Protecting Tenants at Foreclosure

SUMMER 2018 COMMITTED TO THE INDUSTRY, INTEGRITY, AND BEST PRACTICES

National States: New York The “Protecting Tenants at Establishing Foreclosure Act” of 2009 Has Compliance Been Restored With Pre- by Roy Diaz, SHD Legal Group Foreclosure On May 24, 2018, President Trump PTFA, “any immediate successor in interest” Statutory signed a bill into law called the “Economic to a foreclosed property “shall assume such Growth, Regulatory Relief, and Consumer interest subject to” a bona fide tenant. PTFA Requirements Protection Act” (hereinafter “Consumer § 702(a). This means that, before beginning By Margaret J. Cascino, Stern & Eisenberg, P.C. Protection Act”). Public Law No. 115- eviction proceedings, the bank must first determine whether there is a “bona fide lease” 174 Title III, Consumer Protection Act, § One of the most common challenges facing affecting the property. To be considered a 304. Among other things, the Consumer lenders in foreclosure actions across the country bona fide lease the tenant cannot be the Protection Act restored “the notification relates to providing sufficient evidentiary proofs mortgagor or a “child, spouse, or parent of the requirements and other protections related to establish a lender’s right to foreclose on a mortgagor.” PTFA § 702(b)(1). Additionally, to the eviction of renters in foreclosed particular mortgage loan. New York is no differ- properties,” as provided under Sections 701 the lease must be the result of an “arms- ent. In New York, long gone are the days where through 703 of the Protecting Tenants at length transaction” and require payment of standing was the main affirmative defense Foreclosure Act (PTFA or the Act). PTFA, rent “that is not substantially less than fair raised in answers filed by borrowers. Today, the market rent.” PTFA § 702(b)(2) and (3). § 304. The PTFA was initially enacted in focus is on a lender’s failure to establish com- If the tenant entered the bona fide 2009 but included a “Sunset Provision” that pliance with state-mandated pre-foreclosure lease before “the notice of foreclosure,” an provided an expiration date of December 31, demands. New York, like many other states, undefined term in the Act, then the tenant has its own statutorily mandated pre-foreclo- 2014. PTFA § 704. is entitled to “occupy the premises until the Under the restored provisions of the sure notice. The 90-day notice, set forth in “Tenants” continued on page 7 Real Property Actions and Proceedings Law (RPAPL) §1304, provides that a lender/servicer must send the statutory notice to a borrower at National least 90 days prior to the commencement of a foreclosure action. The state-mandated letters are set forth on the New York Department of Possible Relief: The Practice of Financial Services’ website in seven different languages. The 90-day notice must be sent to a Law Technical Clarification borrower at the property address to be foreclosed, as well as any mailing address on record Act of 2018 for the borrower. The mailing must occur via 1 By Michelle Garcia Gilbert, Gilbert Garcia Group, P.A. both regular and certified mail. Unlike other states, which allow a foreclos- Is this the FDCPA relief that default collect debts and that foreclose mortgages ing lender to remediate a defective statutory de- servicing law firms need? The Fair Debt and liens as violations of the FDCPA. The mand in a pending foreclosure action, New York Collection Practices Act (FDCPA), found Act requires a $1,000 per incident penalty, courts have concluded that a lender’s failure to at 15 U.S.C. § 1692 –1692p, was passed plus attorney’s fees under a strict liability establish strict compliance with RPAPL §1304 by Congress on September 20, 1977, (and standard, with a couple of exceptions. Over mandates the dismissal of the foreclosure as subsequently amended) as a consumer the years, the award of attorney’s fees led to action.2 With a dismissal at stake, it is critical protection amendment, establishing legal the filing of lawsuits against law firms alleging that the foreclosing lender submit the requisite protection from abusive debt collection a violation of the FDCPA. Law firms often proofs to establish compliance with the statute. practices, to the Consumer Credit Protection settle these cases as a cost of doing business Evidence of compliance includes an affidavit or Act, as Title VIII of that Act. rather than risk an adverse decision; though certificate of mailing executed at the time of the Subsequent state and federal cases alleged contact might be a letter or pleading mailing of the demand letters, imaged copies of brought under the Act interpreted actions by and hence a penalty of $1,000 per incident, the envelopes showing the USPS postmark (the law firms and attorneys pursuing lawsuits that the fees award could be several times the actual date of mailing of the demands), imaged “Relief” continued on page 7 “Compliance” continued on page 4 “What’s expected of us in this low-volume environment is very different than what was expected of us before the crisis. The amount of work involved in a file now is very different. There are probably 10 additional steps at each phase of the case that weren’t there before.” As for Sherman, he said he believed servicers and financial services firms need to keep their eyes Roy Diaz, Neil Sherman, on the future—and on the technology that will take us there. “If you’re not learning about the fintech Managing Managing Partner, side of our industry and contemplating how that Shareholder, Schneiderman & will adjust the way we do business, you’ll likely be SHD Legal Sherman left behind,” Sherman said. Sherman doesn’t believe the human element will be any less critical, however. “People and methodical thinking will be as important as ever, but we will have better tools,” Sherman said. “It’s important that both the default servicing side and the origination side of our industry understand how A CHANGING OF technology is going to impact what they’re doing and how we have to adjust as small businesses. If you are a large bank servicer or non-bank servicer, THE GUARD you’re putting incredible manpower and money behind fintech. If you’re a small business law firm, As leadership of the League passes to a new the ring. Neil moved things in a positive direction, you are working hard to stay current on what’s Chair in the form of Roy Diaz, he and departing and I felt like that needed to be carried forward. My happening in the fintech space.” Chair Neil Sherman discuss past accomplishments focus for my tenure as Chair of the Legal League Looking forward to initiatives he would like and future goals. The Legal League 100, a 100 will be on maintaining a clear vision of where to implement within the Legal League, Diaz professional association of financial services law the industry is, evolving industry requirements and highlighted something he’s already been doing on firms with member law firms spanning nearly all opportunity for improvement, and bringing that his own. Diaz regularly sends out a monthly email 50 states, recently gathered at the historic Joule vision to the membership.” blast from his firm, in which he spotlights a couple Hotel in Dallas, Texas, for their 11th Spring Servicer When asked if he had any advice for Diaz, of important cases or developments and provides Summit. A leading force for industry standards, Sherman laid out two suggestions. “Listen to our context and insights. “That’s an idea I think could market research, and policy change, the League is members—what their needs are and what their carry over to the League,” Diaz said, “examining how committed to supporting the mortgage servicing concerns are. Our goal is to provide feedback we are communicating outside of the summits. How industry through education, communication, and advice on behalf of our membership to both are we keeping that line of communication going?” relationship development, and advisory services. the Five Star Institute and the industry at large.” Sherman also emphasized the importance of In addition to a full day of education and Secondly, Sherman counseled Diaz to remain maintaining communication between League firms communication between attorneys, servicers, and steady and consistent. “These are such important and the rest of the industry. “We are constantly government representatives, the Summit also saw times,” Sherman said. “We need a level of talking about how we can improve efficiencies the announcement of the League’s most recent consistency so that we can continue to build upon between our firms, the servicers, and the investors leadership elections. The group announced that Roy what we’ve done over the last decade.” themselves,” Sherman said. “We’re creating an open Diaz, Managing Shareholder, SHD Legal Group P.A., “Roy is a fantastic candidate,” Sherman dialogue about what our industry looks like in 2018, had been elected Chair of the Legal League 100. continued. “He has a tremendous amount of which isn’t the same as 2009 or even 2015. We A member of the Florida Bar since 1988, experience, and he’s been a huge asset to the board. have to recognize that.” Diaz has concentrated his practice in the areas He’ll do a wonderful job.” “Change doesn’t come quickly, and trying of real estate, litigation, and bankruptcy. He has Looking ahead, Diaz highlighted the unique to rush change doesn’t work,” Diaz said. “As an represented lenders, servicers of both conventional position the industry finds itself in as he takes industry, we need to stay focused, stay patient, and and GSE loans, private investors, and real estate the reins of the League. “We’re dealing with stick to the plan. In my role as Legal League 100 developers throughout his career, with an emphasis challenges we haven’t experienced before,” Diaz Chair, I will keep a clear focus on industry needs— on the mortgage servicing industry for over 22 said. “We’re dealing with low portfolio volumes and anticipating them, bringing them to the forefront, years. an environment where there are no clear indicators and dealing with them.” Diaz, who previously served on the Legal of when or how that might change. I see a lot of As he looked back on his time as Chair of League 100’s Advisory Council, took over the question marks on the road ahead, which means we the Legal League, Neil Sherman told DS News position from departing Chair Neil Sherman, have to stay fluid as an industry and as a League. he believed the organization and its work was Managing Partner, Schneiderman & Sherman, who We can’t get too entrenched in a plan.” more important than ever. “Trying to solve our served as Legal League 100 Chair from May 2016. “It’s imperative that we don’t throw the baby industry’s issues alone from my office in Detroit, Sherman will continue serving as a member of the out with the bath water,” Sherman said. “There Michigan, is a much harder uphill climb than doing Advisory Council. have been many good regulations imposed within it as a collective in an association like the Legal In the midst of the Servicer Summit, both Diaz our industry. There may have been some over- Legal League, Neil Sherman said he believed the and Sherman took some time to sit down with DS regulation because of the crisis, but that appears organization and its work were more important than News and reflect on where the League has been, to be easing up. Our goal is to provide stability ever. “Trying to solve our industry’s issues alone where it’s going, and what it means to the both of for America’s housing market through progressive from my office in Detroit, Michigan, is a much them. collaboration.” harder uphill climb than doing it as a collective in “I’m motivated by the work Neil Sherman did,” Diaz believes compliance will be one of the an association like the Legal League. It’s up to our Diaz said. “That was the reason I threw my hat into significant challenges to tackle during his tenure. group to continue to evolve what we do.”

2 Legal League Quarterly service upon them, and what affidavits to States: Maryland file with the court in support. The Court of Appeals agreed that the circuit court should not have heard the case without all necessary Maryland Quiet Title Case parties. However, the court then asked whether the new rules would apply to this Underscores the Necessity of case. If the new rules applied, then rather than dismissing the case in circuit court, Following the Rules Zimmerman could amend the complaint to add Abner Devilbiss’ interest in compliance By Sara Tussey, Rosenberg & Associates with the new rules. The court instituted a new two-part test to determine whether One thing that is always true about When the case came to trial before the rules would apply retroactively, focusing litigation is that there are rules and Frederick County Circuit Court, the parties on the legislature’s intentions and the fact procedures which must be followed. State acknowledged that the record owner of the that the rules were procedural rather than legislatures are constantly promulgating new parcel, Abner Devilbiss, was not a party to the substantive. The court ultimately held laws and courts are constantly interpreting case. Maryland Real Property Rule 14-108 that the quiet title statute was retroactive new and existing laws, all of which can requires that record owners of property must and could be used in this case to join the change the way cases are litigated. In October be joined in any quiet title action. However, deceased record owner without having to 2016, Maryland adopted new procedures for Abner Devilbiss is deceased, as are a number open the estate. litigating quiet title actions. In a recent quiet of his heirs, and the parties had determined The lesson from this case is that title case, Estate of Zimmerman v. Blatter, that opening the required estates was cost following the rules matters. If Zimmerman 2018 Md. LEXIS 191, 2018 WL 1882953, prohibitive. The circuit court agreed to hear had properly joined the record owner from the Court of Appeals of Maryland determined the case but would only rule as to who among the beginning, the case likely would have that those rules and procedures apply the parties had the higher right of use; it ended much sooner with a judgment in retroactively. would not issue a ruling against the entire his favor by the circuit court. However, The lawsuit involved a disputed six- world. The circuit court ruled in favor of by deciding that it was too difficult and acre parcel located between two farms, the Zimmerman. expensive to join a necessary party, he Zimmerman Farm and the Laughlin Farm, in Blatter and Maharaj appealed to the opened up his case to multiple appeals Frederick County, Maryland. In June 2014, Court of Special Appeals, which determined and possible dismissal. The time and the Zimmerman Estate filed a quiet title that the circuit court had erred. The Court expense spent on the appeals are likely action asserting that it had a superior right to of Special Appeals held that Maryland Real more than what would have been spent to use the parcel based on adverse possession. Property Rule 14-108 required all parties with join the record owner from the beginning. Blatter and Maharaj, who were the owners of interest to be included in the suit and there In litigation, as with many things, taking the Laughlin Farm, disagreed. The Laughlin could be no exceptions to the rule. Since the the time to do something right from the Farm had originally been part of a large record owner was not joined as a necessary beginning will often save you time and acreage owned by Abner Devilbiss. In 1908, party, the Court of Special Appeals reversed money at the end. Devilbiss sold all but the six-acre parcel. the circuit court’s judgment and remanded There was no subsequent conveyance of the the case for dismissal. Zimmerman appealed. Sara Tussey is an Associate six-acre parcel. The parcel has no Maryland While the case was pending in the Court of with Maryland, Virginia, and Tax ID and is not recognized as part of any Special Appeals, Maryland had enacted its D.C.-based Rosenberg & property with a Maryland Tax ID. While both new quiet title legislation. Associates, LLC, a Maryland parties asserted rights to the parcel, they One of the new rules provided a LL100 member firm specializ- believed that Abner Devilbiss, or his estate, procedure for how to join parties who are ing in foreclosure, bankruptcy, title, litigation, was still the record owner of the disputed six believed to be deceased, including how to eviction, and REO default legal services for acres. name them in the complaint, how to effect lending institutions.

Legal League Quarterly 3 “Compliance” continued from page 1 the affiant is familiar with the lender/servicer’s mailing of the pre-foreclosure demands is not mailing practices and procedures relating to only retained but also fully incorporated into the copies of the green cards, and imaged copies of the demands, (2) establish proof of a standard lender’s business records. returned green cards either executed by the bor- office practice and procedure designed to ensure 1 RPAPL §1304. It is important to note that when rower or returned as undeliverable/unclaimed. that items are properly addressed and mailed RPAPL §1304 initially went into effect in 2008, the Establishing compliance with the statute by the lender/servicer, and (3) establish that the notice requirement only applied to those loans classified as becomes more difficult on inherited mortgage standard mailing practices and procedures were “high-cost,” “subprime,” or “non-traditional.” In 2009, the loans where a prior servicer sent the demands. legislature amended the statute to apply to all residential followed for the particular loan. Statements that home loans. The 90-day notice became a requirement for On inherited loans, it is common for a servicing are conclusory—e.g., “I reviewed the business any residential foreclosure action involving a home loan file to fail to contain an affidavit of mailing of the records and confirm that the demand notice was commenced after January 14, 2010. demand letters, copies of the green cards, and/ sent on XXX via regular and certified mail to the 2 Aurora Loan Servs., LLC v Weisblum, 85 A.D.3d 95, or other proof of mailing of the required demand borrower at the property address and mailing ad- 103 (2d Dept. 2011); Hudson City Sav. Bank v DePasquale, letters. dress, if applicable”—will be insufficient to meet 113 A.D.3d 595, 596 (2d Dept. 2014); Pritchard v Curtis, For these loans and any other loans missing the burden of establishing compliance with 101 A.D.3d 1502, 1504 (2d Dept. 2012); Citimortgage, an affidavit of mailing, the foreclosing lender the statute.3 Compliance with pre-foreclosure Inc. v. Espinal, 134 A.D.3d 876 (2d Dept. 2015). 3 M&T Bank v Joseph, 2017 NY Slip Op 05587 (2d will need to introduce evidence falling within statutes will continue to be an issue for lenders Dept. 2017); Central Mtge. Co. v Abraham, 150 AD3d 961 the business records exception to the hear- throughout the country. To avoid evidentiary (2d Dept. 2017); HSBC Bank USA v. Rice, 155 AD3d 443 say rule. To fall within the business records disputes and delays in the foreclosure process, (1st Dept. 2017); Investors Sav. Bank v Salas, 2017 NY Slip exception, an affidavit must (1) establish that care should be taken that the proper proof of the Op 05811 (2d Dept. 2017).

However, the amendment did not become effective until January 1, 2016. Under Illinois’s Statute on Statutes (5 ILCS 70/4), statutory amendments that are procedural may be applied retroactively. The Schoenberg court held that the amendment applied retroactively to all foreclosures filed before the effective date of the amendment because the amendment was procedural. Schoenberg confirmed that, whether or not there is a trust, the same principle applies: if a mortgagor conveys his or her interest to a trust before death, there is no need to appoint a special representative. In sum, Schoenberg holds that where a deceased mortgagor deeds States: Illinois his or her interest in property into a land trust before a foreclosure is filed, then the mortgagor is deemed a permissible but not a Illinois Appellate Court necessary party to the foreclosure, and need not be named as a defendant for purposes of Clarifies That Deceased the court having subject matter jurisdiction over the foreclosure proceedings. Kluever & Platt, LLC succeeded in Mortgagors Who Deed Their representing the foreclosure plaintiff in Schoenberg, including efforts to overturn the Interests in Property to a Trust lower court’s rulings in its favor, ultimately securing an important ruling from the Are Not Necessary Parties to appellate court that the amendment to §5/15- Foreclosures 1501(h) of the IMFL applies retroactively. Blake Strautins is a partner at By: Blake A. Strautins and Jason B. Erlich, Kluever & Platt, LLC Kluever & Platt, LLC a Legal League member firm. Named as Until the Illinois legislature amended a deceased mortgagor deeds his interest in a Rising Star in 2014, 2015, 735 ILCS §5/15-1501(h) of the Illinois a property to a trust, as in Schoenberg, the and 2016 by Illinois Super Mortgage Foreclosure Law in 2016, an open mortgagor no longer has any interest in the Lawyer Magazine, Strautins helps clients question remained in foreclosure lawsuits: property. The Schoenberg court reasoned successfully navigate the complex challenges that must a special representative be appointed that no special representative is needed to arise in contested foreclosure litigation, complex to represent the interests of a deceased protect non-existent property interests. Before appellate cases, and business litigation in federal mortgagor who no longer had any interest Schoenberg, no published Illinois appellate and state courts nationwide. in the property before January 1, 2016? The court opinion expressly addressed this issue. appellate court’s recent holding in Deutsche This gap impacted all foreclosures filed before Jason Erlich is also a partner Bank National Trust Company v. Estate of January 1, 2016. Before the amendment to Kluever & Platt, LLC and Vincent Schoenberg finally answered this §5/15-1501(h), Illinois law was unclear on focuses his practice in real question in the negative, holding that the whether a special representative needed to be estate, construction, and amendment to the IMFL retroactively appointed to represent the interests of deceased business counseling. Erlich applied. mortgagors who deeded his/her interests devotes a significant portion of his practice to the Typically, special representatives are in the property to a trust before their death. representation of developers of condominiums and appointed to protect the interests of estates of The Illinois legislature’s amendment, however, mixed-use developments. Erlich represents deceased mortgagors, including any potential expressly clarifies that no such appointment is lenders and servicers in connection with the sale heirs or other beneficiaries. However, where necessary under these circumstances. and liquidation of post-foreclosure assets.

4 Legal League Quarterly the month after the date of the judicial foreclosure sale.’ [Citation.] But on the face of the statute, section 9(g)(3) does not contain any time limit for confirming the extinguishment of an association’s lien.” See also 5510 Sheridan Road Condominium Ass’n v. U.S. Bank, 2017 IL App (1st) 160279, ¶ 20. In its decision in 1010 Lake Shore, the supreme court did state that “[t]he first sentence of section 9(g)(3) plainly requires a foreclosure sale purchaser to pay common expense assessments beginning in the month following the foreclosure sale.” 1010 Lake Shore, 2015 IL 118372, ¶ 24. However, we do not interpret that phrase to mean that the purchaser of a condominium unit at a foreclosure sale must commence remitting payments for post-purchase assessments in the month following the sale. Quadrangle House Condo. Ass’n v. United States Bank, N.A., 2018 IL App (1st) 171713, ¶ 11. Further in its opinion, the court explained that prompt payment was not a condition precedent to the extinguishment of an association lien created under 9(g) (1) of the Act holding “Section 9(g)(3) of the Act, the legislature did not place any temporal requirement on the payment of post-purchase assessments in order for the States: Illinois payment to confirm the extinguishment of any lien created under subsection 9(g)(1) of the Act; nor do we believe that the supreme Appellate Court Continues court in 1010 Lake Shore found promptness of payment to be an implicit requirement in the statute. To the extent that the decision in to Clarify Requirements of Bayview held to the contrary, we decline to follow it.” Quadrangle House Condo. Ass’n v. a Purchaser at a Foreclosure United States Bank, N.A., 2018 IL App (1st) 171713, ¶ 15. Sale in Extinguishing In affirming the Trial Court’s order, the Appellate Court found that U.S. Condominium Association Lien Bank’s payment of post-foreclosure sale assessments, 10 months after the sale By Marcos Posada, McCalla Raymer Leibert Pierce, LLC occurred, sufficiently extinguished the lien of the association. As condominium units are Illinois continues to present challenges to payment for post-purchase assessments frequently purchased at the foreclosure sale purchasers of condominiums at foreclosure on September 13, 2016, confirmed the by the foreclosing plaintiff, it is important sales. Many associations make it difficult to extinguishment of any lien in its favor by to act quickly in seeking a ledger from the pay the proportionate share of assessments reason of the prior unit owner’s failure appropriate association so that payment for following the foreclosure sale by refusing to to pay assessments accruing prior to the post-sale assessments can begin. Equally provide ledgers, providing ledgers untimely, Bank’s purchase of the Subject Unit at the important is that counsel be obtained in the or by adding on unwarranted fees and costs foreclosure sale.” Quadrangle House Condo. event an association seeks unwarranted fees to their ledgers. Because of the potential for Ass’n v. United States Bank, N.A., 2018 IL or assessments following the foreclosure litigation in this area, Illinois continues to App (1st) 171713, ¶ 9. sale because a successful challenge to an present updates to existing case law which The association argued that section 9(g) association could save tens of thousands of refine the process of lien extinguishment (3) of the Illinois Condominium Property Act dollars. post-foreclosure sale. Fortunately, the First (hereinafter “Act”) required a strict deadline District Appellate court of Illinois, in its for payment of assessments and US Bank was Marcos Posada is the Manag- April 20, 2018, opinion, provided purchasers required to make its payment for assessments ing Partner for the Illinois additional clarity on what can constitute the month following the judicial foreclosure Litigation Practice Group at extinguishment of an association’s lien. sale. Having issued payment approximately McCalla Raymer Leibert In Quadrangle House Condo. Ass’n v. 10 months after the sale, the association Pierce, LLC. In that capacity, United States Bank, N.A., 2018 IL App (1st) concluded that U.S. Bank failed to extinguish Posada actively handles the firm’s retention of 171713, the association appealed the trial its lien for pre-sale assessments. The court litigation matters and works tirelessly for the court order granting summary judgment in rejected the association’s argument and found: establishment of the firm serving as Litigation favor of U.S. Bank, N.A., the purchaser of the As this court noted in its decision in Counsel for outside matters. In addition to having condominium unit following the foreclosure Country Club Estates Condominium Ass’n daily oversight over the firm’s entire portfolio of sale that occurred on November 13, 2015. v. Bayview Loan Servicing LLC, 2017 IL litigated matters, Posada is directly involved in the The only issue on appeal presented by the App (1st) 162459, ¶ 14, “it is clear that firm’s Appellate cases, successfully obtaining association was whether, “pursuant to section a foreclosure buyer’s duty to pay monthly decisions favoring his clients in nearly every case. 9(g)(3) of the Act, the Bank’s $5411.31 assessments begins on ‘the first day of

Legal League Quarterly 5 6 Legal League Quarterly “tenants” continued from page 1 requirements of the PTFA supersede those mortgage industry is to delay and complicate of § 83.561, Fla. Stat. The one exception the eviction process after a bank successfully end the remaining term of the lease.” In the to this may be § 83.561(1)(b), Fla. Stat., forecloses its mortgage lien. Banks that case of an at-will lease or no lease at all, the which provides the tenant “is entitled to the purchase a property at a foreclosure sale tenant is entitled to a 90-day written notice protections of s. 83.67.” This section, entitled will need to factor in at least an additional to vacate. The Act does provide an exception “Prohibited practices,” enumerates several 90-120 days to complete an eviction, likely to these requirements in the event the restrictions placed on a landlord and is not more, until procedures can be streamlined to “immediate successor in interest” will occupy included in the PTFA. Presumably, since determine who constitutes a bona fide tenant the unit as a primary residence. However, it is an “additional protection” for a tenant, and the earliest a 90-day eviction notice can even in that case, the bona fide lease will not compliance with § 83.561(1)(b), Fla. Stat., be sent. be terminated until expiration of the 90-day will still be required even after the enactment notice to vacate. PTFA § 702(a)(2)(A). of the PTFA. Roy Diaz is the Managing The PTFA also provides that “nothing Although the PTFA provisions contained Shareholder of SHD Legal under this section shall affect the in §§ 701-703 were in effect from 2009 to Group P.A. in Fort Lauderdale, requirements … of any State or local law 2014, one can anticipate continued litigation Florida, and has been a member that provides longer time periods or other at the trial court level as to who qualifies as of the Florida Bar since 1988. additional protections for tenants.” PTFA an “immediate successor in interest,” what He has concentrated his practice in the areas of § 702(a)(2)(B). In Florida, the legislature constitutes “notice of foreclosure” and what real estate, litigation, and bankruptcy. He has enacted § 83.561, Fla. Stat., which provides constitutes a “bona fide lease.” There is very represented lenders, servicers of both conventional a shorter 30-day period for the notice of little precedential case law interpreting and and GSE loans, private investors, and real estate eviction and does not require the new owner applying these provisions, while there are developers throughout his career, with an emphasis to honor any bona fide lease in existence thousands of circuit court cases that have on the mortgage servicing industry for over 20 before the notice of foreclosure. Due to dealt with the PTFA. years. Diaz is the current Chair of the Legal these “lessor” protections, ostensibly, the The anticipated effect of the PTFA on the League 100 Advisory Council.

“Relief” continued from page 1 and for other purposes. to the full House recommending that the bill Specifically, if an attorney or firm works should be considered for passage. Please note amount of the penalty. on a legal action to collect a debt, in which that only one in four bills is reported out of Congressman Alex Mooney (R-Virginia) the legal action is served or attempted on committee. The odds of the bill becoming and Vicente Gonzalez (D-Texas) sponsored a debtor, including filing legal documents; law, according to Skopos Labs (https://www. House Bill 5082, titled “The Practice of communicating in a legal action event such as skoposlabs.com/about), are 33 percent. Let’s Law Technical Clarification Act of 2018,” on a mediation or deposition; or acting in other hope Skopos’ odds are wrong because the bill February 23, 2018, which bill was referred to legal matters connected to that legal action, dies if not passed during this Congressional the House Committee on Financial Services. the attorney or firm is excluded from the session, which ends January 3, 2019. The purpose of the succinct bill (https:// definition of a debt collector. www.govtrack.us/congress/bills/115/hr5082/ Put another way, the FDCPA would not Michelle Garcia Gilbert is text) is: apply to attorneys or law firms while engaged President and CEO of Gilbert … to exclude law firms and licensed in the practice of law in connection with the Garcia Group, P.A. She handles a attorneys who are engaged in activities collection of a debt. The bill goes farther wide variety of legal matters for the related to legal proceedings from the and uses this exclusion from the definition firm and has substantial litigation definition of a debt collector, to amend of a debt collector to amend the Consumer experience in both default and non-default cases, the Consumer Financial Protection Act of Financial Protection Act of 2010 and to including jury and non-jury trials, motion practice, 2010 to prevent the Bureau of Consumer limit the reach of the Bureau of Consumer and appellate oral argument, throughout the state of Financial Protection from exercising Financial Protection (BCFP) to supervise Florida. She practiced real estate and business law supervisory or enforcement authority with these same attorneys and law firms. since 1989, specializing in default servicing legal respect to attorneys when undertaking On March 21, 2018, the House Financial work, including litigated foreclosures, real estate certain actions related to legal proceedings, Services Committee voted to issue a report closings, evictions, and commercial litigation.

Legal League Quarterly 7 MOVERS & SHAKERS

THE the firm’s high-volume multi-state creditors RICHARD M. SQUIRE & MORTGAGE rights’ practice, including but not limited to, ASSOCIATES ANNOUNCES LAW FIRM foreclosure process and operations, bankruptcy EXPANSION process, and retail and REO closing WELCOMES Richard M. Squire & Associates, LLC, MANAGING transactions. announced its expansion into New Jersey. PARTNER, The firm, which brands itself as “smaller than EXPANDS MCCALLA some but second to none,” holds key business LOCATIONS RAYMER LEIBERT PIERCE values such as “integrity, client satisfaction, and The Mortgage Law Firm, PLC has announced ANNOUNCES results.” The statement expressed the company’s that Sally Garrison will be joining the firm as LEADERSHIP excitement to now have a multi-state footprint Managing Partner of the firm’s Oklahoma office. CHANGES with operations throughout Pennsylvania and Garrison will be establishing and growing the New Jersey. “We are thrilled to be able to firm’s presence in that market. McCalla Raymer provide client-focused representation in the State “Sally is an experienced litigator with an in- Leibert Pierce, LLC is of New Jersey to our present and prospective depth understanding of our industry,” said Jason pleased to announce clients,” the statement said. “Our services will Cotton, President and CEO. “In addition to her that Kerry McInerney be available statewide and will adhere to our wealth of experience, she is also exceptionally has joined the firm as existing Pennsylvania standards of excellence.” talented at building long-lasting relationships Managing Partner of The firm’s representation encompasses all with our clients and colleagues. This addition to the firm’s Alabama and areas of creditor’s rights, including residential our leadership team underlines the commitment Mississippi Litigation and commercial mortgage foreclosures, loss this firm has to providing outstanding quality and Trial Practice mitigation, bankruptcies, evictions, title curative, Group. The firm is and developing long-term relationships.” replevins/repossessions, settlement management, also pleased to announce that William Tate, REO closings, and debt collection. As a qualified previously a partner in the firm’s Commercial PADGETT LAW small business, the firm is authorized to work Litigation Group, has been named Managing GROUP HIRES on federal contracts, allowing clients to be Partner of the firm’s Georgia Litigation and EXECUTIVE compliant with the set-aside requirements for Trial Practice Group. McInerney and Tate DIRECTOR OF Freddie Mac, Fannie Mae, Ginnie Mae, FHA, will manage teams of experienced litigators OPERATIONS USDA, and VA. handling a variety of complex matters. Padgett Law Group They will also join the firm’s Management (PLG) is proud to BENDETT & MCHUGH Committee. announce and welcome ATTORNEYS NAMED RISING Managing Partner and CEO Marty Brandy M. Green to the firm. Green will Stone expressed great excitement about STARS take over the Executive Director of Operations these appointments: “Kerry and Will bring Bendett & McHugh, P.C. is pleased to role recently vacated by Robyn S. Padgett. a vast amount of experience, goodwill, and announce that firm partners Robert Wichowski Green will report directly to General Counsel/ enthusiasm to their groups. We are extremely and William Dziedzic have been selected to VP Laura Conrad, with a dotted line to Robyn pleased they are assuming these new leadership 2018 Connecticut Rising Stars list. Each year, Padgett. Effective immediately, Padgett will roles at the firm. The addition of Kerry no more than 2.5 percent of the lawyers in the assume the new role of Chief Development and Will to the Management Committee state are selected by the research team at Super Officer. In order to ensure a smooth transition, adds undeniable depth and bench strength, Green will be working closely with Padgett over Lawyers to receive this honor. showcasing the firm’s commitment to both the next few months. Super Lawyers, a Thomson Reuters business, growth and quality of litigation services in Green comes to PLG with more than 20 is a rating service of outstanding lawyers Alabama, Mississippi, and Georgia.” years’ experience as a veteran of the creditor from more than 70 practice areas who have Kerry McInerney brings a stellar reputation rights’ industry and brings to the firm her attained a high degree of peer recognition and and over 22 years of litigation experience invaluable knowledge and experience. professional achievement. The annual selections with him to the firm. Before joining McCalla, Green holds a degree from Darton College are made using a patented multiphase process McInerney was a shareholder with Sirote & and is an American Bar Association (ABA) that includes a statewide survey of lawyers, an Permutt, P.C., where he handled complex certified paralegal. In her new role, Green independent research evaluation of candidates, lender and servicer liability cases and served will be responsible for implementing and and peer reviews by practice area. The result as co-chair of that firm’s Mortgage Litigation executing the firm’s business plans according is a credible, comprehensive, and diverse list of Group. Will Tate began his legal career as to its business model and ensuring that all exceptional attorneys. an associate in the creditors’ rights group at appropriate actions are taken to expedite Morris, Manning & Martin LLP in Atlanta in the firm’s portfolio of business. Her primary 2009. Tate joined McCalla in 2013 as a senior focus will be based on client Service Level associate in the Commercial Litigation and Agreements and performance requirements, Transactions Group and was named a partner as well as oversight and management of in that group in 2016.

8 Legal League Quarterly IN PICTURES

peer rating for Ethical Standards and Legal 1. Ability. The group also announced several changes to the group’s Advisory Council. The Council gained two new members: Stephen M. Hladik, Principal, Hladik, Onorato & Federman, LLP, and Chad Neel, Chief Executive Business Officer, McCarthy & Holthus LLP. J. Anthony Van Ness, President, Van Ness Law Firm, PLC, was also re-elected to another term on the Advisory Council. "The health of any organization can be seen in the quality of leadership that volunteers to represent it," said Legal League 100 Executive Director Derek Templeton. "This year's slate of candidates represented the strongest field in the 11- year history of the Legal League. We are appreciative of every leader who took the time to run for a position and optimistic that the members elected will chart a course of continued growth and success for the organization." LEGAL LEAGUE 100 ATTORNEYS The Advisory Council membership also includes Caren Castle, Senior Attorney, CHART THE INDUSTRY’S The Wolf Firm; Michelle Gilbert, Managing Partner, Gilbert Garcia Group; Erin Laurito, Managing Partner, Laurito & Laurito; and COURSE FORWARD Richard M. Nielson, Managing Shareholder The 11th semi-annual Legal League where the industry is, evolving industry - Kentucky, Reimer Law. 100 Spring Servicer Summit took place at requirements, industry opportunity for The Legal League 100 Advisory the historic Joule Hotel in Dallas, Texas, on improvement, and bringing that vision to Council strategizes growth opportunities, May 1, 2018. The professional association the membership." facilitates education, and enhances strategic marked the occasion by announcing the Roy A. Diaz has been a member relationships in the industry on behalf results of its recent member elections. of the Florida Bar since 1988. He has of the Legal League. Advisory Council The League announced that Roy. A. Diaz, concentrated his practice in the areas of Members are responsible for aiding the Managing Shareholder, SHD Legal Group real estate, litigation, and bankruptcy. Chair, Vice Chair, Executive Director, and P.A., has been elected Chair of the LL100. He has represented lenders, servicers of Ex-Officio of the Legal League 100 in Diaz previously served on the Legal both conventional and GSE loans, private developing new strategies for progress in League 100’s Advisory Council. He will investors, and real estate developers the areas of legislative actions, education, take over from departing Chair Neil throughout his career with an emphasis on compliance, advocacy, and marketing. Sherman, Managing Partner, Schneiderman the mortgage servicing industry for over 22 & Sherman, who served as Legal League years. Diaz is admitted to Federal Court 1 Legal League Keynote speaker Yvette Gilmore, VP of 100 Chair from May 2016. Sherman practice in the United States District Court Servicing Performance Management, Freddie Mac will continue serving as a member of the for the Southern, Middle, and Northern 2 Five Star President and CEO Ed Delgado presents a Advisory Council. Districts of Florida. He is also admitted plaque to Neil Sherman of Schneiderman and Sherman as Diaz told DS News, "My focus for my in the United States Court of Appeals for he steps down as Legal League 100 Chairperson tenure as Chair of the Legal League 100 the Eleventh Circuit. He is AV Rated by 3 Default Litigation Update Panel at the Legal League will be on maintaining a clear vision of Martindale-Hubbell, which is the highest Summit

2. 3.

Legal League Quarterly 9 THE LEGAL LEAGUE 100 2018 ALL-STAR LINEUP Raising the Bar for Financial Services Law Firms Acting as the voice of advocacy for its member firms, the Legal League 100 is dedicated to strengthening the mortgage servicing community. 214.525.6757 - LegalLeague100.com

ALABAMA CONNECTICUT Rubin Lublin, LLC Shapiro & Brown, LLP NEW HAMPSHIRE NORTH CAROLINA Richard M. Squire UTAH ASSOCIATE MEMBERS 770.246.3301 301.731.8570 & Associates, LLC McCalla Raymer Liebert Bendett & McHugh, P.C. Marinosci Law Group, P.C. Brady & Kosofsky Scalley Reading Bates rubinlublin.com shapiroandbrown.com 215.886.8790 Pierce, LLC 860.677.2868 401.234.9200 704.849.8008 Hansen & Rasmussen, P.C. squirelaw.com 678.281.6500 bendett-mchugh.com Weissman PC MASSACHUSETTS mlg-defaultlaw.com bandklaw.com 801.531.7870 mrpllc.com 404.926.4500 Shapiro & DeNardo, L.L.C. scalleyreading.com a360inc McCalla Raymer Leibert Doonan, Graves, & Shapiro & Ingle, LLP weissman.law NEW JERSEY 610.278.6800 248.432.9360 Rubin Lublin, LLC Pierce, LLC Longoria, LLC 704.333.8107 VERMONT Fein, Such, Kahn & shapiroanddenardo.com a360inc.com 205.982.4810 678.281.6500 HAWAII 978.921.2670 shapiro-ingle.com Shepard, P.C. Schiller, Knapp, Lefkowitz rubinlublin.com mrpllc.com dgandl.com PUERTO RICO The Mortgage Law Firm 973.538.4700 OHIO & Hertzel, LLP 619.465.8200 Orlans PC 518.786.9069 ARIZONA DELAWARE feinsuch.com Carlisle Law GLS Legal Services, LLC mtglawfirm.com 781.790.7800 787.648.3465 schillerknapp.com Houser & Allison, APC Stern & Eisenberg, P.C. KML Law Group, P.C. 216.360.7200 orlansmoran.com glslegalservices.com Alacrity Services 480.428.8370 215.572.8111 ILLINOIS 215.825.6353 carlisle-law.com VIRGINIA 866.953.3220 houser-law.com sterneisenberg.com MICHIGAN Codilis & Associates, P.C. kmllawgroup.com Clunk, Hoose Co. LPA. Martínez & Torres Law Shapiro & Brown, LLP alacrityservices.com Offices, P.S.C. The Mortgage Law Firm DISTRICT OF COLUMBIA 630.794.5300 Fabrizio & Brook, P.C. Phelan, Hallinan, 330.436.0300 703.449.5800 619.465.8200 codilis.com 248.362.2600 cphlpa.com 787.767.8244 shapiroandbrown.com Cohn, Goldberg Diamond & Jones, P.C. mtglawfirm.com fabriziobrook.com martineztorreslaw.com & Deutsch, LLC Kluever & Platt, LLC 856.813.5500 Laurito & Laurito, LLC WASHINGTON Tiffany & Bosco, P.A. 410.296.2550 ext. 3030 312.236.0077 Potestivo & Associates, P.C. phelanhallinan.com 937.743.4878 SOUTH CAROLINA Houser & Allison, APC ProVest 602.255.6006 cgd-law.com klueverplatt.com 248.853.4400 lauritoandlaurito.com Robertson, Anschutz Bell Carrington & Price, LLC 206.596.7838 813.877.2844, ext. 1424 tblaw.com potestivolaw.com FLORIDA McCalla Raymer Liebert and Schneid, PL Reimer Law Co. 803.509.5078 houser-law.com provest.us Zieve, Brodnax and Pierce, LLC Schneiderman and 561.241.6901 440.600.5500 bellcarrington.com Gilbert Garcia Group, P.A. Wright Finlay & Zak, LLP ATA National Title Group 312.476.5156 Sherman, P.C. rasflaw.com reimerlaw.com Steele, LLP 813.638.8920 Finkel Law Firm, LLC 949.438.1265 248.341.4922 714.848.7920 mrpllc.com 866.867.7688 gilbertgrouplaw.com Stern & Eisenberg, P.C. Reisenfeld & Associates, 803.765.2935; wrightlegal.net atatitle-nls.com zbslaw.com sspclegal.com The Wirbicki Law 215.572.8111 LPA, LLC Kahane & Associates, P.A. 843.577.5460 WISCONSIN Baker Donelson Group, LLC Trott Law, P.C. sterneisenberg.com 513.322.7000 CALIFORNIA 954.382.3486 finkellaw.com 404.589.3408 312.360.9455 248.594.5400 reisenfeldlawfirm.com Johnson, Blumberg & Barrett Daffin Frappier kahaneandassociates.com Stern, Lavinthal & bakerdonelson.com wirbickilaw.com trottlaw.com Riley Pope & Laney, LLC Associates, LLC Treder & Weiss, LLP Frankenberg, LLC OKLAHOMA C2C Title Services McCalla Raymer Liebert 803.799.9993 312.541.9710 626.915.5714 INDIANA MINNESOTA 973.797.1100 844.532.3776 Pierce, LLC Baer & Timberlake, P.C. johnsonblumberg.com sternlav.com rplfirm.com c2cpropertyservices.com Prober & Raphael, ALC 678.281.6500 Codilis Law, LLC Randall S. Miller & 405.842.7722 O’Dess and Associates, S.C. 818.227.0100 mrpllc.com 219.736.5579 Associates NEW MEXICO Baer-timberlake.com TENNESSEE Claims Recovery 414.727.1591 pralc.com 248.636.2723 Mackie Wolf Zientz & Mann Financial Services Quintairos, Prieto, Nelson & Frankenberger, P.C. Rose L. Brand & Kivell, Rayment and millerlaw.biz 615.238.3625 Randall S. Miller & 585.589.0800 McCarthy Holthus, LLP Wood & Boyer, P.A 317.844.0106 Associates, P.C. Francis, P.C. mwzmlaw.com Associates crfservices.com 877 . 369 . 6122 904.271.4030 nf-law.com Shapiro & Zielke, LLP 505.833.3036 918.254.0626 248.636.2723 Eviction Support Services mccarthyholthus.com qpwblaw.com 952.831.4060 roselbrand.com kivell.com Cruikshank Ersin, LLC Shapiro, Van Ess, millerlaw.biz 844.358.4038 zielkeattorneys.com 770.884.8184 The Mortgage Law Firm SHD Legal Group P.A. Phillips & Barragate, LLP NEW YORK Lamun Mock evictionsupportservices.com cruikshankersin.com 619.465.8200 954.564.0071 513.396.8121 MISSISSIPPI Cunnyngham & Davis Davidson Fink LLP Firefly Legal logs.com mtglawfirm.com shdlegalgroup.com Dean Morris, LLC 585.546.6448 405.840.5900 Padgett Law Group 708.326.1410 lamunmock.com 850.422.2520 The Wolf Firm, Sirote and Permutt, P.C. KENTUCKY 318.330.9020 davidsonfink.com fireflylegal.com padgettlawgroup.com A Law Corporation 954.828.1138 Lerner, Sampson McCalla Raymer Leibert Frenkel Lambert Weiss OREGON Firm Solutions 949.720.9200 sirote.com TEXAS & Rothfuss Pierce, LLC Weisman & Gordon, LLP Houser & Allison, APC 813.466.1100 wolffirm.com Udren Law Offices, P.C. 513.412.6615 662.388.5463 631.969.3100 503.914.1382 Barrett Daffin Frappier firmsolutions.us Tiffany & Bosco, P.A. 856.669.5570 lsrlaw.com mrpllc.com flwlaw.com houser-law.com Turner & Engel, LLP Global Strategic Business 602.255.6006 udren.com 972.386.5040 Processing Solutions Reimer Law Co. MISSOURI Gross Polowy, LLC PENNSYLVANIA tblaw.com 212.260.8813 Van Ness Law Firm, PLC 502.371.0500 716.204.1700 Bonial & Associates P.C. Codilis, Moody & Hladik, Onorato & GlobalStrategic.com 954.571.2031 reimerlaw.com grosspolowy.com 972.643.6698 COLORADO Circelli, P.C. Federman, LLP National Creditors Bar vanlawfl.com 630.794.5200 Rosicki, Rosicki & bonialpc.com Barrett Frappier & LOUISIANA 215.855.9521 Association codilisstawiarskimoody.com Associates, P.C. Weisserman, LLP GEORGIA Dean Morris, LLC hoflawgroup.com Hughes, Watters & 202.861.0706 303.813.1177 516.741.2585 Askanase, LLP ALAW 318.388.1440 Millsap & Singer, LLC Martha E. Von creditorsbar.org rosicki.com 713.759.0818 Weinstein & Riley, P.S. 813.221.4743 636.537.0110 Rosenstiel, P.C. Nationwide Title Clearing MARYLAND Schiller, Knapp, Lefkowitz hwa.com 206.438.1076 alaw.net msfirm.com 610.328.2887 800.346.9152 w-legal.com McCabe, Weisberg & Conway & Hertzel, LLP mvrlaw.com McCarthy Holthus, LLP Barrett Daffin Frappier NEVADA info.nwtc.com/home 301.490.3361 518.786.9069 877 . 369 . 6122 Turner & Engel, LLP Powers Kirn & mwc-law.com Tiffany & Bosco, P.A. schillerknapp.com mccarthyholthus.com 972.341.5345 602.255.6006 Associates, LLC Rosenberg & Stein, Wiener & Roth, LLP 856.802.1000 McCalla Raymer Liebert tblaw.com Associates, LLC 516.742.6161 powerskirn.com Pierce, LLC 301.907.8000 678.281.6500 rosenberg-assoc.com mrpllc.com

10 Legal League Quarterly THE LEGAL LEAGUE 100 2018 ALL-STAR LINEUP Raising the Bar for Financial Services Law Firms Acting as the voice of advocacy for its member firms, the Legal League 100 is dedicated to strengthening the mortgage servicing community. 214.525.6757 - LegalLeague100.com

Legal League Quarterly 11 1349 EMPIRE CENTRAL DRIVE, SUITE 900 DALLAS, TEXAS 75247 214.525.6700

TheRules of Engagement

Hosted during the 15th Annual Five Star LEGAL LEAGUE 100 Conference and Expo FALL SERVICER SUMMIT

8:00 a.m. | September 17, 2018 | Hyatt Regency, Dallas