Real Estate: All is not quiet on the mortgage foreclosure front.

No. 720

The Washington Post reports that a recent settlement between Bank of America (pronounced Countrywide) and certain large investors precipitated a storm of delinquency notices. Although BOA has denied the connection, there is no doubt that litigation activity generally has been increasing, after a long lull during the summer.

Although the slowing of new cases due to the robosigning controversy is ending, the issue is far from a resolution. The case involving the former Goldbeck law firm in Philadelphia, Loughren v. Bair et al, alleging that paralegals were preparing and filing pleadings without lawyer supervision, is still alive. Judge Christine Ward denied Defendant’s preliminary objections and The Defendant has requested additional time to answer the lengthy complaint. This case should be going on for a long time.

Meanwhile, the issue of the robosigning of verifications was raised in another Allegheny County Common Pleas case, Wells Fargo v. Kosar, MG 10-000400. In response to a Motion and Rule to Show Cause, which was treated as Preliminary Objections, the Plaintiff’s counsel, Joseph Loughren (who is plaintiff in the Goldbeck case) argued that Wells Fargo’s foreclosure should be dismissed with prejudice (meaning forever) because Wells followed a standard business practice of flaunting Rule 1024, which requires a fact pleading to be verified by a party. It appears that all pleadings for Wells by the law firm involved here — Phelan Hallinan & Schmieg of Philadelphia — were initially signed by counsel and replaced by the verification of a robosigner. Although the alleged robosigner held the title of Vice President for Documentation at Wells Fargo, she knew nothing about the cases which she verified.

Judge Hertzberg denied the requested relief in an opinion that recognized that Wells Fargo had violated Rule 1024, but indicated that he was not shocked by the firm’s conduct.

CLT

Category: Mortgage Foreclosure, Real Estate
Tags: robosigning

Real Estate and Consumer Protection: Consumer Financial Protection Bureau Is Attempting To Simplify Loan Disclosures.

No. 719

The Consumer Financial Protection Bureau, which was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has been quietly experimenting with combining the two major home mortgage disclosure documents, the Truth in Lending Disclosure (TIL) and the Good Faith Estimate (GFE).

They developed a couple of versions of new disclosures, which look like this or this. After creating a form based upon feedback from consumers (both by email and at field project sites) they asked recipients to read two disclosures using that form and tell them which of two hypothetical loans was the better deal.

If you clicked on the disclosures above, you may have noticed that the familiar four boxes on the top of the Truth in Lending disclosure are not there. These disclosures have baffled consumers for a couple of generations. The APR typically scares them (but only for a minute or two) into thinking that the interest rate has been stealthily increased. Upon receiving an explanation, even if it hardly made sense, they returned to calm. The other numbers, the Finance Charge, the Amount Financed and the Total of Payments also caused temporary disquiet. But the borrowers, who typically went through this process once in a decade or two, didn’t have the experience to evaluate these numbers. All of them looked astronomically high. So in the end, the borrowers almost always took the deal, regardless of what the disclosures said. The experimental forms still contain comparison information, but it is downgraded in importance and explained better. As useful as the experimental form may be, however, it can’t force a consumer to read it, think about it or ask questions. Most of us just don’t read disclosures, no matter how well-designed. That’s just the way it is.

The truth was and is that government-mandated disclosures, no matter how graphically displayed, are not capable of educating the borrower sufficiently to walk away from a bad deal. But this failure was not with disclosure, it was with underwriting. For generations, home lending was governed by regulations written to insure that the borrowers would be able to afford the payments. The creativity of brokers, who were subject to much less regulation, bent and then broke a system that had worked fairly well.

Disclosures did not prevent borrowers from making bad decisions — and they probably never will — but they do protect the brokers. How, after all, can you complain after the fact about something that was fully disclosed? How indeed.

In the bad old days, loan originators frequently sold consumers loans with terms that that were far from the best available to them. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Consumer Financial Protection Bureau are attempting to end these practices. Considering history, it is clear that the subject cannot be simply left to government agencies, no matter how well-intentioned. This stuff is important and it is vital to everyone that we get it right this time.

We’ll examine those efforts and follow future developments in this blog.

CLT

Category: Consumer Protection, Real Estate

No, this is not the Animal Planet Blog.

No. 718

I can’t resist posting this photo, origin unknown, that appeared in a blog called Kellypuffs today. If you go there, you’ll be rewarded by a haiku written for the event.

Thanks once again to Meredyth for finding this item. On this first full day of Fall, it is not too soon to start thinking about Thanksgiving. I hasten to warn you that road kill will probably not make much of a feast. Drive carefully.

CLT

Category: Humor and Satire

Introducing Edie, Fairmont Hotel’s Canine Ambassador.

Photo by Kaitlin Bledsoe Photography

No. 717

Hurrah for the Fairmont Hotel in Downtown Pittsburgh and for Edie, its Ambassador!

She greets guests in the lobby and may be scheduled to go for walks. What a great idea! I haven’t visited Pittsburgh’s newest hotel, open since last March, but now I have a reason to go there.

Perhaps you will see Tom Cruise walking Edie, since he is rumored to be staying at the Fairmont in advance of shooting his latest movie.

Hat tip to Meredyth. Thanks to Kaitlin Bledsoe Photography for the great photo.

CLT

Category: Pittsburgh
Tags: Edie > Fairmont Hotel

Willpower!

No. 716

So — I read in the Freakonomics Blog last week that I could ask questions of the authors of a book called Willpower. This sounded like a great idea, but I hadn’t read the book. And so I clicked the link and bought the book, downloading instantly on my Kindle.

In my excitement, I stayed up late and read a full ten (10%) percent of the book. Man, was I motivated! In ten days, I’ll be able to finish the book and ask a wise and inciteful question. Then I’ll write about it on my blog. Good, good! I could feel the willpower surging within me.

That was last week. As of tonight, I have completed ten (10%) percent of the book. I guess I’d better go finish the book to find out how to get through the book. But, I am so tired. I think I’ll go lay down a little bit first.

CLT

Category: Humor and Satire, Personal Productivity
Tags: Freakonomics Blog > Kindle > Willpower

Warning: Use of Firearms May Hazardous to Your Health.

No. 715

A Florida statute prohibiting a physician from asking about gun ownership was struck down by a US District Court recently. No kidding. Here’s the report from Jurist.

Now, here’s a little mental exercise: Describe a plausible conversation between a doctor and patient in which the doctor inquires about gun ownership. We said plausible, mind you.

BONUS QUESTION: What Amendment to the United States Constitution is violated by this statute? No, Second Amendment is not the correct answer.

CLT

Category: Constitutional Law

Freakonomics Caption Contest Winner.

No. 714

So, what do you think Secretary of the Treasury Geithner is saying in this picture?

Freakonomics Blog announced the winner of their contest today.

“I checked the vault Mr. President, and we’re down to a stack of twenties about this high.”

Category: News Commentary
Tags: Geithner > Obama > Oval Office humor

Pennsylvania District Court holds individual mandate provision of Patient Provision and Affordable Care Act unconstitutional.

No. 713

The constitutionality of the individual mandate provision of the Patient Protection and Affordable Care Act under the Commerce Clause may come before the United States Supreme Court later this term. A District Court in Pennsylvania recently joined those holding the individual mandate unconstitutional, which means that the Third Circuit may get into the debate before the Supreme Court settles the split among the circuits.

A good short summary of the Pennsylvania case in context of the cases that have already been decided by other Circuit Courts of Appeals appears in the Pitt Law School website, Jurist.

Of course, there is a huge political component which will play out in the 2012 Presidential campaign, whether or not the Supreme Court decides the case in 2012.

CLT

Category: 2012, Constitutional Law
Tags: individual mandate > Jurist > Patient Protection and Affordable Care Act

Its All the Rage!

No. 712

There is a lot of talk going about (especially on a certain fair and balanced news channel) to the effect that what may be happening in the special election in the 9th Congressional District is a referendum on the Obama record. A novice Republican is currently leading a popular and experienced Democratic State Assemblyman from a prominent political family in the polls by about 6 points. I hear that the Republicans have not carried the district since 1923. But wait —

The Toxic ex-Congressman Weiner.

Why is there a special election going on?

Oh, yes. I remember now! Congressman Weiner resigned in disgrace. Not just ordinary disgrace, mind you. Its the kind of disgrace that brings a profound sense of shame upon the whole community. Its the kind of outrage that makes some of voters who elected him want to strangle him until they realize that strangling is too . . . humane.

So here comes a special election and he’s not on the ballot. Given these constraints, how can they hurl the bastard out into the street with a satisfying thud? How can they send a message to the pols who brought them this Weiner? No, nuclear weapons are not an option.

Vote for the Republican!

PS — don’t look for Rick Perry to carry the 9th in 2012. Anger has its limits.

CLT

Category: 2012
Tags: Congressman Weiner

So Many Heroes.

No. 711

Watching the ceremonies this weekend brought it all back clearly. In response to the unspeakable horrors of 9/11, there were so many acts of heroism that they can never be counted.

The 343 New York Firefighters who died on 9/11were only some of the heroes of that day.

The idea of standing in harm’s way to help others to safety, while the World Trade Center literally falls on you, is a chilling one. Yet hundreds saw it as their duty. And not all of them were uniformed police and fire fighters.

A week or two after 9/11/01 I read a short piece in the Investor’s Business Daily about a young lawyer (I’ve lost the article and thus his name) who was working as a doorman in the World Trade Center. He had come to New York from somewhere in central Africa and had received a law degree. He hadn’t landed a job as a lawyer yet, so he did the work he could get. People who had escaped from the inferno remember him helping and guiding others to the door, but staying behind to help still others. He could have run for his life, but he felt the call of duty — even as a doorman.

On top of all of the tragedies experienced by victims and their families, was the truth that so many people with the strength to do great service to our Country and the World perished that day with unfulfilled missions. And so, it is to us, the living, that the completion of their destiny must fall.

Ten years have passed, but it is never too late. Let’s roll.

CLT

Category: The continuing American Revolution

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CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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