Skip to main content

Search

Consumer Banking and Payments Law: 11.8.2 FHA Electronic Signature Requirements

In early 2014, HUD specifically approved electronic signatures for FHA mortgages.612 HUD’s instructions for the use of electronic signatures include numerous protections to ensure that the mortgagor—the homeowner—intended to sign the actual document to which the electronic signature is attached, and that the document cannot be changed after this signature is attached. The instructions contain the following:

Consumer Banking and Payments Law: 11.1.4a The General Rule As to Validity of Electronic Records and Signatures

E-Sign provides that, notwithstanding any statute, regulation, or other rule of law, a signature, contract, or other record may not be denied legal effect, validity, or enforceability solely because it is in electronic form, and a contract may not be denied legal effect, validity, or enforceability because an electronic signature or record was used in its formation.24 For example, a contract may meet a statute-of-frauds requirement and be legally binding even if it is based on email communications.

Fair Debt Collection: 4.7.3.1 Generally

The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails . . . who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.391

Fair Debt Collection: 4.7.5.2.2 Conduct of judicial foreclosures

While the Obduskey Court left for another day the question of whether those who enforce mortgages through judicial procedures are subject to all FDCPA provisions,521 courts after Obduskey consistently find that they are subject to all FDCPA provisions.522 This means that a multi-state foreclosure law firm may not have a principal purpose of enforcing security interests where it conducts nonjudicial foreclosures in some states, and judicial foreclosures in others.

Mortgage Servicing and Loan Modifications: 7.6.1 Introduction

As described throughout this chapter, the GSEs have developed loss mitigation options that provide borrowers in distress with viable alternatives to foreclosure. For example, in response to the COVID-19 pandemic, the GSEs implemented flexible loss mitigation options with minimal barriers to access.313 Unfortunately, as the GSEs implemented their new loss mitigation options, they simultaneously undercut these efforts through a program that sells off many of the loans they own or guarantee.

Fair Debt Collection: 4.7.5.2.3 Mortgage servicers, foreclosure trustees, foreclosure law firms, and owners of loans

Most mortgage servicers do not have foreclosures as a principal purpose. Servicers spend most of their time managing loans that are not in default, collecting timely payments, managing escrow accounts, and providing accounting services to borrowers and investors.535 Servicers regularly file and collect on proofs of claims in bankruptcy cases where many borrowers are not in default on the mortgage loan.

Fair Debt Collection: 4.8.9.1 Generally

The term [“debt collector”] does not include . . .

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . (iii) concerns a debt which was not in default at the time it was obtained by such person;660

Consumer Bankruptcy Law and Practice: 10.3.3 Objections to Exemptions

The Code allows objections to claims of exemption by “a party in interest,” again specifying no procedure.337 The procedure is provided by Bankruptcy Rule 4003(b), though the rule does not prescribe any particular form for the objection,338 but it seems clear that an objection initiates a contested matter under Bankruptcy Rule 9014. In most cases the party who would be likely to object is the trustee.

Consumer Bankruptcy Law and Practice: 11.6.2.1 Generally

There are certain claims that the debtor cannot pay within the time period of the proposed plan, which can never exceed five years,438 simply because they are large long-term obligations that have many years of payments remaining before they are due to be fully satisfied. Section 1322(b)(5) allows the debtor to cure a default on such an obligation within a reasonable period of time without having to pay the entire debt balance within the time period of the plan.

Unfair and Deceptive Acts and Practices: 12.3.2.1 How Are Direct Damages Calculated: Out of Pocket, Loss of Bargain, or Cost to Repair?

UDAP statutes should be liberally construed to authorize the broadest damage remedy possible.100 Because of UDAP statutes’ remedial purpose, common law principles limiting damages between merchants are often inappropriate.101 Just as courts fashioned different rules of damages for different types of contract, equity and tort actions, they should fashion new remedial rules of damages under UDAP statutes allowing recovery of “actual” damages or “restitution.” UDAP awards should not be limited to c

Unfair and Deceptive Acts and Practices: 12.3.2.4.3 Restitution under California Law

The scope of restitution is particularly well-developed under the California Unfair Competition Law, one of California’s two UDAP statutes, which allows restitution but not damages. (California’s other UDAP statute—the Consumers Legal Remedies Act—allows both restitution and damages.179) The California Supreme Court defines restitution as “compelling a . . .

Unfair and Deceptive Acts and Practices: 12.3.3.7 Attorney Fees As Consequential Damages

Often one of the greatest consequential costs to a consumer of a UDAP violation is the expense of hiring an attorney to untangle the problems caused by the deceptive practice. Most UDAP statutes authorize a prevailing consumer to recover attorney fees required to obtain the UDAP judgment, so that it will be unnecessary to recover these same costs as consequential damages. But some UDAP statutes do not do so, or make such an award discretionary with the court.