bakerlaw.com 1 Financial Services 2017 Year-End Report 2 FINANCIAL SERVICES 2017 YEAR-END REPORT Table of Contents Introduction 3 Litigation 4 Industry Developments 5 Representative Matters 7 Emerging Issues and Trends 8 Lending 10 Industry Developments 11 Representative Matters 11 Emerging Issues and Trends 12 Regulatory, Compliance and Licensing 13 Industry Developments 14 Representative Matters 16 Emerging Issues and Trends 16 Restructuring 18 Industry Developments 19 Representative Matters 19 Emerging Issues and Trends 20 Conclusion and Contact Us 22 3 FINANCIAL SERVICES 2017 YEAR-END R

The California Court of Appeals recently held that a mortgage (the “Mortgage”) recorded simultaneously with a home equity line of credit (the “HELOC”) had priority and was not entitled to any surplus proceedings from the foreclosure of the HELOC, despite the fact that the HELOC’s instrument number was prior to that of the Mortgage. SeeMTC Fin., Inc. v. Nationstar Mortg., 19 Cal. App. 5th 811 (Ct. App. 2018).

The Nevada Supreme Court recently affirmed a lower court’s decision that a foreclosure under a Nevada statute giving “super priority” to homeowners’ association liens was preempted by the Housing and Economic Recovery Act of 2008 (“HERA”) in a foreclosure in which the Federal National Mortgage Association (“Fannie Mae”) held a mortgage. SeeSatico Bay LLC Series 9641 Christine View v. Fed. Nat’l Mortg. Assoc., 2018 WL 1448731 (Nev. Mar. 21, 2018). In 2004, the borrowers purchased a property with a home loan that was secured by a deed of trust on the property.

New Jersey’s Appellate Division recently reversed a lower court and held that a lender erred by not serving a notice of intent to foreclose (“NOI”) before commencing a foreclosure action on a residential reverse mortgage. SeeNationstar Mortg., LLC d/b/a Champion Mortg. Co. v. Armstrong, 2018 WL 1386247 (N.J. Super. Ct. App. Div. March 20, 2018). In the case, defendant, as his mother’s attorney-in-fact, obtained a reverse mortgage on her home. The mother died shortly thereafter and, pursuant to 24 C.F.R.

For the third time in less than two years, the Eleventh Circuit Court of Appeals has ruled that a chapter 7 debtor who does not reaffirm the secured debt or redeem the property must surrender the property. In re Woide, No. 17-10776 (11th Cir. Apr. 5, 2018).

Toys “R” Us filed for bankruptcy in September 2017, with hopes that a strong holiday season would facilitate a successful reorganization.

A 92-year-old landlord who leased a storefront to a marijuana dispensary will receive a new hearing after a court dismissed her bankruptcy caseon the grounds that acceptance of rent payments from the dispensary disqualified her from bankruptcy relief.

On March 20, the CFPB released updated FAQs to support the implementation of the 2016 Mortgage Servicing Final Rule. Specifically, the updated FAQs pertain to the mortgage-servicing provisions regarding bankruptcy, which are effective April 19. The CFPB released ten bankruptcy-related question and answers.

The United Stated District Court for the Eastern District of Texas recently affirmed a bankruptcy court’s holding that an insured’s claim was barred under the title insurance policy’s exclusion for title risks “created, allowed, or agreed to by” the insured. SeeMoser v. Fidelity Nat’l Title Ins. Co., 2018 WL 1413346 (E.D. Tex Mar. 21, 2018). Kernel and Stanley Thaw (the “Thaws”) were a married couple, and in 2008 a creditor brought an action against Stanley seeking repayment of a debt.

On March 8, the Bankruptcy Court for the Southern District of New York concluded a lengthy “claims estimation” trial to determine the appropriate final settlement price for a resolution of lawsuits filed on behalf of investors in residential mortgage-backed securities (RMBS) created by Lehman Brothers Holdings prior to its bankruptcy in September 2008. The judge determined that the final settlement value of this particular set of claims was $2.38 billion – down from the $37 billion initially demanded, and the $11.4 billion sought by the plaintiffs in this claims estimation trial.