August 29, 2014
by Louis P. Vitti
Vitti, Vitti & Associates, P.C. – USFN Member (Pennsylvania)
A recent Pennsylvania case, Glover v. Udren Law Offices, P.C., 92 A.3d 24 (Apr. 23, 2014), deals with alleged violations of the Loan Interest and Protection Act (Act 6), 41 P.S. §§ 101, et seq., as well as the Uniform Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. §§ 201-1, et seq. The court focused on the borrower’s claim that the statutes barred the collection of certain costs and fees by the defendant.
In an exhaustive examination of the relevant laws impacting this claim, the appellate court recapped the borrower’s argument thusly: “Because [41 P.S. § 502] provides a remedy against a person who collects excess fees and charges, and person is defined broadly to ‘include but not be limited to residential mortgage lenders,’ Glover [contends that he] can maintain a cause of action against the residential mortgage lender’s foreclosure attorney for collecting fees in excess of those described in [41 P.S. § 406]. Applying the principles of statutory interpretation, the court rejected Glover’s argument. “To do otherwise would require [the court] to rewrite § 406 and the conduct proscribed by it.”
The court concluded that, “As Udren is not a residential mortgage lender, it cannot violate § 406.” Further, the court affirmed the trial court’s dismissal of the UTPCPL claims, finding “that the UTPCPL does not apply to claims of attorney misconduct in the context of practicing law.” Since “all of Glover’s UTPCPL claims are based explicitly upon allegations regarding actions taken by Udren in connection with the filing of a foreclosure complaint,” they are not viable under the UTPCPL.
Of possibly greater import than the majority opinion described above is the lengthy dissent, which concurs (subject to a caveat) with the majority’s determination that no relief may be granted under the UTPCPL. The dissenting opinion, however, disagrees that the plaintiff failed to plead a claim upon which relief could be granted under Pennsylvania Act 6. The dissent suggests that “§ 406 prohibits the receipt of improper charges and interest, while § 502 prohibits the collection of such charges. This distinction further reinforces the inference that collection activity in violation of § 406, i.e., collection activity affiliated with [a residential mortgage lender’s] ultimate receipt of such charges, is prohibited, not just collection activity undertaken by the residential mortgage lender (RML), itself. What it is improper for an RML to receive, it is improper for an RML’s proxy to collect.”
Note that this is a Pennsylvania Superior Court case, and it may be considered by the Pennsylvania Supreme Court upon appeal. (Glover’s claims under Pennsylvania’s Fair Credit Extension Uniformity Act, 73 P.S. §§ 2270.1, et seq., and the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq., were dismissed by the federal district court prior to the commencement of the state action. See Glover v. Udren, 2011 WL 1496785 (W.D. Pa. 2011)).
Because of the extent of the thoughtful dissenting opinion, one may expect that a review of fees charged in accord with the instructions of Act 6 will be pursued and revisited by mortgagors in some future case.
© Copyright 2014 USFN. All rights reserved.