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Category Archives: Banking Operations

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Usury in Florida: Penalties

Posted in Banking Operations

There are two “tiers” of penalties for violation of the Florida usury statutes, one civil and the other criminal, and both are severe.  Civil penalties usually involve forfeiture of the entire interest charged (or contracted to be charged), such that only the principal balance may be enforced. If a court determines that unlawful usurious interest… Continue Reading

The Equal Credit Opportunity Act’s Safe Harbor for Assignees

Posted in Banking Operations

In a previous post, we considered whether guarantors are considered to be “applicants” under the Equal Credit Opportunity Act (the “ECOA”), and today, we will consider whether assignees who acquire debt would be subject to penalties under the ECOA. The question turns on whether assignees are considered to be “creditors” under the law. The ECOA… Continue Reading

Overview of the Florida Consumer Collection Practice Act

Posted in Banking Operations, Debt and Judgment Collection

As discussed in a prior post, the Florida Consumer Collection Practices Act (FCCPA) can apply to both debt collectors (like collection agencies) and lenders who seek to collect their own debts.  The FCCPA is broader than the federal Fair Debt Collections Practices Act (FDCPA), which only regulates the behavior of third-party “debt collectors.”  This is… Continue Reading

Do Guarantors Fall Under the Protection of the Equal Credit Opportunity Act?

Posted in Banking Operations

We have discussed the Equal Credit Opportunity Act(“ECOA”), which makes it unlawful for a creditor to discriminate against an applicant in any aspect of a credit transaction on the basis of, among other things, the applicant’s marital status, religion, sex, race, or age. The Federal Reserve Board has enacted regulations to implement this law. One… Continue Reading

Florida Consumer Collection Practices Act Applies to Anyone Collecting a Debt

Posted in Banking Operations, Debt and Judgment Collection

The Florida Consumer Collection Practices Act (“FCCPA”) prohibits anyone attempting to collect a debt from using certain types of abusive, deceptive, and misleading tactics.  In a recent decision, Florida’s Second District Court of Appeals ruled that the FCCPA applies not just to “debt collectors” but also to banks that send demand letters to borrowers whose… Continue Reading

A New Case On Standing to Foreclose

Posted in Banking Operations

Legal standing to foreclose a note and mortgage continues to be an issue that frustrates plaintiffs and delights defense counsel.  Florida courts have consistently held that standing must exist when the lawsuit is filed and the lack of standing cannot be “cured” absent a dismissal and refiling of the case.  At a minimum this adds… Continue Reading

Limits to the Duty to Preserve

Posted in Banking Operations, Commercial Lending, Debt and Judgment Collection

Although a suit against a particular officer of a corporation for sexual harassment would clearly trigger a litigation hold, what must counsel do about less obvious players in a more abstract dispute?  The recent case of AMC Technologies, LLC v. Cisco Systems, Inc., presents just such an issue. In AMC opinion, decided in the Northern… Continue Reading

U.S. Supreme Court Issues Bank Fraud Decision

Posted in Banking Operations

On June 23, 2014, the U.S. Supreme Court issued its decision in Laughlin v. United States which defined what type of fraudulent activity is punishable under the federal bank fraud statute.  Posing as a Mormon missionary, Kevin Loughrin went door-to-door in a Salt Lake City neighborhood and rummaged through mailboxes looking for checks.  He then… Continue Reading

Documenting a Borrower’s Intent to Apply for Joint Credit under the Equal Credit Opportunity Act

Posted in Banking Operations

The Equal Credit Opportunity Act (“ECOA”) was signed into law by Congress in 1974.  This law makes it unlawful for a creditor to discriminate against an applicant in any aspect of a credit transaction on the basis of, inter alia, the applicant’s marital status, religion, sex, race, or age.  Pub. L. No. 93-495, 15 U.S.C.A…. Continue Reading

The Business Records Exception to the Hearsay Rule

Posted in Banking Operations, Residential Foreclosure

When a bank assigns a mortgage to another bank, the assignor typically provides a loan payment history to the assignee as part of the transfer. If the assignee later brings suit to foreclose the mortgage, it is typical to seek foreclosure via a Motion for Summary Judgment.  In support of such a motion, we include… Continue Reading

“Substantial Compliance” With Notice Requirements Not Enough

Posted in Banking Operations, Commercial Lending, Residential Foreclosure

Florida’s Fifth District Court of Appeal recently emphasized the need for lenders to strictly comply with the notice requirements of a mortgage prior to foreclosure. In Samaroo v. Wells Fargo, the borrower appealed the circuit court’s entry of a summary final judgment of mortgage foreclosure. Finding that the bank failed to strictly comply with all… Continue Reading

Google Case Provides Spoliation Exception to Living Document Safeguard

Posted in Banking Operations

Google has come under scrutiny in the last few years over collecting information from users’ email accounts to provide targeted advertising for its paid clients. In a 2013 case filed in the Northern District of California, Keith Dunbar filed a class action lawsuit against the internet behemoth, alleging that Google had unlawfully and intentionally intercepted… Continue Reading

Obtaining a Deficiency Judgment in Georgia – Overview of Procedures

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Residential Foreclosure, Residential Real Estate Lending

A previous post discussed the non-judicial foreclosure procedure used in Georgia. This post discusses the steps that a Florida bank doing business in Georgia, or with clients owning property in Georgia, must take to obtain a deficiency judgment against the debtor. A power-of-sale foreclosure is truly non-judicial; the procedure does not contemplate any involvement of… Continue Reading

Case Update: Authority to Endorse Note and Mortgage IS Self-Authenticating

Posted in Banking Operations, Debt and Judgment Collection

In our August 29, 2013 post, we reported on a shift in the case law regarding the self-authentification of the authority to endorse a note and mortgage. Subsequently, however, the court in Bennett v. Deutsche Bank National Trust Company granted the bank’s motion for rehearing, and summarily reversed its previous decision. In the subsequent opinion… Continue Reading

Georgia Non-Judicial Power of Sale Foreclosure – Overview of Procedures

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Residential Foreclosure, Residential Real Estate Lending

Given our geographic proximity, it is not uncommon for Florida banks to do business in Georgia or with clients owning property in Georgia. This geographic proximity, however, does not lend itself to equivalence of foreclosure procedures. This is because, unlike Florida, Georgia recognizes non-judicial foreclosures. Indeed, power of sale foreclosures, as they are called, are… Continue Reading

Authority to Endorse Note and Mortgage Not Self-Authenticating

Posted in Banking Operations, Debt and Judgment Collection

This post is no longer current.  The Third Circuit reversed its opinion in Bennett and held that authority is self-authenticating.  For more on the revised opinion, please see our updated post. Establishing the authority to foreclose a note and mortgage is simple when the note and mortgage are held by the original lender. In today’s… Continue Reading

Enforcing a Lost Promissory Note

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Dischargeability of Debts, Loan Sales and Syndications, Residential Foreclosure, Residential Real Estate Lending, Special Assets Litigation

In Florida, it is well established that the original promissory note must be surrendered to the court as a condition of its enforcement. What do you do when you cannot find the original promissory note? Florida Statutes 673.3091 sets out a procedure to follow in order to  “reestablish” a lost note and provides that a… Continue Reading

Usury in Florida: Using the 365/360 Method to Calculate Interest

Posted in Banking Operations, Special Assets Litigation

Many lending institutions use the 365/360 method of calculating interest on their loans.  This method involves applying the ratio of the annual interest over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.  Many state and federal courts have held the… Continue Reading

Usury in Florida: The Limited Application of the Savings Clause

Posted in Banking Operations, Special Assets Litigation

A usury savings clause is a provision in a loan document that attempts to negate any other provisions therein that might result in the extraction of an illegal interest rate. Common examples of savings clauses includes the following: Notwithstanding any provisions in this note to the contrary, no interest, charges, or other payments in excess… Continue Reading

The Perils of Post-Judgment Pre-Sale Modifications

Posted in Banking Operations, Commercial Lending, Commercial Real Estate Lending, Debt and Judgment Collection, Loan Workouts, Residential Foreclosure, Residential Real Estate Lending, Special Assets Litigation

A reasonable workout often remains the prudent choice for defaulted commercial real estate loans even in the context of a pending (or nearly completed) foreclosure action. Thus, it is not surprising that we have seen a number of foreclosure cases where the bank and debtor entered into a modification agreement after obtaining a foreclosure judgment… Continue Reading