Legal League has issued a brief on the recent decision in the state of Pennsylvania in the case of Foxfield at Naaman’s Creek v. Eventoff, R. At the heart of the case is the question if a homeowners association (HOA) foreclosure could divest a first mortgage from a property.
Legal League is a professional association of financial services law firms, uniquely positioned to drive progress in the mortgage servicing industry.
Legal League’s Advisory Council Chair and author of the brief is Stephen M. Hladik, a former Deputy Attorney General in charge of the Harrisburg office of the Pennsylvania Bureau of Consumer Protection. Hladik brings a broad range of experience to his mortgage foreclosure, bankruptcy, tax sale, and UDAP legal practice as Chair of the Legal League. A graduate of the Pennsylvania State University, Hladik obtained his law degree from Widener University, with honors, where he served as Internal Managing Editor of the Law Review. Hladik gained significant expertise in lending law enforcement while serving in the Pennsylvania Attorney General’s Bureau of Consumer Protection, managing Unfair, Deceptive, and Abusive Practices (UDAP), Fair Debt Collection Practices Act (FDCPA), Real Estate Settlement Procedures Act (RESPA), and Truth in Lending Act (TILA) cases.
MortgagePoint had a chance to catch up with Hladik to discuss the case and the ramifications of its outcome on the industry.
Q: What is the importance of a case like Foxfield at Naaman’s Creek v. Eventoff, R. to foreclosure attorneys?
Hladik: This case is significant for lenders, servicers, and foreclosure attorneys. This case has answered the question in Pennsylvania of whether an HOA foreclosure could divest a first mortgage from a property. In this precedential decision, the Superior Court of Pennsylvania ruled that an HOA cannot divest a first mortgage.
Q: Could you summarize some of the high-level takeaways from this case? What do you feel is the biggest impact of this decision on the judicial sector of the housing market?
Hladik: As noted, the major impact of this decision is the precedential finding that an HOA foreclosure cannot divest a first mortgage from a property. This is a big and important win for the mortgage industry.
Q: Were there particular trends, challenges, or legislative changes in foreclosure law that inspired your decision to provide a brief on the case?
Hladik: Because of the legal significance to the entire mortgage industry, the Legal League, and American Legal & Financial Network (ALFN) jointly participated in submitting an Amicus Brief to the Pennsylvania appellate court, underscoring the impact of what a contrary decision could mean to the mortgage industry. Many thanks are due to both the members of Legal League and the Amicus Committee of ALFN for putting in the time to craft this brief. Throughout the country, HOA’s have been attempting to establish priority of HOA liens over first mortgages, and this case was a solid victory preserving first mortgage liens.
Q: What do you hope the industry learns from the decision in this case?
Hladik: In addition to the legal victory, the mortgage industry can see the benefits of the mortgage industry trade organizations such as the Legal League and ALFN getting involved in important appellate cases to ensure the industry’s voice gets heard. If any clients become involved in cases on appeal which present important issues, please reach out to the Legal League so that we can assist in providing the court with a “friend of the court” perspective on the issue.
Q: Are there other Legal League publications or training you would recommend readers to review in addition to your brief on the case?
Hladik: The Legal League’s Quarterly Journal provides a breakdown of major legal decisions from jurisdictions around the country, and it is a great way for members and our partners in the mortgage servicing industry to stay abreast of cutting-edge issues percolating up through the courts.
Q: What are some of the benefits of Legal League membership and how does the association serve its membership?
Hladik: Members of the Legal League have numerous opportunities to assist the industry, through writing articles for the Quarterly Journal, participating in our successful Webinar Series, speaking at Legal League events, acting as instructors in our certification courses, and, of course, working on appellate Amicus Briefs on cases around the country.
The Legal League is committed to being the “go-to” source for all important legal issues affecting the mortgage industry, and we encourage all members to engage in the many opportunities.
