New York Court of Appeals Decision Clarifies RPAPL Notice Requirements, Affirms Heightened Standard for Borrowers

Last year, as we reported, the Second Circuit requested that the New York Court of Appeals rule on two certified questions concerning predicate notices in foreclosure actions. On March 30, 2021, the Court of Appeals issued its decision in Schiffman on the questions certified by the Second Circuit concerning New York Real Property Actions and Proceedings Law (RPAPL) §§ 1304 (90-day predicate notice) and 1306 (pre-foreclosure filing with the superintendent of banks). More ›

CFPB Signals Change by Rescinding Abusive Acts or Practices Policy, With Confirmation of Chopra Likely to be Delayed

On March 11, 2021, the Consumer Financial Protection Bureau (CFPB) announced rescission of its January 24, 2020 Statement of Policy Regarding Prohibition on Abusive Acts or Practices (Policy). In announcing its rescission, the Bureau indicated the Policy did not provide the intended clarity to regulated entities, and declared it inconsistent with the Dodd-Frank Act, including by limiting the Bureau's full scope of supervisory and enforcement authority. More ›

CFPB Issues Interpretive Rule Prohibiting Discrimination on the Basis of Sexual Orientation and Gender Identity

Anti-discrimination efforts are front and center for the Consumer Financial Protection Bureau. This is evident by the interpretive rule it recently issued relating to the Equal Credit Opportunity Act (ECOA) and Regulation B. The rule clarifies that the prohibition against sex discrimination in ECOA and Regulation B encompasses sexual orientation and gender identity discrimination. The prohibition includes discrimination motivated by perceived nonconformity with sex-based or gender-based stereotypes, as well as discrimination based on an applicant's associations. More ›

Landmark New York Court of Appeals Decision Clarifying Calculation of Statute of Limitations in Mortgage Foreclosure Actions

The New York Court of Appeals reversed four Appellate Division decisions and decided in favor of the mortgagees in a consolidated decision issued on February 18, 2021, ruling, inter alia, that:

• a demand letter which includes language that the debt "will be" accelerated expresses a possible future event and therefore does not constitute an unequivocal overt act which would accelerate the mortgage debt; 
• a defective pleading which incorrectly references only the original terms of a loan – not the operative modification agreement – is insufficient to accelerate the mortgage debt;
• a mortgagee's voluntary discontinuance of a foreclosure action is sufficient to revoke the acceleration created by the filing of that complaint; and
• a mortgagee's motivation for the discontinuance and revocation of the acceleration is irrelevant to the Court's analysis.

CFPB Highlights COVID-19-Fueled Regulatory Risks for Examined Industries in Special Edition of Supervisory Highlights

In its recent Special Edition of Supervisory Highlights on COVID-19 Prioritized Assessments, the Consumer Financial Protection Bureau (CFPB) summarized challenges and risks with respect to several industries it had informally examined since the start of the pandemic. Beginning in May 2020, the Bureau rescheduled about half of its planned examinations and instead conducted "prioritized assessments" in response to the pandemic. These assessments included seeking information on how institutions were responding and communicating with consumers, and also examining how institutions were confronting and adapting compliance in response to the pandemic. More ›

Following Fair Lending Investigation, NYS DFS Issues Report, Recommendations, and Mortgage Lender Best Practices

The New York State Department of Financial Services (DFS) issued a report on February 4, 2021, detailing its investigation of the mortgage lending market in the Buffalo metropolitan area. The report includes findings about a "distinct lack of lending" by mortgage lenders, particularly nonbank lenders, in neighborhoods with majority-minority populations and to minority homebuyers in general. More ›

Second Circuit Finds HUD Assignees Immune from State Statute of Limitations Claims

The mortgage foreclosure world continues to experience change at a moment's notice. Lenders continue to defend against borrower actions seeking to discharge their mortgages as time-barred, which in turn has led to the development of several defenses supported by the appellate courts. Whether it is lack of standing to accelerate the mortgage debt, revocation, or re-affirmation of the debt, all of these defenses are not as interesting—and powerful—as full immunity from the statute of limitations. In Windward Bora, LLC v. Wilmington Savings Fund Society, FSB, that's exactly what the Second Circuit found, and its decision could have a substantial impact for lenders in New York and elsewhere. More ›

Illinois Moves to Cap Consumer Loan Interest Rates, Lenders Subject to Penalties and Other Relief

On January 13th, the last day of the Illinois legislature's six-day lame duck session, the General Assembly passed the Illinois Predatory Loan Prevention Act (PLPA) as part of SB 1792.

The PLPA caps consumer loan annual percentage rates at 36% for both open and closed end credit. The 36% APR should be calculated using the system of calculating a military annual percentage rate under federal law, which is widely considered an "all-in" method of calculating rates and fees. The Illinois Department of Financial and Professional Regulation (IDFPR) may issue rules pertaining to the Act. More ›

New York Court of Appeals Finds There is "No Checklist" to Prove Standing to Foreclose, While Leaving Newly-Enacted RPAPL 1302-a for Another Day

The New York Court of Appeals issued two important end-of-the-year decisions on December 17, 2020 in a heavily litigated, affirmative defense in residential mortgage foreclosure actions: the lack of standing to foreclose.

In US Bank N.A. v. Nelson and JPMorgan Chase Bank, National Association v. Caliguri, the court analyzed both the pleading requirements for the defense and the standard of proof required to show standing to foreclose. In one-page, unanimous decisions, the court affirmed the Appellate Division's decisions, which both ruled in favor of the mortgagee. More ›

New York State Passes Eviction and Foreclosure Moratorium Protecting Renters, Homeowners, and Small Landlords

On Monday, December 28, 2020, Governor Andrew Cuomo signed the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020. Among other things, this legislation (S.9114/A.11181) extends certain residential foreclosure and eviction moratoria for renters and homeowners suffering hardship due to the COVID-19 pandemic. More ›