Fifth Circuit Rejects Borrower's Wrongful Foreclosure Claims

In a recent published opinion, the United States Court of Appeals for the Fifth Circuit rejected a borrower's claims for breach of contract, negligence, wrongful foreclosure, and violations of the Texas Deceptive Trade Practices Act ("DTPA").  The plaintiff was awarded legal possession of the property as part of a divorce proceeding.  At origination, the plaintiff's husband was the sole obligor on the note.  After the divorce, however, the plaintiff became the sole obligor on the loan, and the loan went into default again after the divorce proceedings concluded.  The bank sent statutorily required notices of default, intent to accelerate, and acceleration to the property and the husband's mother's residence.  When the plaintiff did not cure the default, the bank foreclosed.