Many states have enacted consumer collection practices laws that impose addition hurdles for lenders in their efforts to collect debts and foreclose mortgages. A Florida appellate court has just addressed what it considers may be a case of first impression in Florida: whether a collection practices statute can impose a condition precedent to provide written notice of the assignment of a mortgage loan to the borrower, and bar commencing foreclosure notwithstanding the lender’s compliance with its contractual obligations to assign the mortgage and provide notice of acceleration. Although Florida’s Second District Court of Appeal held in Brindise v. U.S. Bank National Association that the notice of assignment required by the Florida Consumer Collection Practices Act (“FCCPA”) is not a condition precedent to foreclosure, “because innumerable foreclosure cases are pending in the trial and district courts where defendants have raised section 559.715 as a bar to foreclosure,” it certified the question to the Florida Supreme Court as one of great public importance. Brindise v. U.S. Bank National Association, __ So. 3d __, 41 Fla. L. Weekly D223a (Fla. 2d DCA January 20, 2016).
In Commerce Bank/Harrisburg, N.A. v. Kessler, 2012 WL 1610139 (Pa. Super. 2012), the Superior Court of Pennsylvania recently ruled on two issues of first impression: whether the amended version of the Mechanics Lien Law (“MLL”), 49 P.S. 1101, et seq., applies to contracts entered into prior to its January 1, 2007 effective date, and when a mechanics lien will have priority over an open-end mortgage.
The first issue addressed by the Court in Kessler applies to a limited number of loans- those for which contracts were entered into and visible commencement of work occurred prior to the January 1, 2007 effective date of the amended MLL, but the lien obtained after January 1, 2007. On this issue, the Court held that the applicable law was the amended MLL, since it was the law in effect at the time the contractors’ lien was filed; the law in place when construction began and the contract was entered into was not applied.