Opinion ID: 6221503
Heading Depth: 2
Heading Rank: 1

Heading: Bank of America’s mortgage business

Text: To get cash up front from its mortgages, the Bank had signed a forward-flow agreement with Bank of New York Mellon. Under that deal, Bank of America would extend and 2 service mortgage loans, contacting borrowers and collecting payments. For its part, Mellon paid the Bank an upfront fee in return for an income stream from the mortgage payments. If borrowers defaulted on their mortgages, the Bank would handle foreclosure. Then, right before starting a foreclosure, it would assign a defaulting mortgage to Mellon’s subsidiary, the National Residential Assets Corporation. That let Mellon recoup its investment: as soon as the foreclosure was done, Mellon (through National) would take title to the foreclosed property. But when foreclosure proceedings dragged on, mortgages would stay on National’s books longer than expected. That happened to Boltz-Rubinstein. When she declared bankruptcy, National took title to her mortgage. To recover the property, National moved for and got an exemption from the automatic bankruptcy stay. That brings us up to speed. After the bankruptcy judge granted relief from the stay, the Bank sent the disputed letters to Boltz-Rubinstein. She sued, and the Bank claimed that it was exempt from the stay. B. Bank of America’s effort to foreclose on Boltz-Rubinstein’s home Now the heart of the dispute: Everyone agrees that National had an exemption from the stay. But they disagree about whether the Bank did too. The bankruptcy judge ruled for the Bank, finding that it was also exempt as National’s loan-servicing agent. Even if it were not, the judge reasoned, the letters did not cause Boltz- Rubinstein any harm. The District Court affirmed, agreeing that the Bank was exempt as National’s agent. 3 The bankruptcy court had jurisdiction under 28 U.S.C. § 157(b)(1), the District Court reviewed under § 158(a), and we review under §§ 158(d) & 1291. We examine the bankruptcy court’s factual findings for clear error. In re Cohn, 54 F.3d 1108, 1113 (3d Cir. 1995). And we review both its conclusions of law and the District Court’s order de novo. Id.