Andrew D. Cotlar Andrew D. Cotlar Your Tool Box for Mortgage - PowerPoint PPT Presentation

Andrew D. Cotlar Andrew D. Cotlar Your Tool Box for Mortgage Your Tool Box for Mortgage Foreclosure Defense V 2.0 Foreclosure Defense V 2.0 Andrew D. Cotlar, Esq. Andrew D. Cotlar, Esq. Cotlar & Cotlar Cotlar & Cotlar 23 West. Court St. 23 West. Court St. Doylestown, PA 18901 Doylestown, PA 18901 Tel: 215- -345 345- -7310 7310 Tel: 215 Email: Acotlar@hotmail.com Acotlar@hotmail.com Email: www.cotlarlaw.com www.cotlarlaw.com

A Massive Re - -Allocation of Allocation of A Massive Re Wealth Wealth But a many a starving farmer But a many a starving farmer The same old story told The same old story told How the outlaw paid their mortgage How the outlaw paid their mortgage And saved their little homes. And saved their little homes. … … Yes, as through this world I've wandered Yes, as through this world I've wandered I've seen lots of funny men; I've seen lots of funny men; Some will rob you with a six Some will rob you with a six- -gun, gun, And some with a fountain pen. And some with a fountain pen. And as through your life you travel, And as through your life you travel, Yes, as through your life you roam, Yes, as through your life you roam, You won't never see an outlaw You won't never see an outlaw Drive a family from their home. Drive a family from their home.   - -Woody Guthrie, Pretty Boy Floyd Woody Guthrie, Pretty Boy Floyd

Our Game Plan Today Our Game Plan Today   Basic Vocabulary Basic Vocabulary   Background/ overview of process Background/ overview of process   Legal background Legal background   How to get paid How to get paid   Initial Interview; getting started Initial Interview; getting started   Answer and Counterclaims Answer and Counterclaims   What if there’ ’s a default? s a default? What if there   Discovery Discovery   Bankruptcy Bankruptcy   Settled solutions Settled solutions   HAMP Overview and Enforcing Loan Modifications HAMP Overview and Enforcing Loan Modifications

Today’ ’s Goals s Goals Today   Provide tools to handle a foreclosure Provide tools to handle a foreclosure defense defense   Honorably and fairly Honorably and fairly   Without losing money Without losing money   Based on my experience as general Based on my experience as general practitioner practitioner

Mortgage Foreclosure Mortgage Foreclosure Basic Vocabulary Basic Vocabulary   Notes Notes   Mortgages Mortgages   Deeds Deeds   Assignments Assignments   Loan Modification Agreement Loan Modification Agreement   Reinstatement Letter Reinstatement Letter   Foreclosure Complaint (in rem action) Foreclosure Complaint (in rem action)

The Economic Situation The Economic Situation   Woody Guthrie would be appalled Woody Guthrie would be appalled   Mortgages bought and sold Mortgages bought and sold   Investors sue to foreclose Investors sue to foreclose   Filed by foreclosure mill law firms Filed by foreclosure mill law firms   Little contact with their client (LPS) Little contact with their client (LPS)   Why are homeowners delinquent? Why are homeowners delinquent?   Lost jobs Lost jobs   Medical emergency and no insurance Medical emergency and no insurance   Divorce Divorce   Profligacy Profligacy   Unexpected sudden debts Unexpected sudden debts   Predatory lending Predatory lending   Federal attempts to encourage loan modifications have largely failed iled Federal attempts to encourage loan modifications have largely fa   Competing values: families v. investments Competing values: families v. investments   No “ “pot of gold pot of gold” ” for attorneys for attorneys No

The Foreclosure Process: Overview The Foreclosure Process: Overview Reassure Your Client: It Doesn’ ’t Happen t Happen Reassure Your Client: It Doesn Immediately Immediately   2 months of arrearages 2 months of arrearages   Act 91 Notice Act 91 Notice   30 day extension if you consult with credit counselors and apply for 30 day extension if you consult with credit counselors and apply for emergency loans emergency loans   Foreclosure Complaint filed Foreclosure Complaint filed   Mediation program, Bucks County Mediation program, Bucks County   Answer filed (or default judgment if no answer) Answer filed (or default judgment if no answer)   Foreclosing attorney lists for trial if answer filed Foreclosing attorney lists for trial if answer filed   Obtain judgment at trial Obtain judgment at trial   Schedule Sheriff’ Schedule Sheriff ’s sale s sale   May be several adjournments of Sheriff’ ’s sale s sale May be several adjournments of Sheriff   Sheriff’ Sheriff ’s sale held; deposits made s sale held; deposits made   Sheriff’ ’s deed issued and transfer of property at Settlement s deed issued and transfer of property at Settlement Sheriff   Separate action in ejectment if necessary Separate action in ejectment if necessary

The Legal Background The Legal Background   Truth in Lending Act, 15 USC 1601 et seq. , 15 USC 1601 et seq. Truth in Lending Act   Private right of action for actual damages and 2x finance Private right of action for actual damages and 2x finance charges, rights of rescissions, costs and attorney’ charges, rights of rescissions, costs and attorney ’s fees. s fees.   1 year statute of limitation from closing, but you can 1 year statute of limitation from closing, but you can assert it as a defense to foreclosure at any time. assert it as a defense to foreclosure at any time.   Details are specified at Federal Reserve Board Details are specified at Federal Reserve Board Regulation Z Regulation Z   Basic concept: All fees must be disclosed and cannot be Basic concept: All fees must be disclosed and cannot be excessive. excessive.   3- 3 -day right of rescission must be given day right of rescission must be given

The Legal Background The Legal Background   Real Estate Settlement and Procedures Act, 12 , 12 Real Estate Settlement and Procedures Act U.S.C. 2601 et. seq. U.S.C. 2601 et. seq.   Implemented by Federal Reserve Board Regulation X Implemented by Federal Reserve Board Regulation X   Private right of action for damages, attorneys fees and Private right of action for damages, attorneys fees and costs costs   3 year statute of limitations 3 year statute of limitations   Prohibits kickbacks, unearned fees, etc Prohibits kickbacks, unearned fees, etc   Requires HUD sheet to be accurate Requires HUD sheet to be accurate   Servicing requirements if you challenge the calculation of Servicing requirements if you challenge the calculation of amounts owed, e.g. no credit reporting while they verify. amounts owed, e.g. no credit reporting while they verify.

The Legal Background The Legal Background   Pennsylvania Act 91, 35 P.S. 1690.401c et , 35 P.S. 1690.401c et Pennsylvania Act 91 seq. seq.   No private right of action No private right of action   Violations of notice provisions are a defense to Violations of notice provisions are a defense to foreclosure actions foreclosure actions   Was inoperative for a brief period in 2011 Was inoperative for a brief period in 2011 because of lack of funding; now active again because of lack of funding; now active again retroactively retroactively   More on this later More on this later

The Legal Background The Legal Background   Pennsylvania Act 6, Loan Interest and Protection Loan Interest and Protection Pennsylvania Act 6, Law of 1974, 41 PS 101 et seq. Law of 1974, 41 PS 101 et seq.   Limited to home loans $50k and below Limited to home loans $50k and below   Anti- -usury law requiring notices prior to foreclosure usury law requiring notices prior to foreclosure Anti   Independent private right of action Independent private right of action   Plaintiff can recover excessive interest x3, costs and Plaintiff can recover excessive interest x3, costs and attorney fees attorney fees   Statute of limitations is 4 years Statute of limitations is 4 years   Lots of exceptions; big one is for national banks, which Lots of exceptions; big one is for national banks, which follow more favorable federal law follow more favorable federal law

The Legal Background The Legal Background   Pennsylvania Mortgage Bankers and Pennsylvania Mortgage Bankers and Brokers and Consumer Equity Protection Brokers and Consumer Equity Protection Act, 63 PS 456.101 et. seq. , 63 PS 456.101 et. seq. Act   Applies to principal less than $100k Applies to principal less than $100k   No private right of action No private right of action   Lots of restrictions on balloon rates, negative Lots of restrictions on balloon rates, negative amortization, etc. amortization, etc.   Doesn’ ’t apply to assigns of the loans t apply to assigns of the loans Doesn