Supreme Court agreed to hear another bankruptcy case and this one could have a profound effect on a lender’s bidding rights when its collateral is up for sale. RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166, cert. granted Dec. 12, 2011. In the lower courts, the debtor sought approval of a bankruptcy plan which would have sold the lender’s collateral at auction without allowing the bank to credit bid. The Seventh Circuit Court of Appeals rejected that approach, saying that secured creditors had a right to acquire the property by bidding with their liens. Read More ›

Tags: Bankruptcy & Banking Law, Foreclosures, Liens

The Consumer Financial Protection Bureau Is Now Accepting Mortgage Related Consumer Complaints

Michele Lorbieski Anderson — Sun, 08 Jan 2012 12:00:00 -0500

The Consumer Financial Protection Bureau (“CFPB”), was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, an overhaul of the nation's financial regulations, and is tasked with defending consumer rights with banks, mortgage companies, the credit-card industry, payday lenders and others. On January 5, 2012, the CFPB announced through a post on its blog that its system for processing consumer mortgage complaints has been activated. According to the announcement, the CFPB is accepting mortgage complaints from consumers who have experienced difficulties in the housing market, including problems related to mortgage documents, mortgage servicers, and foreclosure. Financial institutions that receive consumer complaints from the CFPB will have only 15 days to provide a response to the CFPB and institutions are expected to resolve and close all but the most complicated complaints within 60 days. If the consumer submitting the complaint is unsatisfied with the resolution of their complaint, they can dispute the resolution with the CFPB. Read More ›

Tags: Bankruptcy & Banking Law, Dodd-Frank Act, Duties to Customers, Legislation & Regulation

American Law Institute Attempts To Clarify Law Concerning Transfer And Enforcement Of Mortgage Notes

Gerald L. Baldwin — Wed, 30 Nov 2011 12:00:00 -0500

The current “Mortgage Crisis” has prompted many borrowers to challenge the right of a lender or mortgage servicer to bring a foreclosure action, asserting that errors in the process of selling or assigning the note and/or mortgage make it difficult or impossible to enforce those documents. Those contests have often been couched in terms of lack of standing, inability to prove ownership of mortgage documents or invalid/undocumented assignment of those documents. Both counsel and courts have sometimes evidenced uncertainty concerning the applicable law and its impact on these issues. On November 14, 2011, the American Law Institute published a report entitled “Application of the Uniform Commercial Code to Selected Issues Related to Mortgage Notes” which attempts to clarify some of the frequently encountered questions in this area. It can be found at www.uniformlaws.org/shared/committees_materials/PEBUCC/PEB_Report_111411.pdf. Read More ›

Tags: Foreclosures, Liens

Indiana Court Of Appeals Invalidates Arbitration Agreement That Selected NAF As Arbitrator On The Ground It Is Impossible To Perform

Darren A. Craig — Sun, 27 Nov 2011 12:00:00 -0500

In Geneva-Roth Capital, Inc. v. Edwards, the Indiana Court of Appeals considered an issue of first impression in Indiana: when the parties to an arbitration agreement select a specific arbitrator, and that arbitrator is no longer available, does the agreement fail for impossibility? Cause No. 49A02–1101–PL–43, 2011 WL 5566216 (Ind. Ct. App. Nov. 16, 2011). In that case, the defendant lender extended a small, short-term loan to the plaintiff borrower. The loan agreement included an arbitration provision, which provided: Read More ›

Tags: Credit Cards, Duties to Customers, Unfair Trade Practices

Enforcement Of A "Floating Forum Selection Clause" Continues To Be Questionable In Ohio

Gerald L. Baldwin — Sun, 20 Nov 2011 12:00:00 -0500

The Lessor of equipment is in New Jersey; the Lessees (hundreds of them) are all over the east coast. The Lessor has arranged financing by entering into an agreement with an Ohio bank or other funding source. All of the leases provide that the Lessees consent to jurisdiction in the state where the Lessor is located (New Jersey) or, if the lease is assigned to facilitate financing, where the assignee is located (Ohio). The Lessees are all commercial entities, not consumers. Three months later the Ohio bank provides funding and becomes the assignee. After a Lessee defaults and the Bank sues to recover damages or the equipment, is the jurisdictional consent in the forum selection clause effective? Don’t count on it! Read More ›

Tags: Bankruptcy & Banking Law

Sixth Circuit Avoids Bank's Lien Interest In Manufactured Home

Ali Razzaghi — Sun, 20 Nov 2011 12:00:00 -0500

The case of In re Dickson, 655 F.3d 585 (6th Cir. 2011) centered on the status of the debtor’s manufactured home under Kentucky law. In Kentucky, a manufactured home is considered personal property. As such, in order for a lien to be effective, it must be noted on the certificate of title. A manufactured home may be converted to real property, however, if the owner files an affidavit that states it is permanently affixed to real estate and then surrenders title. Read More ›

Tags: Liens

Kentucky Law Regarding Trade Fixtures - More Than Meets The Eye

Denise H. McClelland — Sun, 20 Nov 2011 12:00:00 -0500

Lenders and other creditors often require security interests in the property owned by the borrower or debtor. But how often does the lender examine whether the property is actually a fixture and therefore realty subject to filing as a lien in the real estate records, or a trade fixture, and therefore personal property with the lien recorded as a U.C.C.-1 with the Secretary of State. If the lender or other creditor actually examined the property, how would it determine whether the property is realty or personal property. The size and weight of the property or the “annexation” of the equipment to the real estate with bolts or other methods is not dispositive–but rather the intended use of the property, with the primary test whether the property is used in the course of the tenant’s business for the tenant’s benefit. Thus, a creditor or lender will likely need to know the business use of the property and whether any contract between the tenant and the landlord seeks to identify what would otherwise be deemed personal property as a fixture and therefore realty. Read More ›

Tags: Liens

Money Laundering And Its Implication As To Financial Institutions

Patricia Polis McCrory — Mon, 07 Nov 2011 12:00:00 -0500

Are lawyers and other professionals going to be subject to money laundering regulations? Will lawyers have to submit suspicious activity reports? Suspicious transaction reports? Will there be an international registry of all trusts which would include the names of the settlor, trustee and beneficiaries? As recently as April of 2010, France advocated for such an international registry. Read More ›

Tags: Bankruptcy & Banking Law, Legislation & Regulation