In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the United States Supreme Court ruled that the Federal Arbitration Act preempts state laws that prohibit consumer contracts from disallowing class-wide arbitration. On May 5, 2016, however, the Federal Consumer Financial Protection Bureau (CFPB) proposed a new rule that would restore consumer's rights to bring class action lawsuits against banks and other certain financial firms.
The Massachusetts Supreme Judicial Court (the "SJC) has rejected a challenge to the authority of an attorney to conduct foreclosure activities on behalf of clients without specific written authorization to perform those activities. See Federal National Mortgage Association v. Rego, et al., No. SJC-11927, 2015 WL 10895667 (Mass. May 24, 2016). At a foreclosure sale conducted by GMAC Mortgage, LLC, Federal National Mortgage Association ("Fannie Mae") purchased the home formerly owned by Edward and Emanuela Rego. When Fannie Mae filed a complaint for summary process in the Housing Court seeking possession of the home, the Regos argued that the foreclosure sale was void because the attorneys for GMAC lacked authority to undertake foreclosure activities on GMAC's behalf because their actions had not been authorized by a prior writing pursuant to Mass. Gen. L. c. 244, § 14 ("Section 14").
In a post-foreclosure lawsuit, Santos v. U.S. Bank National Association, et al., 2016 WL 3636049 (Mass.App.Ct. 2016), a borrower ("Santos") alleged inter alia that a foreclosing mortgagee ("U.S. Bank") and its loan servicer negligently handled his applications for a HAMP loan modification. Santos argued that the defendants "negligently failed to adhere to the HAMP guidelines in processing his loan modification applications."