Loans are renewed for a number of reasons. But when a borrower has an outstanding judgment lien, lenders must be sure that any renewal does not constitute an advance under the Texas Business & Commerce Code that will subordinate the lender’s security interest in collateral to the judgment creditor’s lien. The Texas Business & Commerce […]
Lender Beware: Loan renewal may cause lender’s security interest in collateral to be subordinated to judgment creditor’s lien.
Reach Of Fair Debt Collection Practices Act Expanded To Formal Foreclosure Pleadings In Recent Third Circuit Decision.
In Kaymark v. Bank of America, No. 14-1816 (3d Cir. April 7, 2015), the Third Circuit held that a borrower can state a claim for violation of the Fair Debt Collection Practices Act (“FDCPA”) when a foreclosing lender alleges incorrect fees as part of a foreclosure complaint. The upshot of this ruling is that a […]
Deficiency Calculations: Fair Market Value At Foreclosure Can Be Based On Post-Foreclosure Sale Price.
Section 51.003 of the Texas Property Code provides that when a foreclosure sale results in a deficiency, any person against whom recovery is sought may request that the court in which a deficiency lawsuit is pending determine the fair market value of the property as of the date of the foreclosure sale. If the court […]
Fifth circuit affirms certification of class holding that Electronic Funds Transfer Act amendment is not retroactive
Beginning in 2010, numerous lawsuits were filed against automated teller machine (“ATM”) operators in Texas asserting violations of the Electronic Funds Transfer Act (“EFTA”). The EFTA protects consumer accounts established primarily for personal, family or household purposes. During the time period at issue in these lawsuits, the EFTA required ATM operators to notify consumers when […]
A taxing decision: Determining whether a form 1099-c should be issued upon discharge of debt
With the 2015 tax filing season upon us, it is important that bankers understand their reporting and filing obligations under the federal income tax laws upon discharge of debt. Generally, for debt that was forgiven during 2014, a creditor should have filed a Form 1099-C by February 28, 2015 if the form was sent by […]
Notes must be analyzed to determine whether a four or six year statute of limitations applies
Practitioners usually state that the limitations period for bringing suit on a promissory note is four years. This view is based on Texas Civil Practice and Remedies Code § 16.004(a)(3) which provides that a person must bring suit on an action for debt not later than four years after the day the cause of action […]
Principal balance paid off by home equity loan is not included in 80/20 calculation
The Texas Constitution details the required terms and conditions of home equity loans and the rights and obligations of borrowers and lenders on such loans. Homeowners who have either entirely repaid their home loans or who have accumulated equity in their homestead may apply for a loan against that equity as long as the home […]