A copy of the opinion is available at: http://www.ca9.uscourts.gov/datastore/opinions/2012/07/12/09-16498.pdf.
Following his default, Borrower contacted Defendant Servicer in writing, inquiring about a possible loan modification and requesting the name and address of the owner and holder of his loan. Lender-Servicer allegedly never responded.
In an effort to stop the foreclosure, Borrower filed suit in federal court against Defendant Servicer, MERS, and the owner of the loan, among others. The complaint alleged in part that Defendant Servicer violated section 1641(f)(2) of the federal Truth in Lending Act, ("TILA") by failing to provide Borrower with the requested name of the holder of the loan. Borrower also alleged various violations of Nevada law, including breach of contract, wrongful foreclosure, and breach of the covenant of good faith and fair dealing.
Granting the defendants' motion to dismiss, the district court dismissed without leave to amend. Borrower appealed. The Ninth Circuit affirmed in part, vacated in part, and remanded.
Examining section 1641 as a whole and subsection (f)(2) in detail, the Ninth Circuit noted that section 1641 addresses only entities that are purchasers or assignees of mortgages. See 15 U.S.C. § 1641(a)(a "civil action for a violation . . . may be maintained against any assignee . . . only if the violation . . . is apparent on the face of the disclosure statement, except where the assignment was involuntary. . . ."); 15 U.S.C § 1641(b)(relating to compliance by a "subsequent assignee of the original creditor"); 15 U.S.C §1641(c)("Any consumer who has the right to rescind a transaction . . . may rescind the transaction as against any assignee of the obligation"); and 15 U.S.C §1641(d)("[a]ny person who purchases or is otherwise assigned a mortgage . . . shall be subject to all claims and defenses with respect to that mortgage").
Thus, the Ninth Circuit held that the Borrower was unable to assert a claim under section 1641(f)(2) against Defendant Servicer for failure to provide the requested information, because Defendant Servicer was not a servicer-assignee. On the other hand, the Court noted that, had Defendant Servicer been assigned the loan from another company, Defendant Servicer would have been liable under section 1641(f) for failure to provide Borrower with the information he sought.
In addition, the Court concluded that because Borrower's claim accrued before implementation of the mandate requiring all servicers to respond to requests for information, Defendant Servicer could not be held liable under subsection (f)(2) for failure to respond to the Borrower's requests.
The Court remanded Borrower's wrongful foreclosure and other claims for further consideration in light of the additional legal authority Borrower presented to support his arguments.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.
Our updates are available on the internet, in searchable format, at: