Category: Firm Articles

Written By: Joseph J. Nardulli

Buying a condo, townhouse or single family home can present many challenges and rewards, but buying real estate in a development governed by a homeowners association (HOA) can be a serious trap for the unwary. Not only is the property subject to the laws, codes and ordinances affecting all other residential properties in the same geographical area; it is also governed by the covenants, conditions and restrictions of the development, and the bylaws, and rules and regulations of the association.

Written By: Joseph J. Nardulli

Q: What is Mediation?

A: In Mediation, a neutral third party acts as a mediator, whose role is to listen to both sides of a dispute and help the parties arrive at a mutually agreeable settlement. The mediator cannot force either side to a dispute to do anything. The parties themselves are in control of the terms of the settlement. In fact, the parties can end the Mediation without reaching a settlement.

Written By: Joseph J. Narulli

Timing Is Everything: Bringing a case to mediation at the wrong time: or Timing is Everything.

It is well known by most experienced litigators that there comes a crucial window of time when the attorney knows 85-95% of the information about the case, yet only 10-20% of the cost of going to trial has been expended. This is the optimal time to take the matter to mediation, particularly in cases where the cost of litigating the matter through trial is significant.

Written By: Joseph J. Nardulli

There are some who litigate regularly and if you do, most of what is to follow is familiar to you, but if you are in a company that seldom litigates or an individual who has never set foot in a courtroom then this article, hopefully, will take some of the mystery out of what happens during a civil lawsuit, and some of the terms that are bantered about between lawyers, which have little meaning to the non-lawyer.

Written By: Joseph J. Nardulli

The Superior Courts in the State of California are governed by the “Fast Track” system, more formally referred to as the Trial Court Delay Reduction Act (Government Code § 68600 et seq.). This portion of the Government Code governs the way in which Courts manage litigation. Prior to the adoption of this Act, the attorneys were primarily responsible for moving their cases forward. Under the Fast Track rules it is the Court, specifically the Judge’s responsibility, to assume and maintain control over the litigation, rather than the attorneys.

Written By: Eric D. Dean

Small business is the backbone of America. When the business is operated by a small group of individuals it can also be a significant source of disputes and litigation.  Whether the business is operated as a partnership, limited liability company or corporation, to often the participants in the venture are during the start up and building years view themselves as being in alignment and are focused on protecting themselves from third party claims and building their business. However, many events can arise resulting in a dispute between the co-venturers. Such disputes can have a wide range of causes such as a dispute between the co-venturers over the direction of the business, a fragmentation resulting from a diversity in work ethic, talent or style, the death or incapacity of one of the venturers resulting in family members or an administrator of an estate assuming a role in the business or one of the co-venturers desiring to retire or be bought out.

Written By:  Eric D. Dean

Secured lenders must assess a number of concerns before concluding a non-judicial foreclosure by a trustees sale. If the secured lender fails to do so, it may be waiving valuable rights or exposing itself to unnecessary risks. Some of these concerns are addressed below in no particular order. This article is not meant to constitute a comprehensive discussion of all possible concerns or of any of the concerns referenced  below but merely a checklist and brief description in order to heighten the lender awareness that further investigation and analysis may be warranted. The lender should consult counsel in the event any of the following concerns may exist.

Written By: Eric D. Dean

In many instances, there will be similarities in the nature of the defaults occurring on different loans. However, the adoption of a loan specific, objective-oriented approach to the resolution of loan defaults will in most instances substantially enhance the prospect of a significantly enhanced outcome of the resolution of the default.  Such an approach requires an objective analysis of the pertinent facts, documents and the nature and extent of the default and, based on this analysis, the adoption of stated objectives.

Written By: Eric D. Dean

With the current economic crisis has come an increasing number of failing businesses and businesses that even if surviving are not paying their creditors timely.  Where there is a defalcation on payment the unsecured creditor has two primary goals (1) put enough pressure on the obligor to make it resolve the outstanding debt quickly and (2) tie up the obligor’s assets before these assets are diluted, hidden or paid to other creditors.

Written By: Alan S. Wolf  Published in Autumn USFN Report 2007

The dictionary defines myth as “an unfounded or false notion or a thing having only an imaginary or unverifiable existence.” In the mortgage servicing world, and especially in regard to the servicing of loans involved in bankruptcy, there are a variety of myths that have developed in our industry. Instead of a proper analysis based on current law and fact, these myths are based on the premise that the practice must be correct “because it has always been done that way.” Here is a list of the top 10 bankruptcy myths, which is presented in true David Letterman format, from the lowest-rated to the highest-rated myth. Here they are:

Written By: Alan S. Wolf  Published in Summer USFN Report 2007

When a bankruptcy case is filed by a major lender, it obviously reflects poorly on our industry. The headlines about the demise of the subprime sector more than prove this point. Moreover, the filing creates tremendous havoc throughout the industry. For example, the lender’s employees become understandably frantic because their jobs are in serious jeopardy, prospective borrowers generally lose their pipeline loans and eagerly search for other financing options, investors and master servicers scramble to move the servicing to more secure financial partners, and attorneys and general creditors often freeze their services pending some guarantee of payment. It’s a mess.

Written By: Alan S. Wolf

On April 26, 2007, the Ninth Circuit Court of Appeals rendered a decision in In re Brown, __ F.3d __, 2007 WL 1217739 (9^th Cir. (Ariz.), 2007), diving into the analysis of what truly constitutes a bankruptcy court order. In Brown, the debtor brought an adversary proceeding against the loan servicer for its alleged violation of the automatic stay. Cross-motions for summary judgment were filed, and the bankruptcy judge ruled from the bench. Later that day, the judge signed a “minute entry” stating that the loan servicer’s motion was granted and the debtor’s motion was denied. The bankruptcy court further took under advisement a related motion for sanctions. Three months later, the bankruptcy court entered judgment on the sanctions motion, granting about $19,000 in sanctions against the debtor.

Written By: Alan S. Wolf

On March 26, 2007, U.S. Bankruptcy Judge Frank of the Eastern District of Pennsylvania decided that a Chapter 13 debtor could reopen her case more than three years after it had been closed and the mortgage loan paid off, so that debtor’s counsel could challenge the legal fees claimed by the mortgagee’s counsel. In re Padilla, __ B.R. __, 2007 WL 891290 (Bankr. E. D. Pa.).

Written By: Alan S. Wolf

On March 20, 2007, Judge Thomas Catliota of the U.S. Bankruptcy Court, District of Maryland (Greenbelt), issued a troubling ruling in In re King, Case No. 06-15660-TJC. In that case, the debtor, Marnitta King, was a joint owner of real property in Maryland. The other joint owner was Timothy Savoy. The property was secured by a mortgage held by Wells Fargo. Ms. King filed three Chapter 13 bankruptcy cases within one year. Mr. Savoy had not filed bankruptcy during this time. On the third filing, Wells Fargo went to sale without first seeking relief from stay due to section 362(c)(4)(A)(i), which provides as follows:

Written By: Alan S. Wolf

You’re special. Did you know that? From the inception of the Bankruptcy Reform Act in 1978, and in all the revisions that have followed since, mortgage lenders have had an honored and exulted place in the Bankruptcy Code. This is a result of Congress’s recognition that home mortgages in general, and the secondary market in particular, are highly important to our economy. Thus, while a debtor in bankruptcy can strip down virtually all secured debt, a debtor cannot strip down a mortgage loan if the property is the principal residence of the debtor when the bankruptcy case was filed. Similarly, while a debtor can redeem property by paying the fair market value of the property despite the secured debt being greater, a debtor cannot redeem his real estate without paying off all the secured debt. And in a Chapter 13 case, the debtor can only cure by paying the amounts due under the mortgage documents and non-bankruptcy law. Those are just some of the very special protections in bankruptcy afforded to mortgage lenders but not provided to other secured creditors (unsecured creditors are treated even worse). These are valuable rights, and they are about to be lost.

Written By: Alan S. Wolf

Mortgage servicers know that it’s probably a bad day when they arrive at their office to find reporters from 60 Minutes waiting in their lobby to speak to them regarding some mortgage servicing problem. 60 Minutes, a CBS syndicated news program, has a reputation for featuring liberal causes. Its 20-minute segments on various issues reach millions of households each week, and despite exposing problems in often a very one-sided manner, its segments almost invariably have a great influence on public opinion. That influence is further enhanced by the news media, which often pick up on the 60 Minutes segments and add their own investigations and twists. In short, a 60 Minutes segment has tremendous influence, even beyond the initial broadcast.

Written By: Alan S. Wolf

The Ninth Circuit Bankruptcy Appellate Panel (BAP) in the case of In re Williams, 323 BR 691 (9th Cir. B.A.P. 2005), held in dicta (the part of a judicial opinion that is informative or explanatory, not directly addressing the specifics of the case) that a creditor could still be liable for a willful violation of the automatic stay even if it is annulled. In Williams, the debtor filed the second of what would eventually be three serial Chapter 13 petitions. Subsequent to the second filing, a nonjudicial foreclosure was conducted on behalf of a homeowners’ association resulting (as it often does) in the sale of the property to a third party purchaser.