02 Jul Georgia, North Carolina, Pennsylvania and Vermont Legislative Update and Pennsylvania Judicial Update
The Georgia legislature recently amended its laws governing disbursement of settlement proceeds. The North Carolina legislature recently amended uniform recording fees, which are effective until July 1, 2013. The Pennsylvania legislature recently enacted the Homeowner Assistance Settlement Act (the “HASA”). The Vermont legislature recently amended its law governing security breaches. The Monroe County, Pennsylvania court recently issued an order addressing the Residential Mortgage Foreclosure Program (the “Foreclosure Program”), and the Beaver County, Pennsylvania Court of Common Pleas recently issued an order establishing the Residential Mortgage Foreclosure Conciliation Program (the “Conciliation Program”).
Georgia Senate Bill 365 (effective July 1, 2012)
“Settlement agent” means the lender or active member of the State Bar of Georgia (previously person) responsible for conducting the settlement and disbursement of the settlement proceeds. The definition of a settlement agent previously included any individual, corporation, partnership, or other entity conducting the settlement and disbursement of the loan funds.
If any individual, corporation, partnership, or other entity conducts the settlement and disbursement of loan funds, when, he, she, or it is not the settlement agent, such entity will be guilty of a misdemeanor.
North Carolina Senate Bill 826 (effective June 26, 2012)
For any instrument that assigns more than one security instrument by reference to previously recorded instrument recording data that is required to be indexed, the fee will be an additional $10 (previously $25) for each additional reference.
Pennsylvania Senate Bill 1433 (effective June 22, 2012)
“Homeowner Assistance Settlement Agreement” (the “Agreement”) is the settlement agreement and related documents entered into on February 9, 2012, by the Pennsylvania Attorney General and the leading United States mortgage servicing companies.
“Homeowner’s Emergency Mortgage Assistance Program” (the “Program”) is the program administered by the Pennsylvania Housing Finance Agency (the “Agency”).
There is established a special fund known as the Homeowner Assistance Settlement Fund (the “Fund”). All payments received pursuant to the Agreement will be deposited by the Treasury Department into the Fund and are appropriated on a continuing basis. The moneys in the Fund will be allocated each fiscal year no later than July 1 until all settlement funds are expended, subject to the following limitations:
- 90% will be allocated to the Agency for the purpose of funding the Program.
- 5% will be allocated to the Office of the Attorney General for the purpose of funding housing consumer protection programs.
- 5% will be allocated to the Access to Justice Account for civil legal assistance related to housing issues.
The annual allocation of sums will not exceed $12 million annually, except that in fiscal year 2012-2013 the amount will not exceed $18 million. Additionally, the sum of $6 million is allocated from the Fund for fiscal year 2012-2013 to the Agency for the Program.
The provisions of the HASA will be severable. If any provision will be held to be invalid, illegal, or otherwise unenforceable, the validity, legality, and enforceability of the remaining provisions will not be affected or impaired.
The following provisions apply retroactively to June 5, 1999:
The following provisions will apply to the Program:
- If there has been a failure to comply with the notice requirements of the Housing Finance Agency Law (the “Law”), which in relevant part states that the recipient of the notice may receive financial assistance under the Program, and the 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 borrower’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 borrower who has been prejudiced thereby.
- The failure of a lender to comply with the notice requirements of the Law must be raised in a legal action before the earlier of delivery of a sheriff’s or marshal’s deed in the foreclosure action or delivery of a deed by the borrower.
- The failure of a lender to comply with the notice requirements of the Law will not deprive a court of jurisdiction over any legal action, including an action in foreclosure, for money due under the mortgage obligation or to take possession of the borrower’s security.
- The failure of a lender to comply with the notice requirements of the Law will not impair the conveyance or other transfer of land and the title of property subject to a mortgage covered under the Law.
Vermont House Bill 254 (effective May 8, 2012)
“Security breach” means unauthorized acquisition of electronic data or a reasonable belief of an unauthorized acquisition of electronic data that compromises the security, confidentiality, or integrity of a consumer’s personally identifiable information maintained by the data collector.
In determining whether personally identifiable information has been acquired or is reasonably believed to have been acquired by a person without valid authorization, a data collector may consider the following factors, among others:
- Indications that the information is in the physical possession and control of a person without valid authorization, such as a lost or stolen computer or other device containing information;
- Indications that the information has been downloaded or copied;
- Indications that the information was used by an unauthorized person, such as fraudulent accounts opened or instances of identity theft reported; or
- That the information has been made public.
Notice of a security breach must be made in the most expedient time possible and without unreasonable delay, but not later than 45 days after discovery or notification.
A data collector or other entity subject to the Security Breach Notice Act (the “Act”), other than a person or entity licensed or registered with the Department of Financial Regulation, must provide notice of a breach to the Attorney General’s office as follows:
The data collector must notify the Attorney General of the date of the security breach and the date of discovery by the breach and must provide a preliminary description of the breach within 14 business days, consistent with the legitimate needs of the law enforcement agency, of the data collector’s discovery of the security breach or when the data collector provides notice to consumers, whichever is sooner.
Notwithstanding the above, a data collector who, prior to the date of the breach, on a form and in a manner prescribed by the Attorney General’s office, has sworn in writing to the Attorney General that it maintains written policies and procedures to maintain the security of personally identifiable information and respond to a breach in a manner consistent with Vermont law must notify the Attorney General of the date of the security breach and must provide a description of the breach prior to providing notice of the breach to consumers.
If the date of the breach of the breach is unknown at the time notice is sent to the Attorney General, the data collector must send the Attorney General the date of the breach as soon as it is known.
Unless otherwise ordered by a Vermont court for good cause shown, a notice must not be disclosed to any person other than the authorized agent or representative of the Attorney General, a state’s attorney, or another law enforcement officer engaged in legitimate law enforcement activities without the consent of the data collector.
When the data collector provides the notice of breach, the data collector must notify the Attorney General of the number of Vermont consumers affected, if known to the data collector and must provide a copy of such notice. The data collector may send to the Attorney General a second copy of the consumer notice, from which is redacted the type of personally identifiable information that was subject to the breach, and which the Attorney General will use for any public disclosure of the breach.
In addition to the prior requirements, the notice to the consumer must now contain the approximate date of the security breach.
42 Pennsylvania Bulletin 2374 (dated May 5, 2012)
All complaints for mortgage foreclosure filed with the Monroe County Prothonotary (principal clerk of court) will be given a dedicated filing designation of RM for mortgage foreclosures on owner-occupied residential properties containing less than 5 residential units and CM for other mortgage foreclosures. Mortgage foreclosure complaints must have a specific cover sheet attached at the time of filing, certifying real estate location, occupancy status, and contact information, including the name, address, and telephone number of the representative of the lending institution.
An “Urgent Notice” and a “Certificate of Participation” must also be affixed to the complaint and the copy of the complaint to be served upon the borrower(s). The borrower(s) in cases involving owner-occupied residential properties with fewer than 5 units may then request to participate in the Foreclosure Program, by signing and filing the Certificate of Participation form. The principal clerk of court will not accept a residential mortgage complaint for filing without the cover sheet, Urgent Notice, and Certificate of Participation.
If the sheriff is unable to personally serve the borrower(s) with the Complaint, Urgent Notice, and Certificate of Participation, the sheriff will post the subject property with the Complaint, Urgent Notice, and Certificate of Participation. The sheriff’s return will reflect the date and manner of posting the property.
When the borrower files a written request for a conciliation conference under the Foreclosure Program, an order will be entered. The order will provide that further proceedings in the action other than service of process will be stayed pending the result of the conciliation conference.
The order will refer the matter to a conciliation conference before a conciliator appointed for that purpose by the court. The borrower will submit an application and a proposal to resolve the mortgage foreclosure action to the lender’s counsel and the Court Administrator at least 60 days before the scheduled conference. The lender’s counsel or other representative must have the authority at the conference to specifically address the proposal made by the borrower to settle the matter, and the conciliator will work with the parties to achieve a settlement. The conciliator will submit his or her recommendation for further action to the court following the conference, which may include lifting the stay if the parties are unable to come to an agreement, maintaining the stay while the parties engage in further negotiations or attempt a modification of the mortgage, a stipulation for judgment, a deed in lieu of foreclosure, a “cash for keys” arrangement, or other settlement options. The court will then act upon the conciliator’s recommendation.
The lender’s counsel must serve a copy of the Urgent Notice and the Certificate of Participation on the borrower(s) at the time of service of a motion for judgment on the pleadings or a motion for summary judgment if the borrower(s) was not served with them at the time of service of the original complaint. Service will not be required if the borrower(s) has already had the opportunity to participate in the Foreclosure Program.
The court in its discretion may also refer other pending mortgage foreclosure cases to the Program on motion of an interested party.
The cover sheet, Urgent Notice, Certificate of Participation, and order can be found as Exhibits “A,” “B,” “C,” and “D” at http://www.pabulletin.com/secure/data/vol42/42-18/802.html.
42 Pennsylvania Bulletin 3134 (dated June 2, 2012)
Mortgage foreclosure complaints presented for filing that seek foreclosure on a Beaver County owner-occupied residence must be accompanied with an additional Urgent Notice. The Urgent Notice must be affixed to the copy of the complaint served on the borrower(s).
If the borrower(s) call Housing Opportunities of Beaver County (“Housing Opportunities”), and if the borrower(s) attend a meeting with the Housing Opportunities Counselor (“Counselor”), and if the Counselor makes a determination that the borrower(s) is/are eligible to participate in the Conciliation Program, the Counselor will secure the signature(s) of the borrower(s) on a “Certificate of Participation” and file it with the Beaver County Prothonotary. This will be done within 30 days following the service of the complaint and Urgent Notice on the borrower(s).
Upon receipt of a completed Certificate of Participation from Housing Opportunities of Beaver County to the principal clerk of court, the case will proceed as follows:
The Court will issue a certain Order in each case where the Certificate of Participation has been timely filed by Housing Opportunities on behalf of the borrower(s).
Failure of the borrower(s) to fully participate in conciliation or failure of the parties to reach an alternate settlement arrangement will result in entry of an Order.
The Urgent Notice, Certificate of Participation, Limited Appearance, Withdrawal forms for Pro Bono Counsel/Reduced Fee Counsel, and Order can be found as Exhibits “A,” “B,” “C,” “D” and “E” at http://www.pabulletin.com/secure/data/vol42/42-22/1008.html.