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 1 1

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 2 2

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 in Pennsylvania practitioner in Pennsylvania 3 3

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 4 4

Disclaimer Disclaimer   Limited to PA law and my experience Limited to PA law and my experience here. here.   No claim to provide legal analysis of your No claim to provide legal analysis of your local jurisdiction if not Pennsylvania. local jurisdiction if not Pennsylvania.   But, if it’ ’s a judicial foreclosure state, your s a judicial foreclosure state, your But, if it laws may be similar to ours. laws may be similar to ours.   Know your own jurisdiction’ ’s laws and s laws and Know your own jurisdiction procedures. procedures. 5 5

Basic Vocabulary Basic Vocabulary   Notes Notes   Mortgages Mortgages   Deeds Deeds   Assignments Assignments   Loan Modification Agreement Loan Modification Agreement   Reinstatement Letter Reinstatement Letter   Payoff quote Payoff quote   Foreclosure Complaint (in rem action) Foreclosure Complaint (in rem action) 6 6

The Economic Situation The Economic Situation   Woody Guthrie would be appalled Woody Guthrie would be appalled   Mortgages bought and sold on market Mortgages bought and sold on market   “Tranches Tranches” ” “   Foreclosures driven by hidden Foreclosures driven by hidden investors with minimal risk investors with minimal risk   Investments as a whole are insured Investments as a whole are insured   What triggered 2008 recession What triggered 2008 recession 7 7

The Economic Situation The Economic Situation   Many lenders use servicers as intermediaries Many lenders use servicers as intermediaries   Manage payments, escrow, and send delinquency Manage payments, escrow, and send delinquency notices notices   Foreclosure direction sent to specialist firms Foreclosure direction sent to specialist firms   Little direct contact with their client Little direct contact with their client   Lenders Processing Service and similar computer Lenders Processing Service and similar computer interaction interaction   Source of frustration, delay and lack of communication Source of frustration, delay and lack of communication on unusual issues on unusual issues   Foreclosure firms get paid minimal amount per task Foreclosure firms get paid minimal amount per task 8 8

Why are homeow ners Why are homeow ners delinquent? 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 (more later) Predatory lending (more later) 9 9

Foreclosure crisis: local Foreclosure crisis: local filings and national focus filings and national focus   Federally- -sponsored attempts to encourage loan sponsored attempts to encourage loan Federally modifications have largely failed modifications have largely failed   Troubled Asset Relief Program Troubled Asset Relief Program   HAMP HAMP   Positive and negative reports from different sides Positive and negative reports from different sides   Thousands of local filings each year in Bucks County Thousands of local filings each year in Bucks County alone alone   Competing values: families v. investments Competing values: families v. investments   No “ “pot of gold pot of gold” ” for attorneys for attorneys No   Many defendants are pro se Many defendants are pro se 10 10

The Foreclosure Process in PA If The Foreclosure Process in PA If You Defend You Defend   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 in various counties Mediation program in various counties   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 11 11

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 Private right of action for actual damages and 2x finance charges, rights of rescissions, costs and finance charges, rights of rescissions, costs and attorney’ ’s fees. s fees. attorney   1 year statute of limitation from closing, but you 1 year statute of limitation from closing, but you can assert it as a defense to foreclosure at any can assert it as a defense to foreclosure at any time. 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 Basic concept: All fees must be disclosed and cannot be excessive. cannot be excessive.   3- -day right of rescission must be given day right of rescission must be given 3 12 12

The Legal Background The Legal Background   Real Estate Settlement and Procedures Real Estate Settlement and Procedures Act, 12 U.S.C. 2601 et. seq. , 12 U.S.C. 2601 et. seq. Act   Implemented by Federal Reserve Board Implemented by Federal Reserve Board Regulation X Regulation X   Private right of action for damages, attorneys Private right of action for damages, attorneys fees and costs fees and 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 13 13