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Student Loan Law: 20 U.S.C. § 1087bb. Allocation of funds

(a) Allocation based on previous allocation

(1) From the amount appropriated pursuant to section 1087aa(b) of this title for each fiscal year, the Secretary shall first allocate to each eligible institution an amount equal to—

(A) 100 percent of the amount received under subsections (a) and (b) of this section for fiscal year 1999 (as such subsections were in effect with respect to allocations for such fiscal year), multiplied by

Consumer Class Actions: Introduction

California’s operative general class action statute, Code of Civil Procedure § 382, was enacted in 1872 as part of California’s Field Code and has remained essentially unchanged.15 California’s second class action statute, the Consumer Legal Remedies Act, is found at Civil Code §§ 1750, et seq., and lists 23 prohibited acts, violations of which form the basis for class actions seeking damages and a wide variety of other remedies.

Mortgage Servicing and Loan Modifications: 11.7a The Merrill Doctrine

Special issues arise when a servicer acts on behalf of a loan owner that is a federal governmental entity. Most often, this occurs when one of the GSEs, such as Fannie Mae or Freddie Mac, owns the borrower’s mortgage loan. In these situations, a court-created rule known as the Merrill doctrine may limit application of otherwise controlling agency principles.

Mortgage Servicing and Loan Modifications: 11.8.2.1 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 co

Mortgage Servicing and Loan Modifications: 11.8.2.2 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

Credit Discrimination: 11.5.3.2.2a Limits on arbitration in schools’ program participation agreements

Effective July 1, 2023, Department of Education (the Department) regulations governing schools’ program participation agreements will prohibit institutions that participate in the Federal Direct Loan Program from “requiring borrowers to agree to mandatory pre-dispute arbitration agreements or waiver of class action lawsuits.”214 Specifically, schools that wish to participate in the Direct Loan Program must agree that they will not:

Credit Discrimination: 12.4.1.5.2 Showing harm to the municipality and causation

In City of Miami v. Bank of America Corp.,80 the Eleventh Circuit reversed a district court’s dismissal of the City’s discriminatory predatory lending claims against Bank of America. The City’s complaint focused on the bank’s practice of directing predatory loan terms towards Black and Latinx borrowers in Miami from 2004 to 2012. The City alleged both intentional discrimination and a discriminatory impact from the bank’s practices.

Mortgage Servicing and Loan Modifications: 11.8.2.4 Effective Date and Retroactive Application

There is no question that the TILA limitation on arbitration agreements in mortgage loans applies to any arbitration agreement entered into after June 1, 2013. This subsection considers the enforceability of arbitration agreements entered into before that date. Two issues are examined. First, whether the TILA requirement was effective as of June 1, 2013, or July 22, 2010. Second, whichever date is used, does the provision prevent the current enforcement of arbitration agreements entered into before the effective date?

Truth in Lending: 13.5.3.1 Introduction

When a lease is terminated early because of a default or early termination, the lessor seeks from the lessee all back unpaid lease payments, and also an additional amount specified in the lease. This chapter will reference this additional amount as the early termination charge whether it is assessed on default or voluntary early termination. This amount has some superficial similarity to a deficiency after a car’s repossession pursuant to a creditor’s security interest. But it is produced by a very different calculation and based on very different principles.

Truth in Lending: 13.5.3.2.1 Reading the formula

Leases specify that the consumer owes any past due lease payments that have not been made, plus any late fees, taxes, and the like. The consumer also owes an early termination charge that typically will be expressed either in terms of an adjusted lease balance or in terms of the remaining lease payments plus the residual value of the leased item. In either case, the lessor will deduct from the consumer’s resulting liability the car’s realized value at early termination.

Truth in Lending: 13.5.3.2.4 Calculations based on remaining lease payments plus the residual value

Other early termination formulas charge the consumer for all the remaining monthly payments plus the residual value less “unearned lease charges” and less the car’s realized value at early termination. Unearned lease charges are rent charges that are due in the months following early termination—that is, the total rent disclosed in the lease less the amount of rent included in the monthly payments up until the early termination date.

Mortgage Servicing and Loan Modifications: 1.1.1 Scope

This treatise covers the law and provides practical advice related to mortgage servicing and mortgage loss mitigation alternatives. It examines federal and state regulation of mortgage servicing, identifies common abusive servicing practices and potential claims, reviews loss mitigation alternatives for borrowers in financial distress, and provides practical guidance on litigating claims against mortgage servicers.

Credit Discrimination: 12.4.1.5.3 Establishing proximate cause in the wake of City of Miami—circuit court rulings

On remand, the Eleventh Circuit duly examined whether “some direct relation” existed between Wells Fargo’s intentional policies and the economic harm that the City of Miami alleged.89 With respect to the claim that the lending policies caused property values to drop, thereby leading to diminished tax revenues, the Eleventh Circuit held that the City’s complaint met the Supreme Court’s proximate cause standard.90 The bank’s practices caused an injury to the City that was quantifiable and dist

Home Foreclosures: 4.6.2a MERS State-Specific Exceptions

MERS’s value to the lending industry rests upon its claim to offer an alternative recording system that operates uniformly nationwide. Because state foreclosure laws are far from uniform, MERS has been forced to react to certain state court rulings that found the MERS business model out of sync with state laws.

Repossessions: 12.9.3.4a State Statutes Other than the UCC

State law other than the UCC may provide additional protections for co-signers. For example, an Illinois statute requires a notice be sent to the co-signor of the primary obligor’s delinquency, and fifteen days must elapse before the creditor can report negatively on the co-signer to a consumer reporting agency.609