Apex Community Federal Credit Union v. Arasin
44 Pa. D. & C.5th 415
Pennsylvania Court of Common P...2015Background
- Apex Loan: defendants borrowed $77,000 from Apex and executed a mortgage on two parcels at 874-876 Cedarville Rd., Pottstown, to secure the loan.
- Defendants defaulted on the mortgage payments, leading Apex to file a mortgage foreclosure action.
- Act 6/91 notice was sent March 1, 2012; notice page 2 listed the wrong address, but page 4 correctly described cure steps.
- Plaintiff contends the loan involved only the 876 Cedarville Rd. parcel; defendants contend both parcels secure the mortgage.
- Court determines the transaction is a hybrid loan partly secured by a principal dwelling and partly by unimproved land, influencing statutory applicability.
- Judgment: in rem foreclosure limited to the 876 Cedarville Rd. parcel, with total awarded through foreclosure mechanics rather than damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Act 6/91 applies to the loan as a residential mortgage | Apex argues the loan is a residential mortgage thus subject to Act 6/91 | Arasin/Stetler contend the mortgage is not fully residential given the land portion | Hybrid loan; not a residential mortgage for Act 6/91 purposes |
| Whether Act 91 and related notices apply | Act 91 notice is adequate and does not affect foreclosure validity | Any misaddress on the notice could render it defective | Not defective; Act 91 not violated under the hybrid determination |
| Whether TILA/HOEPA applies and recoupment is available | If applicable, recoupment could reduce Apex’s judgment | Recoupment not available in mortgage foreclosure actions; damages do not apply | Even if applicable, recoupment not available; no reduction of judgment |
| Whether the mortgage is a residential mortgage securing a principal dwelling | Mortgage covers a principal dwelling and two parcels | 876 Cedarville Rd. is unimproved land, not a principal dwelling | Mortgage is a hybrid; 876 Cedarville Rd. not a principal dwelling for these statutes |
| Scope of foreclosure and which property is subject to the judgment | Foreclose on all secured property under the mortgage | Challenge to moving forward against only one property | Foreclosure limited to 876 Cedarville Rd. parcel; 874-876 Cedarville Rd. structure excluded from this action |
Key Cases Cited
- Wells Fargo Bank v. Spivak, 104 A.3d 720 (Pa. Super. 2014) (defines Act 6/91 notice framework for residential mortgages)
- Beneficial Consumer Disc. Co. v. Vukman, 77 A.3d 547 (Pa. (2013)) (discusses Act 91 purpose and notice timing)
- Bainer v. Citicorp Mortgage, Inc., 44 Conn.Supp. 148, 672 A.2d 541 (Conn. Super. 1994) (hybrid loan rescission treatment under TILA guidance)
- New York Guardian Mortgage v. Dietzel, 524 A.2d 951 (Pa. Super. 1987) (foreclosure in rem; recoupment not available in such actions)
- Green Tree Consumer Discount Co. v. Newton, 909 A.2d 811 (Pa. Super. 2006) (recoupment limitations in mortgage foreclosure)