In PA, mortgage foreclosures set aside for failure of notice provisions

Thanks to Cynthia Stevens, blog fan:
PENNSYLVANIA SUPERIOR COURT HOLDS THAT ALL FORECLOSURES BASED UPON INCORRECT ACT 91 NOTICES MAY BE SET ASIDE AT ANY TIME; OUR ACT 91 NOTICE WAS CORRECT February 2012                                                                                                                        by  Peter E. Meltzer 
On January 30, 2012, in a decision of major importance to mortgage holders in Pennsylvania, the Superior Court held that the form of Act 91 Notice promulgated by the Pennsylvania Housing Finance Agency does not contain an important provision required by the statute and that, as a result, all residential mortgage foreclosures which began with a defective Act 91 Notice are subject to being set aside at any time. This is so even if the mortgagee or its counsel relied on the Model Uniform Notice (i.e. the approved form) which was issued by the Legislature in connection with the statute.  In particular, the mortgagee is required to notify the borrower that they have a right to a face-to-face meeting with the mortgagee, and not just the consumer credit counseling agency.  The Model Uniform Notice does not contain this required language but most mortgagees and law firms simply relied on that language in sending out their Act 91 Notices and thus they are incorrect. This holding was announced a few weeks ago in Beneficial Consumer Discount Company v. Vukman, 2012 Pa. Super 18 (2012).
The decision is significant because it is jurisdictional, meaning that the issue can be raised at any time, even after a Sheriff’s sale, and will have major repercussions on Pennsylvania foreclosures.   Moreover, the fact that the attorney or lender or loan servicer relied in good faith on the regulations was held not to be a valid defense.
More information can be found here including an entire white paper from Penn. Legal Aid Society:
Avoiding Foreclosure Update 2012 Pennsylvania Legal Aid Network June 12, 2012
Case Summaries Bank of New York Mellon v. Ellis, PA Super April 23, 2012 (summary judgment in foreclosure reversed re no showing of compliance with FHA servicing requirements)
Beneficial Consumer Discount Co. v. Vukman, 2012 PA Super 18 (court set aside mortgage foreclosure sheriff sale based on defect in Act 91 pre-foreclosure notice) Bennett et al. v. A.T. Masterpiece Homes, PA Super. March 6, 2012 (a UDAP issue, UDAP sometimes being used in cases involving mortgage companies)
Cave v. Saxon Mortgage Services Inc. and Ocwen Loan Servicing LLC, 2012 U.S. Dist. LEXIS 75276 (E.D. Pa. May 30, 2012). Court declined to dismiss breach of contract count in class action case seeking to enforce HAMP trial plan.
Healey v. Wells Fargo, 2012 WL 994564 (Pa.Com.Pl.), CCP Lackawanna, March 12, 2012. Court declined to dismiss (preliminary objections) breach of contract, UDAP, fraud in the execution and promissory estoppel counts in action seeking to enforce HAMP trial plan. Court sustained p.o.’s re fraud in the inducement, negligent misrepresentation, infliction of emotional distress. (Note: Wells provided borrowers a copy of the trial plan signed by a Wells employee.)
Jones v. Wells Fargo, 2012 Bankr LEXIS 1450 (E.D. La. 2012) (debtor awarded punitive damages of $3.1 against Wells Fargo for servicing abuses). Court declared that Wells Fargo exhibited “reprehensible” The court had previously found that the bank improperly applied payments to interest and fees instead of principal and improperly charged the debtor more than $24,000 in fees.
WMC Mortgage v. Baker, 2012 WL 628003 (E.D.Pa. Feb. 28, 2012) (TILA rescission upheld in case where securitization trust proceed
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