Friday, January 04, 2008

predatory mortgages

Parker v. Long Beach Mortgage Company - ED Pa. - January 3, 2008

Although the court rejected the consumer claims of the plaintiffs, "relatively sophisticated borrowers" one of whom had a real estate license, there is some potentially useful language in the opinion.

The court noted that the dispute involved a "broker and four lending institutions [and] embodies many of the factors identified with predatory, subprime mortgage loans:[ n.1] an aggressive mortgage broker, no document loans, interest climbing to double-digit rates, escalating payments, balloon payments, prepayment penalties, and negative amortization. As distasteful as the practices may be, [n. 2] that odor of opportunism is not enough to save [the plaintiffs] from themselves."

n.1 - HUD-Treasury Joint Report

n. 2 - The power to curb predatory practices lies either in consumer education or with Congress; as a court of limited jurisdiction, I may only enforce the laws as written, not as I would wish they were written.

evidence - immature witnesses

Commonwealth v. Davis - Superior Court - December 17, 2007

The determination of a witness's competency rests within the sound discretion of the trial court. The decision of the trial court will not be disturbed absent a clear abuse of that discretion. The "standard of review of rulings on the competency of witnesses is very limited indeed. "

In Pennsylvania, the general rule is that every witness is presumed to be competent to be a witness. However, young children must be examined for competency pursuant to the following test:

(1) The witness must be capable of expressing intelligent answers to questions;
(2) The witness must have been capable of observing the event to be testified about and have the ability to remember it; and,
(3) An awareness of the duty to tell the truth.

If there is an allegation of taint, the inquiry centers on the second element. The “appropriate venue” for investigation into such a claim is a competency hearing , centered on the inquiry into the minimal capacity of the witness to communicate, to observe an event and accurately recall that observation, and to understand the necessity to speak the truth.

Pennsylvania courts have recognized that an immature witness’s testimony can be tainted by the inquiries of adults. In that instance, the core belief underlying the theory of taint is that a child's memory is peculiarly susceptible to suggestibility so that when called to testify a child may have difficulty distinguishing fact from fantasy. Taint is the implantation of false memories or the distortion of real memories caused by interview techniques of law enforcement, social service personnel, and other interested adults, that are so unduly suggestive and coercive as to infect the memory of the child, rendering that child incompetent to testify.

The capacity of young children to testify has always been a concern, since immaturity can impact a child's ability to meet the minimal legal requirements of competency. Common experience informs us that children are, by their very essence, fanciful creatures who have difficulty distinguishing fantasy from reality; who when asked a question want to give the “right” answer, the answer that pleases the interrogator; who are subject to repeat ideas placed in their heads by others; and who have limited capacity for accurate memory.

In order to trigger an investigation of competency on the issue of taint, the moving party must show some evidence of taint. Once some evidence of taint is presented, the competency hearing must be expanded to explore this specific question. During the hearing the party alleging taint bears the burden of production of evidence of taint and the burden of persuasion to show taint by clear and convincing evidence. Pennsylvania has always maintained that since competency is the presumption, the moving party must carry the burden of overcoming that presumption .

state pre-emption of local law-making

Nutter v. Dougherty, et al. - Pennsylvania Supreme Court - December 28, 2007

State law pre-empts local lawmaking where

- a state statute specifically declares that it has "planted the flag of pre-emption in a field" (express pre-emption)
- a state statute "proclaimes a course of regulation and control which brooks no municipal intervention" (field pre-emption)
- local law contradicts or contravenes state law (conflict pre-emption)

evidence - value of property - proof - testimony v. document

Nelson v. State Board of Veterinary Medicine - Commonwealth Court - December 17, 2007

The testimony of the owner of an asset is competent to prove its value, so long as it is based on the owner's personal knowledge. Written documents are not preferable to oral statements. The best evidence rule does not apply where the matter to be proved exists independently of a writing that might also be probative.