Follow Us

Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Class Actions Landlord Tenant Law Litigation

Second Circuit Expands Federal Class Actions for Mortgagors

The Second Circuit recently held that a bare violation of mortgage satisfaction recording statutes without a demonstration of actual injury conferred federal jurisdiction, meaning that a mortgagor now has the ability to bring a class action in federal court. Thus, statutes designed to be merely remedial in nature can now be used punitively against lenders and servicers.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

In Maddox v. Bank of N.Y. Mellon Trust Co., N.A., 997 F.3d 436, the Second Circuit recently held that individuals have Article III standing to seek statutory damages for a bank’s violation of Real Property Law (RPL) §275 and New Real Property Actions and Proceedings Law (RPAPL) §1921 (together, New York’s Mortgage-Satisfaction-Recording Statutes). The Second Circuit held that, despite no “actual injury,” violations of New York statutory law constitute a concrete and particularized harm giving rise to Article III standing. This is important because under New York rules, a plaintiff could not bring a class action in state court under New York’s Mortgage-Satisfaction-Recording Statutes. Because the Second Circuit held that a bare violation of New York’s Mortgage-Satisfaction-Recording Statutes without a demonstration of actual injury conferred federal jurisdiction, a mortgagor now has the ability to bring a class action in federal court. Thus, statutes designed to be merely remedial in nature can now be used punitively against lenders and servicers.

To continue reading,
become a free ALM digital reader

Benefits include:

*May exclude premium content

Read These Next