Mortgage Foreclosure: Vukman Update

Posted By Cliff Tuttle | May 7, 2015

No. 1,151

BENEFICIAL CONSUMER DISCOUNT COMPANY d/b/a BENEFICIAL MORTGAGE COMPANY OF PENNSYLVANIA v. PAMELA A. VUKMAN, NO. 355 WDA 2014

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Another chapter in the continuing saga of Pamela Vukman and Beneficial Consumer Discount Company appeared in the decisions of the Superior Court on April 6, 2015.

The prior Vukman decision in the Superior Court was announced in January 2012 at 2012 Pa. Super 18. The Court held that the Act 91 Notice originally given to Vukman was defective because it failed to give notice of the right to have a face-to-face meeting with the lender prior to foreclosure.

That decision was overturned by the Supreme Court.  Meanwhile, the Legislature addressed the problem of defective Act 91 notices by passing Act 70 of 2012.  Act 70 made it easy for plaintiffs to cure defective Act 91 Notices, providing, in essence, that a corrected notice could be given after commencement of the suit. The statute provided the trial court with a range of options:

“If there has been a failure to comply with the notice requirements of sections 402-C and 403-C of [Act 91], known as the Housing Finance Agency Law, and such failure has been properly raised in a legal action, including an action in foreclosure, for money due under the mortgage obligation or to take possession of the mortgagor’s security, the court may dismiss the action without prejudice, order the service of a corrected notice during the action, impose a stay on any action or impose other appropriate remedies in the action to address the interests, if any, of the mortgagor who has been prejudiced thereby.” 35 P.S. § 1681.5(1).

However, earlier in the proceedings, Ms. Vukman had entered into a consent judgment with Beneficial, setting forth a path whereby Ms. Vukman could gradually cure the delinquency and return the loan to good standing.

Unfortunately, Ms. Vukman defaulted on the agreement.  Pursuant to the agreement, the Plaintiff sold the property at sheriff sale.  Ms. Vukman filed a motion to set aside the sheriff sale, arguing that Beneficial had failed to afford her her rights under Act 70.

On appeal, the Superior Court stated the issues to be: (1) Did Vukman waive her Act 70 rights by the consent judgment? (2) Is waiver of Act 70 rights barred by statute or public policy?

The Court answered the first question as follows:

“We find that the consent judgment effectively provided Act 70 relief. At the time the consent judgment was entered, Vukman not only was aware that she had the right to a face-to-face meeting with Beneficial, she had actually had that meeting because it resulted in the consent judgment. Furthermore, as a result of the consent judgment, not only was foreclosure forestalled, it was prevented altogether so long as Vukman complied with the payment obligations provided in the consent judgment. Thus, although Act 70 had not been enacted at the time of the consent judgment, the consent judgment effectively provided the relief envisioned by Act 70.

Moreover, even if the consent judgment did not serve as Act 70 relief, Vukman is not entitled to such relief now. In her first issue, Vukman contends that in the consent judgment she waived only those claims set forth in her New Matter and Counterclaim, but not any of her defenses, such as Act 70. We disagree. The language of the consent decree clearly and unambiguously included a waiver of far more than just the claims Vukman set forth in her New Matter and Counterclaim: “Vukman agrees to Release and hold harmless any and all persons and business entities . . . from any and all claims set forth in Vukman’s New Matter and Counterclaim and from any and all claims she may have had or may have in the future.” If we interpreted this language as limiting the waiver to just the claims contained in the New Matter and Counterclaim, the highlighted language would be rendered mere surplus age.”

Even though Act 70 had not been enacted at the time consent judgment was entered, Ms. Vukman nevertheless waived its benefits.  In the consent judgment, she expressly waived any claims she may have in the future.

The court also stated:

“Neither Act 70 nor Act 91 has a no-waiver provision. Act 91 did incorporate the notice information required under Act 6. See 35 P.S. § 1680.403c(b)(1). However, Act 91 did not incorporate the no-waiver provision. Moreover, both Act 70 and the notice requirements of Act 91 were enacted after the no-waiver provision of Act 6 was enacted. Obviously, the Legislature was aware that it had barred waiver under Act 6 and could also have done so under Act 70 and Act 91, but chose not to do so. Therefore, we find no statutory bar to waiver of Act 70.”

CLT

Welcome

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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