Justia Real Estate & Property Law Opinion Summaries

This case stemmed from a putative class action challenging origination and foreclosure procedures for home loans maintained within the Mortgage Electronic Registration System (MERS). Plaintiffs appealed from the dismissal of their First Amended Complaint for failure to state a claim. The court was unpersuaded that plaintiffs' allegations were sufficient to support their claims. Although plaintiffs alleged that aspects of the MERS system were fraudulent, they could not establish that they were misinformed about the MERS system, relied on any misinformation in entering into their home loans, or were injured as a result of the misinformation. Although plaintiffs contended that they could state a claim for wrongful foreclosure, Arizona state law did not recognize this cause of action and their claim was without a basis. Plaintiffs' claim depended upon the conclusion that any home loan within the MERS system was unenforceable through a foreclosure sale, but that conclusion was unsupported by the facts and law on which they relied. Therefore, because plaintiffs failed to establish a plausible basis for relief on these and their other claims raised on appeal, the court affirmed the district court's dismissal of the complaint without leave to amend.

Plaintiffs, on behalf of a putative class, sued defendant under the Missouri Second Mortgage Loan Act (MSMLA), Mo. Rev. Stat. 408.231-408.241, alleging that defendant charged them unauthorized interest and fees in violation of section 408.233.1 of the MSMLA. At issue was whether defendants violated the MSMLA by charging plaintiffs a loan discount, settlement/closing fee, document processing/delivery fee, and prepaid interest. The court held that plaintiffs did suffer a loss of money when defendant charged the loan discount, although plaintiffs received the loan discount amount two days later as part of a loan disbursement. The court also held that it could not decide whether the loan discount and the settlement/closing fee violated the MSMLA and remanded for further proceedings. The court further held that the document processing/delivery fee was not included in section 408.233's exclusive list of authorized charges and violated the MSMLA. The court finally held that because the processing/delivery free violated the MSMLA, the prepaid interest was an additional violation of the statute. Therefore, the court reversed and remanded to the district court for further proceedings.

The first plaintiffs alleged that Fidelity failed to provide a discount, required by its filed rates, when issuing title insurance to homeowners who had purchased a title insurance policy for the same property from any other insurer within the previous 10 years. The second plaintiff brought the same claims against First American. The district court denied their motion to certify a class. The Sixth Circuit affirmed. Although the claims involve small amounts, so that the plaintiffs are likely unable to recover except by class action, the plaintiffs did not establish that issues subject to generalized proof and applicable to the whole class predominate over issues subject to individualized proof. The need to establish entitlement to join the class and the need to prove individual damages are not fatal to class certification, but the Ohio insurance rate structure would necessitate individual inquiries on the issue of liability. The plaintiffs phrased their claims in a way that would require examination of individual policies and whether the company received the requisite documentation for the discount.