Tuesday, June 28, 2016

Pennsylvania Supremes: Lawyers Representing Foreclosing Banksters Can Be Held Liable To Borrowers For Excessive & Unearned Attorney Fees Charged

In Pittsburgh, Pennsylvania, The Legal Intelligencer reports:
  • A law firm representing a residential mortgage lender in connection with foreclosure proceedings can be liable to a borrower for excessive attorney fees charged in violation of the Pennsylvania Loan Interest and Protection Law, the Pennsylvania Supreme Court has ruled.

    In a 3-1 decision filed Monday (June 20) in the joint cases Glover v. Udren Law Offices and Johnson v. Phelan Hallinan & Schmieg, the court overturned a Superior Court ruling that held lawyers could not violate the law, referred to as Act 6, because the act specifically uses the term "residential mortgage lender."

    In the Supreme Court's majority decision, Chief Justice Thomas G. Saylor said Section 502 of the act provides a broad remedy against anyone who collects excessive fees.

    "In the statute at issue here, the legislature's use of the term 'person' in Section 502, which it defined to include actors other than residential mortgage lenders, suggests an intent to hold accountable any of the entities that might have engaged in the abusive practices specifically prohibited in Article IV," Saylor wrote. "The plain language of the statute does not exempt attorneys, debt collectors, or any other third parties from liability in this regard."
    Mary Glover filed a lawsuit against Udren Law Offices and EdElla and Eric Johnson sued Phelan Hallinan & Schmieg, both alleging violations of Act 6. They said the law firms charged unearned and excessive attorney fees in connection with the mortgage foreclosure proceedings in which the plaintiffs were involved.
    AARP, the National Consumer Law Center and Community Legal Services of Philadelphia filed as amici curiae in the case, and argued that under the Superior Court's interpretation, "the prohibitions of Act 6 are too easily evaded by residential mortgage lenders who can—and regularly do—hire attorneys and other third parties to conduct debt collection and foreclosures," Saylor said.
For the story, see Pa. Justices: Excessive Foreclosure Attorney Fees Actionable (may require paid subscription; if no subscription, GO HERE, then click the appropriate link for the story).

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