The U.S. Court of Appeals for the Tenth Circuit recently held that a borrowers’ federal court claim attempting to void a foreclosure sale based on a prior demand to cancel the loan under the federal Truth in Lending Act (TILA) was barred by claim preclusion for failure to raise the issue in a prior state court action.

A copy of the opinion is available at: Link to Opinion.

The U.S. Court of Appeals for the Sixth Circuit recently held that a bankruptcy trustee seeking to recover fraudulent transfers could recover direct and indirect loan repayments made after the bank had knowledge of the debtor’s Ponzi scheme, but could not recover deposits not applied to pay back the bank’s debt because the bank was not a “transferee” under the Bankruptcy Code as to ordinary bank deposits.

The Bankruptcy Appellate Panel of the Sixth Circuit recently held that a condominium unit owners association did not violate a debtor’s Chapter 7 discharge order by scheduling a sheriff’s sale to complete a prepetition foreclosure.

Rejecting the bankruptcy court’s conclusion that the in rem foreclosure sale was scheduled to induce payment of discharged pre-petition condominium fees, the Sixth Circuit BAP noted that “all foreclosure litigation potentially can induce payments of discharged debt to avoid a foreclosure sale.”

The District Court of Appeal of Florida, Second District ("Second DCA"), recently held that a notice of assignment of a mortgage loan pursuant to the Florida Consumer Collection Practices Act ("FCCPA"), § 559.715, Florida Statutes, is not a condition precedent to filing a mortgage foreclosure action, but certified the question to the Florida Supreme Court for resolution as one of great public importance. 

The U.S. Court of Appeals for the Ninth Circuit, in a case of first impression, recently held that section 1328(f) of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which bars so-called “Chapter 20” debtors from receiving a discharge at the conclusion of their Chapter 13 reorganization if they received a Chapter 7 discharge within four years of filing the petition for Chapter 13 relief, does not prevent a debtor from voiding a secured creditor’s lien under section 506(d) of the Bankruptcy Code.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit vacated the bankruptcy court’s order confirming a farm debtor’s chapter 12 plan, concluding that the bankruptcy court erred by failing to hold an evidentiary hearing to determine the value of a bank’s collateral where the collateral was disputed. The Panel also concluded that the bank needed to file a proof of claim.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently reversed a bankruptcy court’s disallowance of postpetition interest at the default contract rate, holding that “the bankruptcy court erred in applying a liquidated damages analysis and ruling the default interest rate was an unenforceable penalty,” and also erred in weighing “equitable considerations” to avoid enforcing the contractual default interest rate.

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the bankruptcy court’s denial of a debtor-borrower’s motion for sanctions, which alleged that her mortgage loan servicer violated her bankruptcy discharge by mailing a communication in a purported attempt to collect upon a discharged debt.

The U.S. Court of Appeals for the Fifth Circuit recently held that a mortgagee’s foreclosure action did not violate an automatic stay imposed during one of the plaintiff’s chapter 13 bankruptcy schedules, where the debtor failed to amend his bankruptcy schedules to disclose his recent acquisition of the subject property from his son.

In so ruling, the Fifth Circuit affirmed the trial court’s judgment in favor of the mortgagee because father and son plaintiffs were judicially estopped from claiming a stay violation.

The U.S. Court of Appeals for the Tenth Circuit recently held that the Rooker-Feldman doctrine did not bar the trial court from considering the plaintiff’s claims because she was not challenging or seeking to set aside an underlying non-judicial mortgage foreclosure proceeding under Colorado law.

Accordingly, the Tenth Circuit remanded to the trial court to determine what effect, if any, the non-judicial proceeding had under the doctrines of issue and claim preclusion.