J-A17043-16


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

APEX COMMUNITY FEDERAL CREDIT                   IN THE SUPERIOR COURT OF
UNION                                                 PENNSYLVANIA

                        Appellee

                   v.

SANDRA ARASIN AND RANDY STETLER

                        Appellants                  No. 2074 EDA 2015


          Appeal from the Judgment Entered September 10, 2015
             In the Court of Common Pleas of Chester County
                    Civil Division at No(s): 2013-11073


BEFORE: GANTMAN, P.J., LAZARUS, J., and PLATT, J.*

MEMORANDUM BY GANTMAN, P.J.:                            FILED JULY 27, 2016

     Appellants, Sandra Arasin and Randy Stetler, appeal from the

judgment entered in the Chester County Court of Common Pleas, in favor of

Appellee, Apex Community Federal Credit Union (“Apex”), in this action to

foreclose on real property. We affirm.

     In its opinion, the trial court fully and correctly set forth the relevant

facts and procedural history of this case.    See Trial Court Decision, filed

February 23, 2015, at 1-3.         We supplement the procedural history as

follows. On February 23, 2015, the court entered an in rem judgment only

in favor of Apex totaling $98,360.29, together with other costs and charges

collectible under the mortgage, for foreclosure and sale of the mortgaged

premises, limited to the vacant lot next to Appellants’ residential property.
_____________________________

*Retired Senior Judge assigned to the Superior Court.
J-A17043-16


Notice of the court’s decision was sent to the parties on the same date.

Appellants filed post-verdict motions on March 6, 2015, which the court

denied by order dated June 8, 2015, and entered June 9, 2015. Appellants

filed a notice of appeal on July 9, 2015.        The court ordered Appellants on

July 13, 2015, to file a concise statement of errors complained of on appeal

pursuant to Pa.R.C.P. 1925(b), and they timely complied on August 3, 2015.

The court entered judgment on the verdict on September 10, 2015.1       2



____________________________________________


1
  Ordinarily, an appeal properly lies from the entry of judgment, not from
the order denying post-trial motions. See generally Johnston the Florist,
Inc. v. TEDCO Constr. Corp., 657 A.2d 511 (Pa.Super. 1995) (en banc).
Nevertheless, a final judgment entered during pendency of an appeal is
sufficient to perfect appellate jurisdiction. Drum v. Shaull Equipment and
Supply, Co., 787 A.2d 1050 (Pa.Super. 2001), appeal denied, 569 Pa. 693,
803 A.2d 735 (2002). Here, Appellants filed a notice of appeal prematurely
on July 9, 2015, prior to the entry of judgment. On September 10, 2015,
Appellants filed a praecipe to enter judgment. Thus, Appellants’ notice of
appeal relates forward to September 10, 2015, the date judgment was
entered. See Pa.R.A.P. 905(a)(5) (stating notice of appeal filed after court’s
determination but before entry of appealable order/judgment shall be
treated as filed after entry of appealable order/judgment and on date of
entry). Hence, no jurisdictional defects impede our review.
2
  On March 28, 2016, Apex filed a motion to quash Appellants’ appeal on the
ground that their post-verdict motions were filed one day late; therefore,
Appellants waived all issues on appeal. Nevertheless, “Recent case law
provides that an issue presented to a trial court in untimely post-verdict
motions is considered preserved as long as the trial court chooses to address
the claim presented in the untimely motion. … By considering untimely
post-verdict motions, the trial court is deciding whether to right a wrong.”
Dougherty v. Edward J. Meloney, Inc., 661 A.2d 375, 389 (Pa.Super.
1995), appeal denied, 544 Pa. 608, 674 A.2d 1072 (1996). See also
Millard v. Nagle, 587 A.2d 10 (Pa.Super. 1991), affirmed, 533 Pa. 410,
625 A.2d 641 (1993) (stating so long as court has jurisdiction, it can
exercise its equitable powers to address merits of untimely post-verdict
(Footnote Continued Next Page)


                                           -2-
J-A17043-16


      Appellants raise six issues for our review as follows:

          DID THE HONORABLE TRIAL COURT COMMIT AN[] ERROR
          OF LAW WHEN IT ENTERED THE ORDER OF FEBRUARY 23,
          2015[,] ENTERING JUDGMENT IN REM IN FAVOR OF
          APPELLEE[,] APEX FEDERAL CREDIT UNION?

             1.   THE TRIAL COURT COMMITTED ERROR OF LAW
             WHEN IT ENTERED THE ORDER OF FEBRUARY 23,
             2015[,] ENTERING JUDGMENT IN REM IN FAVOR OF
             APPELLEE[,] APEX FEDERAL CREDIT UNION AS IT
             FAILED TO PROPERLY APPLY THE TRUTH IN LENDING
             ACT AND THE HOME OWNERSHIP EQUITY PROTECTION
             ACT.

             2.   THE TRIAL COURT COMMITTED ERROR OF LAW
             WHEN IT ENTERED THE ORDER OF FEBRUARY 23,
             2015[,] ENTERING JUDGMENT IN REM IN FAVOR OF
             APPELLEE[,] APEX FEDERAL CREDIT UNION AS THE ACT

                       _______________________
(Footnote Continued)

motions; court’s decision to consider motions is not subject to appellate
review, unless opposing party has objected and demonstrated prejudice; “If
no objection is raised by the opposing party and the trial court rules on the
merits of the issues contained in untimely filed motions, the trial court’s
action will be considered an implicit grant of leave to the filing of the
motions. This decision [to address the untimely motions] should not be
subject to review by this [C]ourt, and we should go on to consider the issues
contained in these motions on their merits, as did the trial court”).

Instantly, the court entered its verdict on February 23, 2015. Appellants
filed their post-verdict motions on Friday, March 6, 2015. Apex, however,
did not object to the untimeliness of Appellants’ post-verdict motions; and
the trial court addressed the motions and denied them on the merits.
Absent objection from Apex in the trial court, we will not examine the court’s
decision to address the motions; and we will consider Appellants’ issues
preserved. See id. Moreover, we observe that when issues are actually
waived for appellate review, we affirm rather than quash the appeal. See
generally In re K.L.S., 594 Pa. 194, 197 n.3, 934 A.2d 1244, 1246 n.3
(2007) (stating where issues are waived on appeal, we should affirm rather
than quash appeal). Accordingly, we deny Apex’s open motion to quash the
appeal on the ground stated.



                                            -3-
J-A17043-16


            6/91 NOTICE FAILED TO PROPERLY COMPLY AND MEET
            WITH REQUIREMENTS OF ACT 6 AND ACT 91.

            3.   THE TRIAL COURT COMMITTED ERROR OF LAW
            WHEN IT ENTERED THE ORDER OF FEBRUARY 23,
            2015[,] ENTERING JUDGMENT IN REM IN FAVOR OF
            APPELLEE[,] APEX FEDERAL CREDIT UNION AND
            FAILED    TO   AWARD    RECOUPMENT     DAMAGES
            OFFSETTING THE JUDGMENT AMOUNT AS IT FAILED TO
            PROPERLY APPLY THE TRUTH IN LENDING ACT AND THE
            HOME OWNERSHIP EQUITY RELIEF ACTS AND HELD
            THAT DEFENSIVE RECOUPMENT WAS UNAVAILABLE
            DUE TO THE HOLDING IN NEW YORK GUARDIAN
            MORTGAGE V. DIETZEL, 524 A.2D 951 (PA.SUPER
            1987)[.]

            4.   THE TRIAL COURT COMMITTED ERROR OF LAW
            WHEN IT ENTERED THE ORDER OF FEBRUARY 23,
            2015[,] ENTERING JUDGMENT IN REM IN FAVOR OF
            APPELLEE[,] APEX FEDERAL CREDIT UNION WHEN IT
            ISSUED A CONTRADICTORY AND UNCLEAR DECISION
            REGARDING THE LEGAL ISSUES AND DEFENSES AS
            [THEY] RELATE[] TO BOTH THE PRINCIPAL RESIDENCE
            AND VACANT LAND LOCATED AT 874 AND 876 WEST
            CEDARVILLE ROAD, POTTSTOWN, PA.

            5.   THE TRIAL COURT COMMITTED ERROR OF LAW
            WHEN IT ENTERED THE ORDER OF FEBRUARY 23,
            2015[,] ENTERING JUDGMENT IN REM IN FAVOR OF
            APPELLEE[,] APEX FEDERAL CREDIT UNION WHEN IT
            CONCLUDED THAT SINCE THE FINAL FOCUS OF []
            [APEX’S] CLAIM[] WAS THE VACANT LAND THAT THE
            TRUTH IN LENDING ACT AND THE HOME OWNERSHIP
            EQUITY PROTECTION ACT DID NOT APPLY.

         6. DID THE HONORABLE TRIAL         COURT ABUSE ITS
         DISCRETION WHEN IT SUA            SPONTE PERMITTED
         APPELLEE[,] APEX FEDERAL CREDIT   UNION TO AMEND ITS
         REQUEST FOR RELIEF WITHOUT        FORMAL MOTION IN
         VIOLATION OF PENNSYLVANIA         RULE[S] OF CIVIL
         PROCEDURE [§] 1033?

(Appellant’s Brief at 4-6).


                                -4-
J-A17043-16


       After a thorough review of the record, the briefs of the parties, the

applicable law, and the well-reasoned opinions of the Honorable Mark L.

Tunnell, we conclude Appellants’ issues merit no relief. The trial court fully

and properly supported its decision. See Trial Court Opinion, filed February

23, 2015, at 8-11; Trial Court Order, filed June 9, 2015, at 1-2; Trial Court

Opinion, filed September 25, 2015, at 1-2) (finding: (1) Appellants created

“hybrid    mortgage”       when     they       secured   loan   with   their   principal

dwelling/residence and vacant lot next door; vacant lot is not principal

dwelling/residence and does not fall under guidelines of Truth in Lending Act

(“TILA”) or Home Owner Equity Protection Act (“HOEPA”); Apex provided

TILA disclosure when loan was executed; however, simple action of

providing TILA disclosure does not qualify loan as residential mortgage or

denote loan is covered by pre-foreclosure statutes at issue; ultimately, TILA

disclosures were not required for vacant lot; (2) vacant lot is not Appellants’

principal dwelling/residence, and Apex had no responsibility to send Act 6 or

Act 91 pre-foreclosure notices for vacant lot; assuming court found vacant

lot to be part of Appellants’ principal dwelling/residence, their argument is

still without merit; Apex sent Act 6/91 notice prior to commencing this

action in mortgage foreclosure as required;3 Apex’s Act 6/91 pre-foreclosure

____________________________________________


3
  A Rule 1925(b) statement that is not specific enough for the trial court to
identify and address an issue Appellants wish to raise on appeal may result
in waiver. Commonwealth v. Reeves, 907 A.2d 1 (Pa.Super. 2006),
(Footnote Continued Next Page)


                                           -5-
J-A17043-16


notice was legally sufficient, despite Apex labeling Appellants’ address

incorrectly on page 2 of notice; Apex provided Appellants’ correct address on

page 4 of notice, which mended error in question; minor typographical error

was not fatal to Apex’s Act 6 and Act 91 notice and did not render notice

“defective”; (3) presupposing Appellants’ argument that their “hybrid

mortgage” fell under HOEPA guidelines, they are still not entitled to

defensive recoupment; mortgage foreclosures are in rem actions and not

actions to collect money damages, which HOEPA’s lender liability guidelines

require for defensive recoupment; (4) Apex removed Appellants’ principal

dwelling/residence from requested relief and was no longer prosecuting that

part of claim; (5) Apex’s decision to limit requested relief to Appellants’

                       _______________________
(Footnote Continued)

appeal denied, 591 Pa. 712, 919 A.2d 956 (2007).                Further, “The
Pennsylvania Rules of Appellate Procedure require that each question an
appellant raises be supported by discussion and analysis of pertinent
authority, and failure to do so constitutes waiver of the claim.”
Commonwealth v. Buterbaugh, 91 A.3d 1247, 1287 (Pa.Super. 2014) (en
banc), appeal denied, 628 Pa. 627, 104 A.3d 1 (2014). See Pa.R.A.P.
2119(a)-(b). Instantly, in their brief, Appellants averred Apex was required
to file their complaint in mortgage foreclosure within one year of sending the
Act 6/91 notice. Appellants, however, did not specifically detail this issue in
either their post-trial motions or in their Rule 1925(b) statement. Moreover,
Appellants provided no statutory authority or case law to establish that Apex
had only one year, after sending the Act 6/91 notice, to commence their
action in mortgage foreclosure. Further, Appellants failed to disclose that
they filed for bankruptcy numerous times after notice and during the pre-
foreclosure process, which would automatically impair Apex’s ability to
commence any action in mortgage foreclosure.               Due to Appellants’
bankruptcy actions, Apex could not file its complaint in mortgage foreclosure
until the bankruptcy filings were resolved. Nevertheless, Appellants did not
properly preserve this issue, so it is waived on appeal.



                                            -6-
J-A17043-16


vacant property did not amount to amended complaint; significantly, if Apex

had moved for leave to amend its complaint, court would have granted

motion; Appellants failed to show how they were prejudiced by Apex’s

removal of principal dwelling/residence from requested relief in this

mortgage foreclosure action; (6) Apex had right to modify pleadings any

time before, during, or after trial and had authority to limit scope of

requested relief exclusively to Appellants’ vacant lot, even without leave of

court or agreement with Appellants).      We accept the court’s analysis and

affirm on the basis of the trial court’s opinions and order.

      Judgment affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 7/27/2016




                                      -7-
                                                                                           Circulated 07/15/2016 03:24 PM




                    APEX COMMUNITY FEDERAL CREDIT                         IN THE COURT OF COMMON PLEAS
                    UNION,                                                CHESTER COUNTY, PENNSYLVANIA
                                Plaintiff,
                                                                          NO. 2013-11073
                                   v.
                                                                          CIVILACTlON                                                      -· ··-···---
-----~·····---·   ·-----                 ..                                                      .                  ~
                                                                                                                    __.
                    SANDRA E. ARASIN and                                                        (.-) ...... ..      c...n
                    RANDY L. STETLER,                                                           ::f.' -....· (.,    ·-r,     r11t"'7~
                                                                                                r-(1 :-G . ' ·.     rr,           ~ ~-
                                  Defendants.                                                   (./l ::\:.: I       o»        .. ,,-,.,,
                                                                                                --,( -!'. -;.. ")    '""'     ;- -~~~·
                                                                                                 r-n--::::- r1·1             ';
                                                                                                 ·;:.:J\: -·         w        :, .,_,,
   SENT             Robert L. Stauffer, Esquire, Attorney for the Plaintiff               n r.::i ~--;~               -u      • ~ ,
                    Brian J. Smith and Joseph A. Diorio, Esquire, Attorneys for the Deferrja'fJ_s:;;                  ::::     {':~)
                                                                                                     -o:::i..,;;i       ~
  FEB 2 5 2015                                                                                       :i>-<
                                                                    DECISION

                            On July 22, 2008, defendants Sandra Arasin and Randy Stetler borrowed $77,000.00

                    from Apex Community Federal Credit Union ("Apex"). In order to secure the Loan, Arasin

                    executed a mortgage in favor of Apex on two properties located at 874-876 Cedarville Road,

                   .· Pottstown, PA. After defendants admittedly defaulted under the terms of the Loan, Apex filed

                    a complaint in mortgage foreclosure.       Defendants answered the complaint and asserted the

                    following defenses: (1) Apex cannot prevail on its claim because it provided defendant Arasin

                    with a defective Act 6/91 notice and (2) the defense of recoupment, i.e. any damages Apex is

                    entitled to recover must be reduced by the amount owed by Apex to defendants as a penalty for

                    its violation of the Truth in Lending Act ("TIIA") and the amendment thereto, the

                    Homeownership Equity Protection Act ("HOEPA").

                            The matter came to trial on January 23, 2015.

                            For the reasons discussed herein, the court finds in favor of Apex.


                                                             FINDINGS OF FACT

                            1.      Plaintiff, Apex Community Federal Credit Union ("Apex"), is a registered

                    federal credit union doing business at 540 Old Reading Pike, Stowe, PA 19464.


                                                                      1
                                                                                                                                                          .   :'\
          2.    Defendants,   Sandra Arasin and Randy Stetler, reside at 874 Cedarville Road,

Pottstown, PA 19454.



          3.    Arasin owns the real property located at 874 Cedarville Road, Pottstown, PA

19454. (Pl.'s. Ex. A.)



          4.    Arasin also owns the land located at 876 Cedarville Road, Pottstown, PA. (Id)


          5.    On July 22, 2008, defendants borrowed $77,000.00 from Apex (the "Loan").


          6.    In order to secure the Loan, Arasin executed a mortgage in favor of Apex on

the property located at 874-876 Cedarville Road, Pottstown, PA (the "Mortgage"). (Id)


          7.    The Mortgage was filed and recorded in the Office of the Recorder of Deeds,

Chester County, Book Number 7510 at page 91. (Id)


          8.    At the time of the Loan's inception, Apex provided Arasin and Stetler with

closing documents. The Loan documents included the Mortgage, a promissory note, a Form

HUD-1, a Note and Fixed Rate Disclosure Statement and a Notice of the Right to Cancel.


          9.    Apex did not tender or deliver to defendants any other disclosures regarding

the Loan.


          10.   Defendants concede they defaulted on the mortgage payments.         (Def.'s FOF

No. 5.)


          11.   Prior to instituting its foreclosure action, on March 1, 2012, Apex sent Arasin a

combined Act 6 and Act 91 Notice ("Act 6/91 Notice"). (Pl.'s. Ex. D.)



                                                2
                     12.     The Act 6/91 Notice on page 2 incorrectly identified the address of the

            property subject to the mortgage and foreclosure, but correctly identified such property on

            page 4 under the section "How to Cure Your Mortgage Default." (Id)

---,   ----------------    -------------   .                       --   ------------ ·····-·-·······-----------

                     13.    Following their default and in order to avoid foreclosure, defendants filed

            several bankruptcies. The bankruptcy cases were unsuccessful.


                     14.    A trial on this matter was held on January 23, 2015. All of the parties appeared

           and were represented by counsel.

                                                    DISCUSSION

                    Defendants concede that that they defaulted on their mortgage payments.                (Def. 's

           FOF No. 7 and COL No. 10.) Notwithstanding these admissions, defendants argue that

           Apex's claim fails as a matter of law because (1) the combined Act 6/91 Notice sent by

           Apex to defendant Arasin was defective and (2) defendants are entitled to statutory

           damages, pursuant to the TILA and HOEP A and asserted as a defense of recoupment, which

           would nullify any recovery.

                    Although both of these asserted defenses can implicate any number of legal issues

           and provisions of the TILA/HOEPA, whether or not these defenses prevent Apex from

           recovering in this case turns on an initial question: does this foreclosure action involve a

           mortgage subject to these statutes, i.e. is it a "residential mortgage" securing a principal

           dwelling? If it is, then ( a) the notice requirements of ACT 6 and 91 apply and an analysis of

           whether Apex's Act 6/91 Notice was defective becomes necessary, and (b) the duties,

           obligations and remedies provided for in the TILAIHOEPA may be implicated, requiring




                                                           3
 further analysis of these statutes by this court.      The court, therefore, begins with this

 threshold question.

        1.      Which mortgages are subiect to the notice requirements of ACT 6/91?

        .Act.fi.and _.Act 91 both-delineate the notice requirement-s-for-a-re-sidential-mortgagee-

 seeking to institute a foreclosure action against a mortgagor.    Wells Fargo Bank v. Spivak,

 104 A.3d 720 (Pa. Super. 2014).

        Pennsylvania's   Loan Interest and Protection Act, also known as "Act 6", is a

 "comprehensive interest and usury law with numerous functions" that offers protection for

 homeowners with residential mortgages from "overly zealous residential mortgage lenders."

Beckett v. Laux, 395 Pa. Super. 563, 577 A.2d 1341. 1343 (1990) (internal quotations

omitted); 41 Pa. Stat. Ann. § 101 (West 1999 & Supp. 2012), et seq. Act 6 requires that

certain notice be given "[b Jefore any residential mortgage lender may accelerate the

maturity of any residential mortgage obligation, commence any legal action including

· mortgage foreclosure to recover under such obligation, or take possession of any security of

the residential mortgage debtor for such residential mortgage obligation .... " 41 Pa. Stat.

Ann. § 101. The statute defines a "residential mortgage lender" as any person "who lends

money ... and obtains a residential mortgage to assure payment of the debt .... " (Id.) A

"residential mortgage" is defined as "an obligation to pay a sum of money in an original

bona fide principal amount of the base figure or less, evidenced by a security document and

secured by a lien upon real property located within this Commonwealth containing two or

fewer residential units or on which two or fewer residential units are to be constructed and

shall include such an obligation on a residential condominium unit." (Id).




                                                4
                             The Homeowners Emergency Mortgage Assistance Program, also known as "Act

                    91 ", requires a mortgagee who desires to foreclose to send notice to the mortgagor

                    "advis[ingJ the mortgagor of his delinquency ... and that such mortgagor has thirty (30) days

______   1 .1 _   ____,,,,to"--"h...,ay__e __aface-to-facemeeting with the mortgagee who_senLthe...notice...or-a..consumer-credit---

                    counseling agency to attempt to resolve the delinquency .... " Beneficial Consumer Disc. Co.

                    v. Vukman, 621 Pa. 192, 77 AJd 547, 550 (2013); 35 P.S. § l680.403c(a)-(b)(l),                      amended

                    by P.L. 841, No. 60, § 2 (July 8, 2008)). "[TJhe purpose of an Act 91 notice is to instruct the

                   mortgagor of different means he may use to resolve his arrearages in order to avoid

                   foreclosure on his property and also gives him a timetable in which such means must be

                   accomplished." Wells Fargo Bank, N.A. ex rel. Certificate Holders of Asset Backed Pass-

                   through Certificates Series 2004-MCWI v. Monroe, 966 A.2d 1140, 1142 (Pa. Super. 2009).

                   Act 91 provides in pertinent part:

                                     (a)      The Pennsylvania Housing Finance Agency,
                                     hereinafter referred to as the "agency," may make
                                     loans secured by liens on residential real property
                                     located in Pennsylvania ... The provisions of this
                                     article shall not be applicable if:

                                     ( 1) The property securing the mortgage is not the
                                     principal residence of the mortgagor.
                                     (2) The property securing the mortgage is not a one or
                                     two-family owner-occupied residence.

                            Unlike Act 6, the terms included above and applicable in this

                   case are undefined in the statute. See 35 P.S. §1680.103.

                            2.       Which mortgages are subject to the provisions of the TILA/HOEPA and
                                     permitthe defense of recoupment?

                            In 1968, Congress enacted the TILA, which governs the terms and conditions of

                   consumer credit and requires lenders to disclose certain loan information such as loan fees




                                                                          5
                and costs. 15 U.S.C. § 1601 et seq.; In re Crisomia, 2002 WL 31202722. at *3 (Bankr.

                E.D.Pa. Sept. 13. 2002). Congress enacted HOEPA in 1994 as an amendment to TILA.

                Pub.L. 103-325 (amending TILA at 15 U.S.C. §§ 1601-02, 1604, 1610, 1639-41, 1648);

·---   .1   _~s._.._ee.._alsnJnr.e_Jackson-=245_B.R. 23, 25 (Bankr. E.D.Ea.---2000-).-HOEE-A-requires-1€nder-s-te-

                provide borrowers with additional disclosures, in conspicuous type size, with respect to

                certain home mortgages. 15 U.S.C. § l 639(a)(l). Regulation Z was issued to implement

                TILA and HOEPA. 12 C.F .R. § 226.1 et seq.; Lopez v. Delta Funding Corp., 1998 WL

                1537755. at* 7 (E.D.N.Y. Dec. 23. 1998).

                       The HOEPA requires certain disclosures at the time of the loan origination for "high

                cost" mortgages that reach certain designated triggers or thresholds. 15 U.S.C. § 1602(aa);

                12 C.F.R. § 226.32(a). A "high cost" mortgage covered by HOEPA is a consumer credit

                transaction with a creditor:

                               3) that is secured by the consumer's principal dwelling
                               4) and is a second or subordinate residential mortgage,
                               not a residential mortgage transaction, a reverse
                               mortgage transaction, or a transaction under an open
                               credit plan

                       For such loans, a failure to satisfy the requirements of TILAIHOEPA can result in

               civil liability for the lender, which may be asserted as a matter of defense by recoupment.

               See 15 U.S.C.A. §1640.

                       The HOEPA, therefore, does not apply to credit transactions unless such transactions

               are secured by a property used or intended to be used as the mortgagor's principal dwelling.

                15 U.S.C. § 1603; see also Antanuos v. First Nat'l Bank, 508 F. Supp. 2d 466 (E.D. Va.

               2007) (holding "TILA applies only to credit transactions secured by real or personal

               property used or expected to be used as the principal dwelling of the debtor").




                                                               6
       3.            Is the subject mortgage a residential mortgage securing a principal
                     dwelling and thus covered by Acts 6 and 91 and TILA/HOEPA?

       In order to answer this question, the court must consider the transaction at issue and

the properties subject to the mortgage.
            -----·            -----········-----········

       On July 22, 2008, defendants borrowed $77,000.00from Apex. In order to secure the

Loan Arasin executed a mortgage in favor of Apex on the properties located at 874-876

Cedarville Road, Pottstown, PA. (Pl.'s Ex. A.)

                     The Mortgage reads as follows:

                     Borrower does hereby mortgage, grant and convey to
                     Lender the following described property located in
                     CHESTER County, Pennsylvania:

                     *See Copy of legal description attached hereto as
                     "Exhibit A" and made a part hereof.

                     Parcel#: 17-3-206 AND 17-3-205

                     which has the address of 874-876           WEST
                     CEDARVILLE ROAD POTTSTOWN

                     Pennsylvania 19645

(Id)

       Each parcel identified above has its own deed. The grantee named in each deed is

Arasin. Both deeds were executed on June 26, 2008. The deed for Parcel 17-3-205 (876

Cedarville Rd.) was recorded in the Office of Recorder of Deeds of Chester County at

Mortgage Book 6887, page 2125. The deed for Parcel 17-3-206 (874 Cedarville rd.) was

recorded in the Office of Recorder of Deeds of Chester County at Mortgage Book 6887, page

2129. The Mortgage was filed and recorded in the Office of the Recorder of Deeds, Chester

County, Book 7510, page 91. (Id)




                                                           7
        Arasin and Stetler reside at 874 Cedarville Road,Pottstown, PA 19454. (Def.'s FOF, at

,r2.)

        During closing argument at trial, defendants argued as defenses Apex's alleged

violations of the notice proviaions required under AcL6L2J_and_the_TILALHOEP.A._ALthe_

close of trial, the court requested that the parties brief the issue of the applicability of the

TILA/HOEPA to this transaction and also to submit proposed findings of fact and

conclusions of law for the case. The parties did so.

        Plaintiff contends in its post-trial brief that the statutory defenses raised by Arasin

pursuant to the TILA/HOEPA do not apply here because this foreclosure action does not

involve a loan secured by a consumer's principal dwelling. (Pl.'s COL, at ,l32; Pl.'s Brief,

at pp. 1-2). It also argued that its Act 6/91 Notice, as provided, was sufficient. According to

Apex, the subject of this mortgage foreclosure action is only Parcel No. 17-3-205 (876

Cedarville Rd.), unimproved land consisting of 5.480 acres. (Pl.'s FOF, at ,l6.) Although

defendants challenge this argument and contend that it was not pled in the complaint, Apex

did identify Arasin as the record owner of the real property and the land in separate

paragraphs of its complaint. It averred that each was secured by the mortgage at issue.

(Pl.'s Complaint at ,r,r 5,6). If Apex now chooses to proceed against only one property, to

the exclusion of the other, and in essence not prosecute a part of its claim, it may do so.1

        Considering all of the facts in this case, the court concludes that this loan transaction

is a hybrid -partly secured by a principal dwelling and partly secured by unimproved land.

The court was unable to locate any binding precedent which addressed a similar transaction.

1To
     the extent defendants' argument suggests that they have been prejudiced by Apex's
decision to move forward only against the land, the court concludes otherwise. First, Apex's
position removes defendants' home from this foreclosure action. Second, defendants filed a
reply brief challenging Apex's arguments and that brief was considered by the court.

                                                8
                         The court, however, found persuasive the reasoning of the Superior Court of Connecticut,

                         which tackled a similar issue under the TILA, in the case of Bainer v. Citicorp Mortgage,

                         Inc., 44 Conn.Supp. 148, 672 A.2d 541 (1994).

_____________________________   isx.Batner, .the Connecticut court was asked to__consider_whe_ther_a_lnan_transac.tion_

                         that consisted partly of financing to acquire or construct a residence and partly of financing

                         for other purposes would be exempt from the right of rescission provided for under the

                         TILA - an exemption reserved for residential mortgage transactions. The court reasoned as

                         follows:

                                           Where a loan transaction is a hybrid, consisting partly of
                                           financing to acquire or to construct a residence and partly of
                                           financing for other purposes, the official staff interpretation of
                                           the Federal Reserve Board, ConsumerCredit Guide 13416.03,
                                           comment 23(f)-3 (CCH 1994), indicates that the entire loan is
                                           exempt from the right to rescind as long as the two purposes
                                           are part of one transaction. If they are divided into separate
                                           transactions, such as a loan for acquisition and a subsequent
                                           loan for improvements, then only the loan for acquisition of
                                           the existing residence is exempt, and the right to rescind
                                           applies to the advances for improvement. Id.


                         Bainer, 44 Conn. Supp. at 154, 672 A.2d at 544.

                                    Similarly in this case, there is a single loan transaction secured partly by a principal

                         dwelling/residence and partly by land. The mortgaged property/land at 876 Cedarville Rd. is

                         not a principal dwelling and defendants do not reside at that property. (Def.'s FOF, at 12,)

                         Although argued by defendants, the fact that Apex provided a TILA document to them does

                         not control whether or not this hybrid mortgage is covered by the statutes at issue.2 That

                         conclusion of law is one left for the court, not the parties.



                         2It
                           should also be noted that although a TILA disclosure may have been required for the 874
                         Cedarville Rd. property, the same would not apply to the mortgage securing the land.


                                                                            9
                        The court concludes that the Mortgage securing 876 Cedarville Rd. is deemed to be

              other than a "residential mortgage" and is not a mortgage securing a principal dwelling as

              contemplated by the applicable statutory provisions.       As such, the Mortgage does not fall

____   _   ~.within_the_parameters_of_Acts      6 and .91 _ or the liability_pr.mdsions._o.LTILALHOEP...A.._See__

              also, ROLAND E. BRANDEL, ET AL., TRUTH IN LENDING, A COMPREHENSIVE

              GUIDE§ 4.03[24] (2d Ed. 1994) ("The definition of dwelling under [TILA] includes all real

              and personal property that is used as a residential structure and that contains one to four

              units.") (emphasis added).

                        4.     Even if the provisions of Act 6 and 91 applied, Apex's notice was not
                               defective.

                        If the court had found that this action involved a residential mortgage, the Act 6/91

              Notice sent to Arasin by Apex was not defective. Although it mistakenly listed Apex's

              address on page 2 (Pl.'s Ex. D), the information allegedly omitted (the property address) was

              included in a later section of the Act 6/91 Notice at page 4. This section specifically

              discussed the steps defendants could take in order to avoid default. The typographical error

               identified did not result in a "defective" notice which precludes Apex from recovering on its

               claim.

                        5.     Even if HO EPA applied, defendants arenot entitled to assert the defense
                               of recoupment.

                        Similarly, if the court had found that TILNHOEPA applied in this case and the

               required disclosures were not made, defendants still would not be entitled to damages as a

               claim for recoupment.




                                                              10
                        Recoupment is only available under TILA as a "defense" in "an action to collect a

                debt", 15 U.S.C. § 1640(e). In New York Guardian Mortgage v. Dietzel, 524 A.2d 951, 953

                (Pa. Super. 1987) the court held:

·-------   - -------------- __ An.action.in.mortgage.foreclosure   is strictly.an.m.zezs
                               proceeding, and the purpose of a judgment in mortgage
                               foreclosure is solely to effect a judicial sale of the
                               mortgaged property. Meco Realty Co. v. Burns, 414 Pa.
                               495, 200 A.2d 869 (1964). A judgment in a mortgage
                               foreclosure action is not a judgment for money
                               damages and therefore cannot be "an action to collect
                               amounts owed" or "an action to collect the debt" as
                               required under § 1640(h) and (e) of the Truth-In-
                               Lending Act.


                See also, Green Tree Consumer Discount Co. v. Newton, 909 A.2d 811 (Pa. Super.

                2006)(acknowledging      that while recoupment may be a defense in some actions, party may

                not assert such defenses when seeking remedies under TILA and section 1640 in mortgage

                foreclosure action).

                        Based on the above, the court makes the following

                                                          CONCLUSIONS OF LAW

                        1.      The court has jurisdiction over this matter pursuant to 41 Pa. C.S.A. §93 l(a).

                        2.      Venue is properly set in the Court of Common Pleas of Chester County.

                        3.      The court has concurrent jurisdiction with the federal district court to determine

                this claim. See 15 U.S.C. § 1640(e).

                        4.      The Mortgage was recorded properly at the Book and Page referenced above.

                        5.      All necessary and required parties have been named, served and have

                participated in this case.

                        6.      Defendants defaulted on the Note and Mortgage at issue.




                                                                11
                    7.     Apex's Mortgage was not subject to the requirements of Act 6/91 and its Act

            6/91 Notice, nonetheless, was not defective.

                    8.     Defendants' new matter included the defense ofrecoupment.

---------           9    ___Apex's Mortgage __was not subject to, the_re.quirements_____oLTILA/HOEPA.    __

            Even if Apex's Loan was subject to TILAIHOEPA, the defendant would not be entitled to a

            reduction of Apex's judgment by virtue of the defense ofrecoupment.

                    An appropriate order follows.



                                                           BY THE COURT:




            Date:   February 23, 2015                      MarkL.Tunnell,              J.




                                                           12
APEX COMMUNITY FEDERAL CREDIT                    IN THE COURT OF COMMON PLEAS
UNION,                                           CHESTER COUNTY, PENNSYLVANIA
            Plaintiff,
                                                 NO. 2013-11073
              v.
                                                 CIVILACIION
SANDRA E. ARASIN and                                                      5_E_N-'r·---
RANDY L. STETLER,
              Defendants.
                                                                       FEB 2 5 2015

Robert L. Stauffer, Esquire, Attorney for the Plaintiff                       ~
                                                                              c::,
Brian J Smith and Joseph A. Diorio, Esquire, Attorneys for the De.f#rz.d(Jnts ~
                                                                      ::,:
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                                               ORDER                  ~:J:C·     f"'".,       N
                                                              ~c:,r•.     <..,.) r
                                                                :z: ,,. .        . "'"",
       AND NOW, this 23rd day of February, 2015, following ab~,      ~f~ial¥ Jati~fY 23,
                                                                           ;:o.·.              w               -
2015 and post-trial briefing by all parties, it is hereby ORDERED thai-< '                      U1
                                                                                                ·.0
        l.     An in rem judgment only is entered in favor of Plaintiff Apex Community

Federal Credit Union in the amount of $98,360.29, identified as follows,

               Principal:              $76,083.84
               Interest:               $19,417.48
               Late Charges:           $ 858.97 (plus interest at 14.49%)

and other costs and charges collectible under the Mortgage for foreclosure and sale of the

mortgaged premises.

       2.      Plaintiff may foreclose only against the real estate located at 876 Cedarville

Road, Pottstown, PA 19454, Parcel 17-3-205 recorded in the Office of Recorder of Deeds of

Chester County at Mortgage Book 6887, page 2125 secured by the Mortgage dated July 22,

2008 and recorded in the Office of the Recorder of Deeds, Chester County, Book Number

7510 at page 91.

                                              BYTHECOU1;;;                                ~n
                                                    %.~
                                              Mark L. Tunnell,                           J.
                                                                        Circulated 07/15/2016 03:24 PM
                      BENT


APEX COMMUNITY FEDERAL                           IN THE COURT OF COMMON
CREDIT UNION,                                    PLEAS
              Plaintiff,                         CHESTER COUNTY,
                                                 PENNSYLVANIA
              v.
                                                 NO. 201-3--1-101-3-
SANDRA E. ARASIN and
RANDY L. STETLER,                                CIVIL ACTION
              Defendants.

Robert L. Stauffer, Esquire, Attorney for the Plaintiff
Brian J. Smith and Joseph A. Diorio, Esquire, Attorneys for the Defendants
                                                                                           -
                                         ORDER


       AND NOW, this 81h day of June, 2015, after oral argument, the post-trial motion

of defendants is DENIED.1

                                       BY THE COURT:




                                       Mark L. Tunnell,                J.



                Defendants' post-trial motion raises three challenges to the court's thirteen
page Decision and Order dated February 23, 2015. Defendants first disagree with the
court that the mortgage at issue was a "hybrid" mortgage (secured by (i) a property with a
residence and (ii) a property involving land only) requiring a separate statutory analysis.
They contend that the mortgage is "part of a package," subject to the statutory analysis
applicable to solely residential mortgages and the statutory defenses raised by defendants.
According to defendants, if analyzed using this criteria, they succeed in this action.

        Although the court acknowledges defendants' disagreement with its conclusions,
they have failed to identify any error in the court's legal reasoning, whether through case
law or other legal precedent. The arguments presented in defendants' post-trial briefing
and at oral argument were the same as those the court considered and rejected at the time
it rendered its Decision.

        The court's next alleged error is related to the first. Defendants argue that the
court improperly amended sua sponte plaintiff's complaint "when it concluded that the
           focus of plaintiffs claims was only the vacant land" and therefore the statutory
           requirements applicable to residential mortgages did not apply. This argument too was
           presented to the court during post-trial briefing and specifically addressed in the court's
           Decision at page 8 .

. ·-·-·· ·-·- - ---------· .The.court's.acceptance of plaintiffs decision to limit-its requested-relief-to-------- --·   ----
                  foreclosure on the unimproved land did not amend the complaint. Even if it was
                  considered an amendment, it was permissible. Plaintiff stated in its post-trial briefing and
                  proposed findings of fact/conclusions of law that it was proceeding only upon the
                  unencumbered land. If defendants view that decision as an "amendment," then plaintiff's
                  statements constituted a request for amendment, which the court granted as permitted
                  under Pa. R. Civ. Pro. 1033. See Horowitz v. Universal Underwriters Ins., 397 Pa. Super.
                  473, 580 A.2d 395 (l 990)(recognizing that Rule 1033 permits amendments to pleadings
                  at any time, including before, during and after trial.) Furthermore, there has been no
                  showing that any "amendment" violated a positive rule of law or prejudiced defendants
                  such that it should not have been allowed.

                   Finally, defendants challenge the court's conclusion that if the statutory
           provisions ofTILA/HOEPA applied in this case (which it had concluded earlier did not),
           the defense of recoupment was not available to them. Despite defendants' re-assertion of
           that argument post-decision, the court has not been persuaded that a different conclusion
           is warranted in this case.
                                                                     Circulated 07/15/2016 03:24 PM




APEX COMMUNITY FEDERAL                          IN THE COURT OF COMMON
CREDIT UNION,                                   PLEAS
         Plaintiff/ Appellee,                   CHESTER COUNTY,
                                                PENNSYLVANIA
              v.
                                                NO. 2013--1-1073
SANDRA E. ARASIN and
RANDY L. STETLER,                               CIVIL ACTION
          Defendants/Appellants.

Robert L. Stauffer, Esquire, Attorney for the Appellee/Plaintiff
Brian J Smith and Joseph A. Diorio, Esquire, Attorneysfor the Appellants/Defend~
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                                                                           __, ::;:: <. .,      <J1         l
                                       OPINION                              i~\~r~-                         rn
                             Pursuant to Pa. R.A.P. 1925(a)                 os·.                 :Pl'           ·o
                                                                            OJ::>- -              :it
                                                                            .--o ;o ;._1 .            I.D
       Sandra Arasin and Randy Stetler ("Appellants") filed a timely appear fromllhe

Decision and Order of this court entered February 23, 2015 in this mortgage foreclosure

action following the denial of their motion for post-trial relief by Order dated June 8,

2015. On July 10, 2015, the court ordered Appellants to file a Concise Statement of the

Errors Complained of on Appeal. They did so.

       After review, the court believes that the appealed Decision and Order adequately

explains the court's reasoning for its decision and addresses the main errors identified in

the Concise Statement. In the interest of completeness, the court will address further two

issues raised by Appellants' Statement of Errors.

Errors Nos. 1, 3, 4, 6, and 8.

       Although set forth as five (5) distinct errors by Appellants, Error Nos. 1, 3, 4, 6,

and 8 are simply different ways of arguing the same point - the court, in Appellants'

view, improperly analyzed the subject mortgage as a "hybrid" mortgage as more fully
explained in the court's Decision. The court obviously disagrees with Appellants for all

of the reasons set forth in its initial Decision.

        ErrorNo. 2.

       Error.No, 2 _ .alleges.that the court erred "when it failed to find.that the Federal

Truth In Lending Act and its subpart the Home Ownership Equity Protection Act to be a

disclosure statute effective upon the offer of credit and not at the time of the

commencement of foreclosure or at the entry of any judgment." The court is admittedly

unclear as to what is meant by this alleged "error." To the extent that Error No. 2

challenges in yet another way the same decision of the court as expressed through Error

Nos. 1, 3, 4, 6, and 8, see supra. The court, however, views this alleged error as an

attempt by Appellants to raise an issue for the first time on appeal. Appellants made no

such argument in their Motion for Post-Trial Relief or the brief submitted in support

thereof. This issue has not been properly preserved for appellate review and Appellants

have waived any such challenge. See Parker Oil Co. v. Mico Petro and Heating Oil,

LLC., 979 A.2d 854 (Pa. Super. 2009).




                                                    BY THE COURT:




                                                    Mark L. Tunnell,                    J.
