Mortgage Servicing 101 — UPDATED

In Villarreal v. Wells Fargo Bank, the Fifth Circuit published a straightforward Rule 12 affirmance in a mortgage servicing case, likely to make abundantly clear what law governs several recurring issues in such cases.  Those principles include: (1) a plaintiff’s failure to allege her own performance bars a breach of contract claim, (2) a negligence claim about servicing should arise from a duty independent of the contract, (3) a wrongful foreclosure claim requires allegation of the allegedly grossly inadequate price, and (4) typical mortgage servicing activity is “incidental to the loan” and does not create DTPA standing.  No. 15-40243 (Feb. 26, 2016).  (See also the recent case of Meachum v. Bank of New York, No. 15-10237 (Jan. 11, 2016, unpublished).