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USPS MAILING RECEIPT IS NOT REQUIRED AND WITNESS TESTIMONY IS SUFFICIENT TO PROVE COMPLIANCE In Lakeview Loan Servicing, LLC v. Walcott-Barr, Case No. 4D19-1582, the trial court granted the borrowers motion for involuntary dismissal because Lakeview failed to introduce evidence of mailing of the HUD face-to-face letter from the United States Postal Service. On October 14, 2020, the Fourth DCA issued an opinion overturning the trial court’s dismissal and reversed the judgment. At trial, Lakeview’s witness stated that they visited the property once in an attempt to conduct a face-to-face interview, and the HUD face-to-face letter was: addressed to the Borrowers, sent to the property address, and sent by USPS certified mail. As additional confirmation that the letter was sent by certified mail, the witness identified the USPS certified mail tracking number. However, Lakeview did not introduce any mailing receipt or letter log into evidence. The borrowers argued they were entitled to an involuntary dismissal because there was not a face-to-face interview, and Lakeview had not shown it made reasonable efforts to schedule an interview by a certified letter because it did not produce a mailing return receipt. The trial court concluded that Lakeview needed to introduce evidence of a mailing return receipt from USPS and the case was dismissed. However, the Fourth DCA held that the plain language of the applicable HUD regulation (see 24 C.F.R. § 203.604(d)) does not require a certified mail receipt from the USPS to establish compliance. Rather, the servicer can introduce other evidence to confirm compliance with the regulation. But, most importantly, the regulation does not limit how a lender can prove such compliance. Accordingly, the Fourth DCA held that Lakeview established compliance through witness testimony. The witness identified the letter sent to the borrowers requesting a face-to-face meeting. The witness explained that the letter, admitted as an exhibit without objection, was sent to the borrowers at the property address and was sent via USPS certified mail. The witness also identified the USPS certified mail tracking number. Moreover, the letter was sent by a third party vendor, and the witness sufficiently detailed her training of the mailing policies and procedures of her employer and the vendor. Pursuant to the Fourth DCA, this testimony was sufficient to establish a “reasonable effort” under 24 C.F.R. § 203.604(d). Important to note: In this case, because the HUD regulations were incorporated into the mortgage, the Fourth DCA stated that Lakeview was required to substantially comply with the HUD regulation prior to accelerating the obligation or filing the foreclosure complaint. This issue was recently addressed in PennyMac Loan Services LLC v. Ustarez, No. 4D19-3547, 2020 WL 5541982 (Fla. 4th DCA 2020), which states that the HUD regulation is not a statutory pre-condition to foreclosure applicable to all mortgage foreclosure suits. Instead, PennyMac concluded that incorporation of the HUD regulation into a note or mortgage constituted a self-imposed contractual pre-condition to foreclosure. In other words, compliance with the regulation is only an issue if the note and mortgage contain language requiring compliance. In Lakeview, the loan documents did incorporate the HUD regulation, therefore, the servicer was required to introduce evidence that it complied with the regulations. [ OCTOBER 6, 2020 | ATLANTA, GA ] Padgett Law Group (PLG), is pleased to announce that Managing Attorney of Foreclosure, Marissa Yaker, Esq., has been recognized by Five Star Global as the 2020 Rising Business Leader award recipient as part of the annual Women in Housing Awards. Yaker was featured last month in the September issue of The M Report along with all 25 other finalists. Other award categories include the Cultural Leader Award, Community Leadership Award, Diversity & Inclusion, and the Laurie A. Maggiano Legacy Award. With open nominations, each category is narrowed to just five finalists each year in a peer review conducted by Five Star Global’s editorial group and then a final winner is revealed for each category. Yaker said, "This award is an affirmation that our industry recognizes, encourages, and supports women who have a drive, passion, and desire to question and improve this industry. We each have a voice, but collectively our voice is louder and stronger. I feel grateful to work in an industry that supports one another and helps strengthen professionals such as myself." Her full feature can be read online at TheMReport.com. The firm was previously recognized in the same category when Keena Newmark, Esq., the firm’s Managing Attorney of Bankruptcy was a top-five finalist, making the 2020 nomination the firm’s second consecutive year in the awards’ top five nominees. In 2019, Newmark was the only non-servicing professional recognized in the category. The same year, The M Report recognized PLG as a Top 25 Place to Work in the default services industry. Yaker joined PLG in 2017 and has practiced in the residential mortgage default space since 2013. She is licensed to practice in the state Florida. In her role as Managing Attorney of Foreclosure, Yaker oversees foreclosure processing and operations across seven physical locations within the firm’s footprint which includes Florida, Georgia, Tennessee, Arkansas, Texas, and Ohio. On April 30, 2020, the United States Bankruptcy Court for the Eastern District of Arkansas held that even though a foreclosure sale is not complete until the deed is recorded, a third-party purchaser is still entitled to relief from the automatic stay so that it may record the foreclosure deed, and thus complete the sale, even after the filing of the chapter 13 bankruptcy petition by the debtor. In re King, 614 B.R. 851 (2020). In Ark Real Estate Services, Inc. v. 21st Mortgage Corp., No. 4D20-122, a purchaser of real property at a foreclosure sale sued 21st Mortgage Corp., a mobile home lender that repossessed the mobile home from the land after the sale. The purchaser claimed that the foreclosure judgment extinguished the lender’s lien on the mobile home. On July 29, 2020, the Fourth DCA held that the mobile home lender’s lien survived the foreclosure sale and that the circuit court properly entered judgment against the purchaser on its claims of conversion and civil theft. On appeal, Ark argued that the mobile home became part of the land. It contends that the mobile home was permanently affixed to the real estate and was captured by the mortgage’s “after-acquired” property clause. Therefore, Ark argued that 21st Mortgage’s security interest in the mobile home was extinguished by the final judgment of foreclosure. The Fourth DCA rejected Ark’s argument for two reasons: 1) under Florida law, the issue of priority is established by statute, so the mobile home’s status as a fixture does not impact the validity of the security interest on the mobile home; and (2) the foreclosure action only extinguished competing interests in the land, not any interest in the mobile home. Accordingly, the first mortgagee’s foreclosure action did not impact 21st Mortgage’s security interest in the mobile home, and 21st Mortgage was well within their rights to repossess the mobile home from the subject property. The Supreme Court of Arkansas recently held that the sale notices used by some Arkansas law firms was too vague to satisfy the requirements of the Arkansas Statutory Foreclosure Act (the “Act”). Davis v. PennyMac Loan Services, LLC, 2020 Ark. 180 (May 7, 2020) In order to initiate a statutory foreclosure, the Act requires the recording of a Notice of Default and Intention to Sell (“Notice”) that states “the default for which the foreclosure is made.” Ark. Code Ann. § 18-50-104(b). The Notice at issue in Davis stated that “a default has been made with respect to a provision in the mortgage” (emphasis added). The Court found that such boilerplate language was not specific enough description of the default to satisfy the Act. As the attorneys for the borrowers in Davis argued, such vague language does not disclose whether the default that caused the foreclosure was a payment default or some other type of default provided for in the mortgage document such as destruction of the property, making false statements to the lender in order to obtain the loan, or permitting the presence of hazardous substances. We recommend that servicers check with their attorneys to be sure the language used in their form Notices will survive the scrutiny they will be subjected to in light of Davis. Moreover, servicers and attorneys alike should be cautious of using one-size-fits-all forms that do not take into account the specific type of default for which the foreclosure is made. Clients of Padgett Law Group should be aware of a recent update involving property registration within Pinellas County, Florida. The city of Clearwater (located in Pinellas) has partnered with PROCHAMPS, a Florida Corporation and Community Champions Company for the administration of the property registration program of Clearwater, FL. As Pinellas is a fairly high-volume county for foreclosures, we wanted to ensure all PLG clients are made aware of this update.
Effective immediately, properties should be registered via www.prochamps.com. The registration requirements include both occupied and vacant, except as noted below, properties with: FORECLOSURE:
If you have any questions or concerns with regards to information within this announcement, please contact PLG's Compliance Team for assistance. |
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The information contained on this blog shall not constitute legal advice or a legal opinion. The existence of or review and/or use of this blog or any information hereon does not and is not intended to create an attorney-client relationship. Further, no information on this blog should be construed as investment advice. Independent legal and financial advice should be sought before using any information obtained from this blog. It is important to note that the cases are subject to change with future court decisions or other changes in the law. For the most up-to-date information, please contact Padgett Law Group (“PLG”). PLG shall have no liability whatsoever to any user of this blog or any information contained hereon, for any claim(s) related in any way to the use of this blog. Users hereby release and hold harmless PLG of and from any and all liability for any claim(s), whether based in contract or in tort, including, but not limited to, claims for lost profits or consequential, exemplary, incidental, indirect, special, or punitive damages arising from or related to their use of the information contained on this blog or their inability to use this blog. This Blog is provided on an "as is" basis without warranties of any kind, either express or implied, including, but not limited to, warranties of title or implied warranties of merchantability or fitness for a particular purpose. |
Padgett Law Group and Padgett Law Group EP are D/B/As of Timothy D. Padgett, P.A. Timothy D. Padgett, P.A.'s practice areas include creditors' rights, estate planning and probate, real estate transactions and litigation. Not all practices or services are available in all states in which Timothy D. Padgett, P.A. practices.
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