The Seventh Circuit Court of Appeals recently dismissed a borrower's putative class action lawsuit under the Illinois Consumer Fraud and Deceptive Business Practices Act, alleging that a lender and insurer fraudulently insured the borrower's property after the borrower's homeowner's policy expired. In Cohen v. American Security Insurance Co., 735 F.3d 601 (7th Cir. 2013), the homeowner held a secured loan with Wachovia Mortgage, FSB, which required her to maintain homeowner's insurance on the residence as a condition of her loan agreement. When the homeowner's policy lapsed, Wachovia purchased replacement coverage at a rate more than twice as expensive as she had previously paid. Id. at 603. Wachovia charged the homeowner for the cost of the replacement coverage. Id. The coverage procured by Wachovia also included a commission to Wachovia's insurance agent affiliate, a feature allowed under the loan agreement. Id.
The First Circuit has affirmed a holding finding that no private right of action exists for homeowner-borrowers under the Home Affordable Modification Program ("HAMP"), bringing clarity on this issue to courts within the Circuit. In the underlying mater, Mackenzie v. Flagstar Bank, FSB, 2013 WL 139738 (D. Mass. Jan. 9, 2013) aff'd, 2013 WL 6840611 (1st Cir. Dec. 30, 2013), Magistrate Judge Bowler of the United States District Court had held a borrower is not an intended third-party beneficiary of the Servicer Participation Agreement ("SPA") among the banks and the federal government relating to HAMP. The District Court further held that absent an independent duty to modify the mortgage, neither the existence of a mortgagor-mortgagee relationship nor HAMP itself created any duty enforceable by the borrower.
In the fall of 2012, voters in both Colorado and Washington introduced a new era in the United States when they voted to legalize the sale of marijuana. In response to the landmark referenda, the Department of Justice issued a revised "Guidance Regarding Marijuana Enforcement" on August 29, 2013. The DOJ Guidance noted that the federal Controlled Substances Act includes several important priorities with respect to marijuana, including preventing access of minors to marijuana, preventing revenue from the sale of marijuana going to criminal enterprises, preventing violence, and preventing drugged driving. While the DOJ Guidance states that state and local law enforcement in jurisdictions that have legalized marijuana in some form should remain the "primary means" of addressing marijuana-related activity, the DOJ warns that the federal government may continue to "bring individual enforcement actions, including criminal prosecutions," focused on that activity.