Friday, August 16, 2013

foreclosure - defective Act 91 - timely assertion

Nationstart Mortgage v. Lark - Superior Court – August 14, 2013

On appeal, Lark raises a single issue for our consideration and determination, namely whether the trial court erred in denying her motion to set aside the sheriff’s sale because the Act 91 notice she received was defective. She contends that the Act 91 notice was defective because it omitted the name of the original lender (AAKO, Inc.) and listed GMAC as the “current lender/servicer” even though the mortgage was not assigned to GMAC until after the default judgment was entered.

We affirm the trial court’s order denying Lark’s Motion to Set Aside Sheriff’s Sale because Lark failed to raise the issue of the alleged defects in the Act 91 notice in a timely fashion. Section 1681.5(2) of the Homeowner Assistance Settlement Act, 35 P.S. §§ 1681.1-1681.7, enacted on June 22, 2012, provides as follows:

§ 1681.5. Effect of noncompliance with notice requirements in the Homeowner's Emergency Mortgage Assistance Program

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(2) The failure of a mortgagee to comply with the requirements of sections 402-C and 403-C of the Housing Finance Agency Law must be raised in a legal action before the earlier delivery of a sheriff’s or marshal’s deed in the foreclosure action or delivery of a deed by the mortgagor.  35 P.S. § 1681.5(2).

Section 1681.7 provides that the provisions of section 1681.5 are to be applied retroactively to June 5, 1999. 35 P.S. § 1681.7. Here, Lark filed her Motion to Set Aside Sheriff’s Sale on November 28, 2011, raising for the first time the issue of defects in her Act 91 notice. The sheriff’s sale took place on September 13, 2011, and the trial court determined that the sheriff’s deed was delivered on November 15, 2011.  Homeowner did not raise any objections until 13 days later.

Appellee NM LLC denies that the Act 91 notice delivered in this case was defective, but contends that even to the extent that it was defective, Lark failed to allege or prove that she suffered any prejudice as a result. In support of this argument, NM LLC cites to Wells Fargo Bank, N.A. v. Monroe, 966 A.2d 1140 (Pa. Super. 2009). Lark claims that no showing of prejudice is required when an Act 91 notice is defective, citing to this Court’s more recent decision in Beneficial Consumer Discount Co. v. Vukmam, 37 A.3d 596 (Pa. Super. 2012), appeal granted, __ Pa. __, 55 A.3d 100 (2012). As a result of our disposition, we need not address this issue.