Bisel Logo Residential Mortgage Foreclosure — Pennsylvania Law & Practice

SECOND EDITION

AUTHOR: IRV ACKELSBERG

Published: October, 2014 (Previous Editions: 1st: September, 2012)
Most recent supplement/update: N/A
Library of Congress Control Number: 2012946697
ISBN: 978-0-9910771-4-4

1 VOLUME; SOFT-COVER; PRICE: $115.00


ANNOUNCING THE RELEASE OF THE SECOND EDITION
Since it was first published in 2012, we have heard from practitioners throughout the state that this meticulous and highly readable treatise has been an invaluable practice tool, providing a practical and scholarly discussion about an arcane area of the law previously lacking in legal scholarship. Besides discussing relevant case law, the First Edition explained the cast of characters behind a foreclosure (including a detailed explanation of the role of the mortgage servicer, the non-party entity driving the case); the pre-foreclosure "loss mitigation" obligations of servicers; the widely misunderstood legal history of foreclosure and the long-established role of equity to prevent unfair or unreasonable forfeitures of a family home; and how the various, current "hot issues" (e.g., standing defenses, "robo-signing," loan modifications) play out under Pennsylvania law. Now, just two years later, Bisel is excited to be able to offer this Second Edition, which besides updating the discussion and cited authorities in the original volume, also discusses some important legal developments occurring during the last two years, including:


ABOUT THE AUTHOR
A prominent public interest lawyer and expert in residential mortgages, Irv Ackelsberg joined the firm of Langer, Grogan & Driver in 2006. Previously, Irv practiced for 30 years with Community Legal Services, Inc. ("CLS") of Philadelphia. At CLS, Irv led its consumer law work, concentrating in the areas of consumer credit, foreclosure defense, bankruptcy, and consumer fraud. Irv has been the recipient of the Philadelphia Bar Association's Andrew Hamilton Award for exemplary service in the public interest, and the prestigious Vern Countryman Award from the National Consumer Law Center, for his lifetime achievement on behalf of low-income consumers.

During his tenure at CLS, Irv combined a high-volume home-defense practice with creative, complex litigation and legislative/administrative advocacy. In the area of foreclosure defense, Irv has pioneered many ground-breaking approaches. Besides his litigation experience, he has served as an expert on mortgage issues, has been invited to testify before the United States Senate and the Federal Reserve Board, and advised state agencies on reform strategies.


TABLE OF CONTENTS
Condensed

Chapter
1. Introduction
2. Mortgage Fundamentals
3. The Fundamentals of Mortgage Foreclosure
4. Acts 6 And 91: The Right to Cure, The Notice of Intention to Foreclose and Applying for Help From HEMAP
5. Loss-Mitigation: What's Supposed to Happen and Why It Doesn't
6. Borrower Remedies
7. Challenges to the Plaintiff's Standing to Bring Suit
8. Equitable Defenses to Foreclosure
9. Disputing the Amount Due
10. Other Miscellaneous Defenses
11. Post-Judgment Litigation in the State and Federal Courts
12. Bankruptcy
13. Foreclosure Rescue Scams
  Index


TABLE OF CONTENTS
Detailed

     
PART I
FOUNDATIONS

Chapter 1
INTRODUCTION
§ 1.1. Confronting the Foreclosure Knowledge Deficit
  § 1.1.1. The Hidden Stories Behind a Mountain of Default Judgments
  § 1.1.2. The Stakes: Homeownership as a Cornerstone of Family and Community Stability
  § 1.1.3. The Tarnished Integrity of Both the Housing Finance and Civil Justice Systems
§ 1.2. Planning a Defense: Calming the Client, Extracting the Story, Establishing Realistic Goals and Selecting an Appropriate Legal Strategy
§ 1.3. How the Book Is Organized
§ 1.4. Acknowledgments and Other Important Resources

Chapter 2
MORTGAGE FUNDAMENTALS
§ 2.1. The Legal Nature of a Mortgage Obligation
  § 2.1.1. A Mortgage Is a Debtor–Creditor Transaction Secured by a Defeasible Interest in Real Estate
  § 2.1.2. From The Creditor’s Side: Owning a Note and a Mortgage That Secures Repayment of the Note.
§ 2.2. A Mortgage as Investment Commodity; Introduction to "Securitization"
  § 2.2.1. A Brief History of the GSEs and "Agency" Securitization
  § 2.2.2. The Rise of "Private Label" Securitization
  § 2.2.3. The Cast of Characters in a Typical Securitization
  § 2.2.4. Obtaining the Applicable Securitization Documents
  § 2.2.5. Mortgagor’s Right to Learn Identity of the Beneficial Mortgage Owner
  § 2.2.6. Other Non-Party Entities Behind a Foreclosure
§ 2.3. The Legal Requirements for Transferring Ownership of a Mortgage
§ 2.4. Variations in Mortgages and Mortgage Terms
  § 2.4.1. Purchase-Money and Non-Purchase Money Mortgages
  § 2.4.2. Fixed vs. Adjustable Rate Structures
  § 2.4.3. Scheduled Interest vs. Daily Accrual Interest
  § 2.4.4. "Subprime," "Predatory," and "Exotic" Mortgages
  § 2.4.5. Equitable Mortgages
§ 2.5. Extracting the Story from the Key Documents

Chapter 3
THE FUNDAMENTALS OF MORTGAGE FORECLOSURE
§ 3.1. Pennsylvania Definition of an Action in Mortgage Foreclosure
§ 3.2. Historic Roots of the Action as a Blend of the Law of Contracts, Property and Equity; Defenses to Foreclosure Emerging from This Blend
§ 3.3. Clarifying the Amount at Issue—The Outstanding Debt or the Amount Needed to Reinstate the Mortgage?
§ 3.4. Foreclosure Practice Under the Rules of Civil Procedure
  § 3.4.1. Parties
  § 3.4.2. Pleadings
  § 3.4.2.1. Requests for in personam judgment
  § 3.4.2.2. Verifications
  § 3.4.2.3. Counterclaims
  § 3.4.3. Pretrial Practice
  § 3.4.4. Right to Jury Trial
  § 3.4.5. Enforcement of Judgments and Other Post-Judgment Proceedings
§ 3.5. Local Court Diversion Programs
§ 3.6. Settlement Goals and Strategies
§ 3.7. The Law Firms Driving Foreclosure Cases

PART II
PROTECTING THE HOME BEFORE THE SUIT IS FILED:
A HOMEOWNER’S PRE-FORECLOSURE
RIGHTS AND
REMEDIES UNDER STATE AND FEDERAL LAW

Chapter 4
ACTS 6 AND 91: THE RIGHT TO CURE, THE NOTICE OF INTENTION
TO FORECLOSE AND APPLYING FOR HELP FROM HEMAP
§ 4.1. Introduction
§ 4.2. The Right to Cure
  § 4.2.1. Act 6
  § 4.2.2. Act 91
  § 4.2.3. Amount Needed to Cure: Limitations on Pre-Suit Charges and Fees
  § 4.2.3.1. Property inspection charges and broker price opinions
  § 4.2.4. The Right to Cure in Mortgages Not Covered by Act 6 or Act 91
§ 4.3. The Statutory Right to Notice of Intent to Foreclose
  § 4.3.1. The Effect of Notice Defects on the Right to Foreclose
  § 4.3.2. Required Form and Content of the Notice
  § 4.3.3. Notice Requirements During Periods of HEMAP Suspension
§ 4.4. HEMAP Applications and Eligibility Rules
  § 4.4.1. Application Processing by PHFA
  § 4.4.2. Eligibility Qualifications
  § 4.4.3. The HEMAP Stay Against Foreclosure
  § 4.4.4. Appealing HEMAP denials

Chapter 5
LOSS-MITIGATION: WHAT’S SUPPOSED TO HAPPEN
AND WHY IT DOESN’T
§ 5.1. Loss-Mitigation as a Lender Obligation Under Federal Loan Guaranty Programs
  § 5.1.1. FHA
  § 5.1.2. VA and RHS Loans
§ 5.2. Loss-Mitigation as the Industry Standard for Mortgage Servicing
  § 5.2.1. Introduction
  § 5.2.2. Fannie Mae and Freddie Mac Loans
  § 5.2.3. Loss-Mitigation Under Private Label Securitizations
  § 5.2.4. HAMP Loan Modifications
§ 5.3. The Enforceability of Loss-Mitigation Agreements
§ 5.4. Understanding the Distorting Financial Incentives of Mortgage Servicers

Chapter 6
BORROWER REMEDIES
§ 6.1. Introduction
§ 6.2. Using Respa ’s Right to Account Information to Address Servicing Errors or Abuses
§ 6.3. Using Tila to Enforce the Right to Know Who Owns the Mortgage
§ 6.4. Enforcing the Right to Cure and Other Act 6 Rights.
§ 6.5. Challenging Inaccurate Payment Demands as Illegal Debt Collection
§ 6.6. Inaccurate Credit Reporting
§ 6.7. Tila Rescission
§ 6.8. Predatory Lending Claims
§ 6.9. Considering Bankruptcy Options
§ 6.10. Right to Force Recorded Satisfaction of a Paid Mortgage

PART III
DEFENSES TO FORECLOSURE

Chapter 7
CHALLENGES TO THE PLAINTIFF’S STANDING TO BRING SUIT
§ 7.1. Introduction
§ 7.2. A Securitization Trustee as the Likely Real Party in Interest
§ 7.3. Pleading Requirements Imposed by the Rules of Civil Procedure
§ 7.4. Is the Assignment of Mortgage the Operative Document?
  § 7.4.1. The Role of MERS as Named Assignor of a Mortgage.
  § 7.4.2. The "Robo-Signing" Controversy
§ 7.5. Is the Plaintiff the Party Entitled to Enforce the Note?
  § 7.5.1. Standing of a "Holder" or Other Party Entitled to Enforce the Underlying Note
  § 7.5.2. Distinguishing Between "Holder" and "Non-Holder" Standing
§ 7.6. Is the Alleged Transfer of the Mortgage in Conformity with the Trust Documents?
§ 7.7. Is the Alleged Transfer in Conformity to a Notice of Transfer Issued Under 15 U.S.C. § 1641(G)(1)?

Chapter 8
EQUITABLE DEFENSES TO FORECLOSURE
§ 8.1. General Applicability of Equitable Principles in a Foreclosure Action
§ 8.2. Foreclosures Pursued in Derogation of a Duty to Consider Less Drastic Alternatives
  § 8.2.1. The Fleet and Cobb Decisions and the Inequitable Servicing Defense
  § 8.2.2. Applying Fleet-Cobb as a Generally Applicable Reasonableness Test to Prevent Unfair Foreclosures
  § 8.2.3. Practical Aspects of an "Inequitable Servicing" Defense
§ 8.3. Lender or Servicer Misconduct as "Unclean Hands"

Chapter 9
DISPUTING THE AMOUNT DUE
§ 9.1. Introduction
§ 9.2. Foreclosure Fees and Costs; "Corporate Advances"
§ 9.3. Improper Application of Borrower Payments
  § 9.3.1. Escrow Disputes
  § 9.3.2. Late Charges
  § 9.3.3. Suspense Accounts
§ 9.4. Counterclaims Asserted as Recoupment Defenses
  § 9.4.1. General Applicability of the Recoupment Doctrine to Foreclosure Actions
  § 9.4.2. Assignee Liability for Origination Claims
  § 9.4.2.1. The common-law default rule for assignee liability
  § 9.4.2.2. "Holders in due course" under Article 3
  § 9.4.2.3. High-cost mortgages
  § 9.4.2.4. Home improvement loans
  § 9.4.3. Recoupment Claims Under the UTPCPL
  § 9.4.4. Truth-in-Lending Claims

Chapter 10
OTHER MISCELLANEOUS DEFENSES
§ 10.1. Disputing The Existence of the Mortgage
  § 10.1.1. Challenging the Validity of the Original Mortgage Conveyance
  § 10.1.2. Fraudulent Notarization
  § 10.1.3. TILA Rescission Within Three Years of Non-Purchase-Money Mortgage
  § 10.1.4. Rescissions Under the State "Door-to-Door Sales" Provision
§ 10.2. Deficient Act 6/Act 91 Notice
§ 10.3. Contract Defenses of Illegality or Unconscionability
§ 10.4. Fraud, Misrepresentation or Deception
§ 10.5. The Presumption of Payment

PART IV
AFTER A JUDGMENT

Chapter 11
POST-JUDGMENT
LITIGATION IN THE STATE AND FEDERAL
COURTS
§ 11.1. Direct and Collateral Challenges to a Foreclosure Judgment
  § 11.1.1. Petitions to Strike or Open a Default Judgment
  § 11.1.2. Preclusion Barriers to Post-judgment, Affirmative Litigation
  § 11.1.3. The Right to Cure Survives the Entry of Judgment
§ 11.2. Staying a Scheduled Foreclosure Sale
§ 11.3. Setting Aside a Foreclosure Sale That Has Already Occurred
§ 11.4. Defending an Ejectment Suit
§ 11.5. Deficiency Judgments

Chapter 12
BANKRUPTCY
§ 12.1. Overview of Bankruptcy
§ 12.2. Who Can File
§ 12.3. Automatic Stay
§ 12.4. Curing a Mortgage Delinquency in Chapter 13
§ 12.5. Paying a Mortgage in Full Through a Chapter 13 Plan
§ 12.6. Stripping Down "Underwater" Mortgages
§ 12.7. Using a Bankruptcy to Void Liens
  § 12.7.1. Avoiding Judicial Liens
  § 12.7.2. Using a Trustee’s "Strong-arm" Power to Avoid Unrecorded or Improperly Acknowledged Mortgages

Chapter 13
FORECLOSURE RESCUE SCAMS
§ 13.1. Introduction
§ 13.2. Foreclosure Consulting and Modification Assistance Services
  § 13.2.1. FTC’s Rule on Mortgage Assistance Relief Services (MARS)
  § 13.2.2. Unauthorized Practice of Law
  § 13.2.3. Offers of Credit Repair
§ 13.3. Sale-Leaseback Transactions

Appendix A: MORTGAGE SERVICING RULES UNDER THE REAL ESTATE SETTLEMENT PROCEDURES ACT (REGULATION X), 12 C.F.R. PART 1024, SUBPART C (§§ 1024.30 TO 1024.41)

Appendix B: SUPPLEMENT TO PART 1024, OFFICIAL INTERPRETATIONS OF THE CONSUMER FINANCIAL PROTECTION BUREAU TO SUBPART C— MORTGAGE SERVICING

INDEX

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