In a setback for the cause, a federal district court judge in Austin has dismissed our claims in the proposed JPMorgan Chase class action. That case has now gone up on appeal alongside the Sims v. Carrington Mortgage Services case from a federal court in Fort Worth. The judge for the Western District of Texas held, among other things, that interest-only schedules of payment are allowable. That runs directly counter to the express wording of the regulation that the judge cited but did not quote. I feel very strongly that the case was wrongly dismissed, and I am hopeful that the appeal will be successful.

At a minimum, Judge Sparks acknowledged that one of the plaintiff's balloon-note modifications was illegal, but the court then appeared to impose a new form of pre-suit notification on the plaintiff such that a Texas home equity borrower cannot bring a lawsuit to enforce Section 50 unless and until the borrower has given the lender advance notice of the suit and a right to cure. Section 50 itself contains no such pre-suit notice requirement, and several cases have held that a Section 50 lawsuit itself constitutes proper notice of the claim. Again, I don't agree with the decision, and I am hopeful the pre-suit notice requirement will also be reversed.

Hang in there, Texas home equity borrowers. It's still early in the game.