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Consumer Banking and Payments Law: 5.5.4.4 Potential for Unlimited Liability

Whether or not an access device was lost or stolen, the consumer’s liability is potentially unlimited if unauthorized charges are not reported within sixty days of the statement (or longer in certain situations). That unlimited liability, however, only applies to charges after the applicable reporting deadline, and only if they could have been prevented with timely notice.

Consumer Banking and Payments Law: 5.6.3.2 Financial Institutions May Not Impose a Fee for Investigations

The institution is prohibited from imposing a fee or other charge upon the consumer for the investigation if a billing error has occurred, even if the error occurred in a different amount or manner than was alleged by the consumer.930 This includes any charge related to the investigation or to documentation, and also any fee for contacting customer service to inquire about a transaction or assert an error.931

Home Foreclosures: 8.8.3.5.1. Individual arbitration

Where an enforceable arbitration agreement forecloses class arbitration, class action litigation in court, and individual court litigation, adequate client representation may require raising the consumer’s claims in an individual arbitration proceeding. While this is not preferred, under some circumstances consumers may achieve good results, particularly if the selected arbitrator has an open mind on consumer claims.

Home Foreclosures: 8.8.3.5.2 Class-wide arbitration

Where an arbitration clause prohibits class-wide arbitration, an arbitrator is unlikely to allow such relief, and a court would almost certainly overturn a class-wide arbitration award. Most, but not all arbitration clauses prohibit class-wide relief—some are silent on the issue.

Home Foreclosures: 15.3.3.3.3 Mortgagee optional election for non-borrowing spouses with HECMs predating August 4, 2014

After several years of continued advocacy by consumers and servicers concerning the significant problems and denials due to MOE deadline issues, HUD substantially revised its policy with the issuance of Mortgagee Letter 2019-15 on September 23, 2019. Like the prior versions of the MOE, Mortgagee Letter 2019-15 gives lenders the option to assign the loan to HUD and allows an eligible non-borrowing spouse to remain in the home.

Home Foreclosures: 5.5.2.7.2 Impact of E-Sign and UETA when state or federal statutes require written notices to borrowers

State statutes mandating foreclosure-related notices to borrowers are typically clear in defining the content of a required written notice and how it must be served. For example, a New York statute requires a ninety-day notice to the borrower before a lender can commence a judicial foreclosure.279 The notice must contain a prescribed text explaining how the New York foreclosure process works and describe steps the homeowner can take to avoid foreclosure.

Mortgage Servicing and Loan Modifications: 11.9.2.1 Scope

The Truth in Lending Act (TILA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), effectively prohibits forced arbitration of disputes involving closed-end loans secured by a dwelling and open-end loans secured by a consumer’s principal dwelling.187 TILA defines a residential mortgage loan as “a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the

Mortgage Servicing and Loan Modifications: 11.9.2.2 Two Separate TILA Provisions Limit Arbitration

In covered mortgage loans, TILA prohibits any terms that require arbitration or any other non-judicial procedure as the method for resolving any controversy or settling any claims arising out of the transaction (hereinafter referred to as the “(e)(1) provision”).197 The parties can agree to arbitration or a similar procedure at any time after a dispute or claim under the transaction arises.198