Philip R. Stein

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New York High Court Rules on Statute of Limitations

Over the last several years, we have posted several times about whether the statute of limitations bars remedies against lenders (and sometimes sponsors and trustees) of residential mortgages. (See here, here, and here). One of the most important cases in this area has been ACE Sec. Corp., Home Equity Loan Trust, Series 2006–SL2 v. DB … Continue Reading

Lehman Brothers Seeks to Expand Lawsuits Against Loan Originators

Last week, Lehman Brothers Holdings Inc. (“LBHI”) filed two new motions in its ongoing Southern District of New York Bankruptcy Court litigation against approximately 130 loan originators and brokers: (1) an Omnibus Motion for Leave to File Third Amended Complaints Pursuant to Rule 7015 of the Federal Rules of Bankruptcy Procedure (“Motion for Leave to … Continue Reading

Chase Lets Loose a Barrage of New Indemnification Demand Letters

Ten years after the financial crisis, mortgage companies and regional/local banks are still getting hit with new breach of contract and indemnification claims related to loans sold before the crisis. The latest case in point involves demand letters that JPMorgan Chase is sending out to lenders throughout the country. The letters pertain to loans sold by originators … Continue Reading

A Decade on, Crisis-Era Litigation Still Bedevils Banks

Banks and other financial institutions might reasonably have expected that, 10 years after the collapse of Bear Stearns and the demise of Lehman Brothers, they would finally be free and clear of lawsuits spawned by the financial crisis. That has not come to pass. Nor does freedom from legal actions rooted in the events of … Continue Reading

Lehman RMBS Settlement Likely to Spur Additional Claims

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 … Continue Reading

The Eighth Circuit Raises the Bar for Would-Be Indemnitees

Here is a situation that comes up quite a bit in the world of business contracts containing indemnification provisions, and in the insurance industry as well. First, a party (“Party A”) gets sued, or threatened with a suit, and settles the claims against it.  Party A then seeks indemnification from another party (“Party B”) for … Continue Reading

CFPB Arbitration Rule Eliminated by Congress and President

On November 1, President Trump formally did away with a Consumer Financial Protection Bureau (CFPB) arbitration rule that would have given consumers the opportunity to file class actions against banks and other companies in the financial services industry. The CFPB rule was released in July 2017. It sought to prohibit and eliminate bans against class … Continue Reading

New Wave of Lehman Litigation Appears to Be Imminent

Thousands of mortgage lenders across the country either recently received, or will soon be receiving, this document from Lehman Brothers Holdings, Inc. (LBHI). It is a notice of a motion to approve a proposed settlement of Residential Mortgage-Backed Securities (RMBS) claims asserted by trustees and investors against LBHI over the last few years. The notice … Continue Reading

The New Administration’s Plans for the CFPB Take Shape

For those who have been wondering—as I did in a previous post—what the new presidential administration would mean for the Consumer Financial Protection Bureau (CFPB), an agency that has been in Republicans’ crosshairs virtually since it came into existence, we now have at least the beginnings of a concrete answer. Claiming that the CFPB’s leadership … Continue Reading

Minnesota State Court Defendants Win Partial Summary Judgment Over RFC and ResCap

Wednesday, February 1 brought a welcome development for the many correspondent lenders currently defending against claims filed by (or threatened with future lawsuits by) Residential Funding Company (“RFC”) and its successor-in-interest, the ResCap Liquidating Trust (“ResCap”). There have been three venues in which RFC and ResCap have been litigating, for years now, against correspondent lenders. … Continue Reading

Key Legal & Regulatory Issues for Financial Services Companies in 2017

With 2016 rapidly drawing to a close, here are some thoughts regarding the types of litigation and legal/regulatory issues that will likely be top-of-mind for financial services companies, especially mortgage companies and banks, in 2017: RMBS Suits and Mortgage Repurchase or Indemnification Claims I admit it—I never would have thought, when I started working on … Continue Reading

CFPB Steps Up Oversight of Companies’ Compensation Programs Following Wells Fargo Scandal

The Consumer Financial Protection Bureau (CFPB) will likely be weakened by the incoming Trump administration and its Republican allies in Congress. Exactly how, and how much, remains to be seen, however—and, in the meantime, the agency continues to make its presence felt. Earlier this week, the CFPB warned companies that it oversees to take steps … Continue Reading

Second Circuit Sides With AmEx, Reversing Lower Court Victory for DOJ

The United States Court of Appeals for the Second Circuit, a highly influential appellate court sitting in New York, on September 26 issued a unanimous ruling with major implications for antitrust and unfair competition laws, the payment card industry, and merchants that accept payments by credit card. The Second Circuit reversed a district court win … Continue Reading

CFPB and Banks Battle Over Arbitration Clauses, Class Actions

After the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 authorized its creation, the Consumer Financial Protection Bureau (CFPB) began operating on July 21, 2011. In the more than five years since it opened its doors, the CFPB has rarely appeared shy or hesitant about asserting its authority. Critics—most often the businesses over … Continue Reading

Home Depot Challenges Banks’ Standing to Recover Losses Related to Data Breaches

In the aftermath of major data breaches at deep-pocketed retailers and other businesses, there is typically no shortage of litigants who move quickly to seek compensation from the business at which the breach occurred. But whether the would-be plaintiffs’ claims get very far in court often depends on whether those plaintiffs are individual consumers, or … Continue Reading

“No Injury” Consumer Class Actions Weakened, but Not Killed, by Supreme Court

The U.S. Supreme Court held Monday that the Ninth Circuit erred when it ruled consumers can sue companies without alleging actual injury. The Supreme Court ruled that a consumer could not sue Spokeo Inc. for mere technical violations of the Fair Credit Reporting Act. Its holding left the door open for plaintiffs in other cases to … Continue Reading

A Day of Reckoning for the CFPB?

Virtually ever since its inception on July 21, 2011, the Consumer Financial Protection Bureau (CFPB) has inspired wariness and skepticism `in the financial institutions and financial services providers subject to this new agency’s rather ill-defined “jurisdiction” and enforcement authority. As the CFPB embarked on an unmistakably aggressive campaign to exert authority over various sectors of … Continue Reading

Wells Fargo Pays $1.2 Billion Settlement, Admits Deception in Certifications

Calling the settlement a reproach for “years of reckless underwriting” at Wells Fargo, U.S. Attorney Preet Bharara in Manhattan announced on April 8th that Wells Fargo & Co. formally reached a record $1.2 billion settlement of a U.S. Department of Justice lawsuit. A notable feature of the settlement is Wells Fargo’s specific admission that it … Continue Reading

Fannie and Freddie Adopt IDR Policy for Repurchases

After years of litigation costing tens of millions of dollars, the Federal Housing Finance Agency has hit upon a way to expedite resolution of breach of representation and warranty claims that, if successful, could minimize costs. The FHFA announced that Fannie Mae and Freddie Mac will, from now on, purchase loans that provide for independent … Continue Reading

Big Win for Loan Originators/Sellers in Federal Appeals Court

Six victories that clients of ours had won over Lehman and Aurora in the U.S. District Court for the District of Colorado got affirmed on January 27 by the Tenth Circuit Court of Appeals in Denver after hotly-contested rounds of appellate briefing and oral argument.  In a 37-page written opinion, the appellate panel unanimously affirmed … Continue Reading

Tougher Scrutiny on Cybersecurity at Banks in 2016

Cybersecurity has been a focus as part of bank exams for years. Now the Federal Deposit Insurance Corp. (FDIC) is increasing its scrutiny of banks’ cybersecurity practices to ensure that the issue is getting appropriate attention from bank executives and boards. Bank regulators are planning to make cybersecurity a higher priority during bank exams as early … Continue Reading

Alphabet Soup and Data Security

In the span of two days, mobile device users learned of two data breaches that could compromise their personal data. In one, Experian (a credit reporting agency) reported that it was hacked, potentially putting 15 million American consumers’ data at risk. Many of those consumers were T-Mobile customers who needed to submit to a credit … Continue Reading
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