-: SJC-13191.
HSBC Bank USA v. Tommy L. Morris and another.
-: Okay, Mr. Morris.
I'll hear from you.
-: Your Honor...
Your Honor,
and Chief Justice,
and Associate Justice.
My name is Tommy L. Morris,
and my wife's name is Mary L. Morris.
She couldn't be here today.
I just got out the hospital.
But...
It is our home
and our right
to equal protection
from this court
and all other courts
as to our property
and the life of investment of our wealth
and our place of retirement,
our home and our protection from a predatory loan,
which is before this court.
When...
When the rights of the peoples are violated,
and the legislator
and the government
have tried to protect us,
and we be denied
based on a technical reading
of a small part of the law,
ignoring it overall,
and the law history that is part of it.
It needs to be clear
that we did not get any money
from this scam.
The money went to the parties
that overvalue the homes.
What we got was a house worth five summit
of the markets that we signed for.
We was told our one mortgage
was going to be $1400 a month.
We was shocked to find
that we had two mortgages loan,
and we was paying $2000 a month,
starting 2005.
By the end of 2007,
we was paying $2,500 interest on it,
which we had paid $50,000 total
for the first two years.
So we did not know it,
but the brokers knew it.
If we were informed about the unaffordable mortgage,
we would have never bought the house.
We were over 60 when we closed.
We are African American from Brockton,
the first city in Massachusetts
to go majority of minority.
The 1997 Division of Banks letters
named six states and federal law
and 60 regulation originate law of mortgage loans.
All of these were violated in our solution.
It is promised to the bank
that the brokers,
they would be aggressively prosecuted
if they violated these laws.
The complainant violated many laws.
We need to know if the court
is going to hold these-
them accountable.
After a decade of discrimination,
we was often told that we bought too much house.
We clearly bought way less house.
We was scammed into
$100,000 too much debt.
The town general sued Fremont in 2007 for $10 billion.
That case recognized my loan as predatory.
We only got $2,000 settlement.
There is no challenge to the fact that
this is a predatory loan.
The appeals court and the appellate agree
that the predatory loans act apply here
to end discrimination in lending practice
to protect home buyers.
And we argue in violation of regulation laws,
what I understand is calling the common law concept
like unconditional,
long, rich, uncomfortable,
or long origination.
The law words was very broad
and were supported to make sure
that we was not denied a remedy.
So you see section 15C.
See our filing and the extensive history
from our AMICA,
the board, equal protection, purpose-
purpose law.
Its words made clear
that the contract violation is like our
shall not create a modest debt.
They don't seem to come into a legal consistent of at all.
The real question is that
the legislators act in this law is previous,
and in previous laws
like the Massachusetts Equal Rights act
and the Red Lining law,
to protect peoples from being put in
illegal and immoral mortgage contracts knowingly.
Will we get justice?
They interpreted this law to say,
as long as they willing to convict
a wrongful foreclosure on the contract,
that was never legal,
they can get away with it.
Then, I do not know where we-
what we're doing for justice.
Judge: Thank you.
Okay, Attorney Caya.
-: Chief Justice Budd.
Chief Justice Budd,
Associate Justices,
Greetings David Caya for the appellants,
Tommy and Mary Morris,
may it please the court.
Your Honors,
this is a consumer protection case
and a case about the regulation
of a certain kind of contract.
The core issue in this case
is whether the Morrises have a valid defense
under the Predatory Home Loan Practices Acts
chapter 183C or chapter 93A
in a summary process eviction case
to a complaint brought by a plaintiff,
who therein claims to have superior title
by virtue of a foreclosure of a mortgage.
And by that, a superior right to possession of their home.
Among their other defenses,
the Morrisses asserted that this loan
was prohibited by the PHLPA and chapter 93A,
and therefore the foreclosure is void
and was therefore wholly ineffective
to transfer their title to the plaintiff appellate.
The central housing court ruled in the appeals court
affirmed that the Morrisses
did not have a valid defense or counterclaim
under the PHLPA or chapter 93A.
Due to the time limitation,
I will limit the argument to the PHLPA issue.
The gravamen of the appeals court's holding
involves the language in section 15B-2,
in which the court says-
which it says in part,
"A borrower may at any time during the term
of a high cost home mortgage loan
employ any defense claim counterclaim,
including a claim for a violation of this chapter."
The crux of the appeals court's holding
is the legally operative effect
it gave to the phrase
"during the term of a high cost home mortgage loan."
The holding is that because the loan was foreclosed,
the term of the loan ended,
and therefore because 15B-2 could only be used
during the term of the loan,
the Morrisses could not use any prophylactic protection
the act gives to them as consumers.
But what does this phrase mean as applied here?
-: Can I stop you for a second?
I understand your statutory argument,
and both the dissent
and the majority decisions of the appeals court
are very, you know, considered.
So I'm trying to just understand how this works.
So under your view,
we've got a, like a 30 year term?
I can't remember what this term of this mortgage is,
was it 30?
Attorney Caya: They are.
-: So it's like a 30 year mortgage,
and they stopped paying in 2008.
Right?
Attorney Caya: Yes.
-: So does that mean-
And now this property was bought by the bank itself.
So we don't have some other person coming in
and getting hold of this.
I'm just trying to understand the limits of this.
So again, someone stops paying.
It's now 14 years they haven't paid on their mortgage.
And the term is 30 years.
And even if this property
had been transferred to someone else,
they could still bring this action.
Is that right?
Attorney Caya: I would say so.
-: So I'm just trying to understand,
are there no limits to this?
That if a bank engaged in this,
and someone didn't pay,
and 30 years later...
I'm just trying to understand
how this is gonna work in the real world a little bit.
Attorney Caya: Your honor,
this court doesn't have to decide all of those questions.
-: Well, it does, right?
Because-
-: What you're implying is
the good faith purchaser doctrine
with no notice of any defenses or-
Justice Kafker: Oh, we've got those under your view.
Again, we look at the term, it's 30 years.
And I understand your reading.
I'm just trying to understand how this works, though, okay?
And also, does the act have a provision
that allows the bank to-
requires the bank to shrink the interest rate
or anything like that?
Is there no-
There's no middle ground here,
either the bank has it,
or this predatory loan is totally unenforceable,
even 30 years later.
I'm just trying to understand how this works in practice.
-: I've seen these adjustable rate mortgages,
where people don't understand-
They have a payment that they're counting on.
And then the very sophisticated mortgage contract,
say it's tied to the Libor rate,
which is the London inter-bank exchange rate for-
Justice Kafker: I get this.
-: all those things.
And then what happened?
My payment went from $1400 to $2000.
But the point that I wanted to make today
while I have the time-
Justice Kafker: Well I suspect Chief Justice Budd
is gonna give you a little time.
'Cause this is kind of hard. -: Sure.
Justice Kafker: So we're not gonna let you go in-
-: It was hard for me, Justice, too,
Justice Kafker, too.
Justice Kafker: So, I'm just, again,
I get your argument that the term means 30 years,
whatever the term is,
but I'm just trying to say,
you believe that even a good faith buyer
would be outta luck.
The way this works is this good faith-
I mean, this defense can be brought years after
the summary process-
-: Yes.
Justice Kafker: and can basically recreate possession.
-: The theme of my argument is that
some contracts are illegal and wholly unenforceable,
such as contracts to accomplish an illegal purpose.
Doesn't matter how long it was.
A court is never gonna enforce it.
We don't enforce contracts against minors,
except for the reasonable value of necessities provided.
We have the Statute of Frauds
that we inherited from England,
which was enacted in 1677.
And it starts off with,
"No action shall be brought"
and then lists several types of agreements and contracts
that must be in writing
and signed by the person to be charged
in order to be enforceable.
So there's no expiration on that.
Here, we have some high cost home mortgage loans
that are legally originated
and some that are prohibited entirely.
And what I'm saying here is that
those loans that are prohibited entirely by this act,
they cannot be ripened into a legal mortgage
by the act of foreclosure.
Because if we have a body of foreclosure law
that a legislature has entrusted the industry
to do the right thing with,
then how can we say we're gonna let you use that trust
to make it, a loan that was illegally originated,
and make a valid foreclosure title from that illegal law.
That's the crux of my argument today.
-: Counsel, can I ask you to address 15B itself,
the language there that says
"Limited to amounts required
to reduce the borrower's liability?"
How does that affect how we read 15B-2?
Attorney Caya: How it affects how we would read 15B-2 is
the disagreement that I respectfully have
with the appeals court.
And that is that we're talking about
the term of a high cost home mortgage loan.
Well, there's a term of a legally originated
high cost home mortgage loan
and the term of something illegally created.
The two gatekeeper pre-origination sections
are sections three and four.
And they very clearly say
"Thou shalt not make one of these loans
unless certain pre-conditions precedent are satisfied."
So, how can we say that
we're gonna constrict the homeowner borrower's remedies
by the closing of a term of an illegal loan?
And I would respectfully also argue
that the borrowers that-
-: I guess my question is
hasn't the legislature limited the borrowers remedies
to those required to reduce the borrower's liability?
-: And what I would say to that is
yes, that is one remedy.
And it also says that the borrower's liability
can be extinguished entirely.
And yes, that is strong medicine,
but I would respectfully submit
that it's a small price to pay
to let these industry players understand
that this court means business,
that our law enforcement means business,
and that if they engage in these practices,
there's gonna be consequences.
-: And do the Morrisses have a continuing liability
under the loan that they originally took out?
-: If the legislature prohibits
the origination of this loan under section three and four,
then they never had any liability to start with.
-: No, but do they now?
Like, is there....
Attorney Caya: I argue that they don't.
-: Well-
Justice Kafker: But do they get a free house?
I'm confused.
-: Right.
Justice Kafker: Do you, I mean-
Attorney: As I said-
-: That's the tricky part of this.
You don't get something for nothing.
So...
What is their obligation?
'Cause they don't get to stay in the house
if they're not paying anything,
or is your view as punishment
for the loan being excessive,
the remedy is you get a free house?
I'm just trying to understand what you're saying.
-: They did pay a lot.
And they paid on an illegal loan.
And they-
Justice Kafker: So how much did they pay?
I'm just-
They paid for how long a period of time?
-: Honestly, I don't know-
Justice Kafker: A short period of time, right?
Because they got the loan in what year?
-: 2005.
Justice 1: Didn't it go up after two?
Wasn't that when the problem happened,
that it went up after two years?
-: I'm not sure when the payment spiked up,
but around that period of time,
I looked at the Fed's website for the Libor rates,
and they did go up.
So that's why a lot of people had a payment shock.
-: What did we do in the SJC?
Did we have a remedy in the original case?
Not these people's case, but the..
Attorney Caya: The Fremont case?
-: Yeah, the 452 case,
what was the remedy we came up with?
-: I have to plead ignorance to that, Justice Kafker.
I don't know.
I think usually in those attorney general actions,
they say that the consent decree or the judgment
does not bar any other rights or remedies
that people that were the subject class may have.
-: But we didn't say that the rates reduced to-
'Cause like, in other predatory lending categories,
I have this big memory,
interest can't be beyond this.
And if it is,
it automatically reduces.
But we don't have anything like that here.
I'm just-
-: Well, I'd like to address your concern, Justice Kafker.
-: Well, it's my concern-
My concern is not just, you know,
we're doing cases for everybody's cases.
So, are there a bunch of innocent purchasers out there?
Is there a bunch of title that is now in jeopardy
if we rule your way?
Are we giving free houses away?
I just don't understand what the result of this is.
I understand your argument.
-: This court sometimes resorts to
the doctrine of prospective rulings,
as this court did in the Pinty case.
What happened in that case was
a borrower did not get the legally required notice
that they have the right to bring a court action.
And the way that this court handled that was that you said,
"What will happen to all the purchasers out there
that had no idea that they didn't get
the legally required notice?"
So from this point forward,
I think it was July of 2015,
any notice that does not comply with that,
it does void the foreclosure.
And hopefully after this rule,
after this holding,
we trust that they will make sure
that it is the required.
-: But like, in your case,
what I understand from this record,
your client received $2,000
as a settlement for that Fremont case.
Is my recollection correct?
Attorney Caya: Yes.
-: But you're saying
"Oh, we don't have that settlement,"
"That document's not gonna be in this record."
Right?
Where there's some language to the effect
that you're saying
you reserve your private remedies or something like that.
We don't know if that's the case, right?
Attorney: To be honest with you, I had a lot to do.
-: Yeah, no, I understand.
You've stepped in at the last second.
I'm not criticizing.
So, sure.
But I'm just trying to get a sense of-
And again, you're not also aware of what the Supreme-
We remanded Fremont
when we decided that case.
You don't know what the result of-
That judgment post-remand is not in this record.
Right?
Attorney Caya: Correct.
-: Okay.
Justice Lowy: So do we view this as a
legally originated loan,
and then when it bloomed,
it became illegal?
Or was it a prohibited loan from day one?
-: Section three says that
no lender shall make one of these loans,
a high cost home mortgage loan,
unless the lender receives certification
from a qualified counselor,
that the borrower has received the counseling
on the advisability of this loan transaction.
Without that certification,
they're not even supposed to make these loans.
So Mr. Morris says that neither he nor Mrs. Morris
received any counseling.
And so therefore, they have a remedy,
not only section 15B, which-
I would argue that they do have that remedy in there-
but also they can rely on
section three itself or section four,
which is also a condition precedent gatekeeper
to the allowance of these loans even coming into existence.
So what we're saying here is
the language of 15B
that says that you must act
within the term of a high cost home mortgage loan
to avail yourself of any of these remedies.
There's not only that,
but the very fact that if you are able to allege
that the conditions president to origination didn't occur,
and you can prove it by a preponderance of the evidence,
then that's a complete defense
to the enforcement of this loan
and a complete defense to the foreclosure
of that illegal mortgage loan.
-: Even as against a subsequent assignee
of the mortgage loan?
-: I would argue yes.
Because if...
If I got a check,
if the court could indulge me in this analogy,
and somebody said they are giving me this check,
and I didn't happen to look over the endorsement,
and it was-
on the endorsement line,
it said void on it,
and I tried to negotiate the check with a bank teller,
I wouldn't get anywhere.
Same is true with a void foreclosure deed.
And I understand the court's concern.
What will that do?
Will that cause a wave of void titles out there?
And the way this court has handled that in the past
is to fashion some holding
where it's prospective or something like that,
that addresses that concern,
which is, I agree, a legitimate concern
for third party purchasers
who don't have any idea of what's going on here.
-: Okay, are there any other questions?
Thank you very much.
-: Thank you, Your Honors.
-: Good afternoon.
May I please the court.
Attorney Christopher Williamson
for the appellee in this matter.
Like my brother,
I'm gonna primarily focus on
the PHLPA issues of this matter.
If there are any questions about other aspects,
I'm happy to address 'em,
but I think based on the court's concern
and the appellate court decision prior,
that that's really gonna be the focus of this.
Turning to the clear language of the statute,
the PHLPA allows a borrower to assert claims
if the borrower could assert
against the lender of the home loan,
against any subsequent holder or assignee of the home loan
in two circumstances,
which I believe we are all familiar with.
Section one,
they may bring an original action at any time
within the first five years of the loan.
And that would be regardless of default status.
Whereas the second term is much more broad
and doesn't essentially have a time cap
besides the "during the term of the loan" language
we're now all familiar with.
They can employ any defense claim counterclaim,
including a claim for violation of the statute,
after an action to collect on the home loan
or foreclose on the collateral securing the home loan
has been initiated,
or the debt arising from the home loan has been accelerated,
or the home loans becomes 60 days in default,
or in an action to enjoin foreclosure,
or preserve or obtain possession of the home
that secures the loan.
Based on the plain reading of section 15B,
the legislature and drafting,
it essentially has already said,
you can bring this claim at any point
during the foreclosure process,
whether that be initial default,
whether that be acceleration,
whether that be prior to foreclosure to enjoin,
whether there's some sort of action where
the mortgagee or the lender at that time
during the terminal
might have had a reason to take-
-: Why, counsel,
why can't any action to obtain possession
include this action,
which is a summary process action by the bank
to obtain possession.
-: [Attorney Williamson] Certainly.
The simple answer, Your Honor,
would be that it has to be
during the term of the loan
and that the loan is foreclosed.
And when the loan is foreclosed on,
that terminates the term.
Speaking hypothetically-
-: It terminates the-
When there's a foreclosure there,
it terminates the mortgage.
And, so the question is,
does it also terminate the loan?
-: Yes, because as this panel was discussing before,
it's not guaranteed that the foreclosing entity
is gonna be the purchaser in a foreclosure.
It's convenient in this matter that's before us
that that happened to have occurred.
-: But what is your legal authority for the proposition that
the loan ends when the mortgage does?
-: Well I think just the plain reading of "during the term."
I think if I am using hypotheticals as my brother did-
-: I can't-
You know, as the Morrisses point out,
that the term of the loan be tied to its maturity date.
-: [Attorney Williamson] Well,
the maturity date can be accelerated,
as is the case in this case,
and as is made clear by the statute in section 15B-2,
where it mentions that the loan being accelerated
is a condition to bring that claim.
It certainly contemplates that just because, you know,
a foreclosing entity doesn't have to wait
the full 30 years,
if it's a 30 year loan,
before they bring the foreclosure,
they can accelerate the debt and bring the foreclosure.
-: So if you are right on your construction of
"during the term of a high cost home mortgage loan,"
what is the meaning of "in an action to obtain possession"?
-: Certainly.
I think there is some broadness to this and,
you know, I've given some thought to it.
The specific way I read it is
a borrower bringing an action
to either preserve or obtain possession.
So in that case,
either the borrower is bringing an action to preserve it,
or potentially the mortgagee
has taken possession of the property
under the terms of the mortgage.
-: [Justice Wendlandt] If that's true,
why wouldn't the legislature have said
"in an action by the borrower"?
-: Well, I think section 15B makes clear
that these are all actions,
which are all claims potentially brought by the borrower
against the mortgagee or their assignee,
going back to the first section.
Some examples I thought of of an action
to potentially obtain possession bought by a borrower
would be in situations where the mortgagee,
under the rights of the mortgage,
in this case paragraph nine,
took possession of the property,
whether it was vacant or abandoned,
or there was some sort of issues
where their interest was threatened.
And under terms of the mortgage,
they had the right to go in,
and potentially the borrowers could have challenged that
under the statute if they had it,
and that would've been an action to obtain possession
in that theory.
-: As a practical matter,
isn't it true that the majority of these cases
are by someone like your client
to obtain possession
when the person is a holdover?
-: Well, I think-
I'm not quite sure I understand what you mean, Your Honor,
when it comes to- -: Well that is-
-: these cases.
-: Why do you think the legislature
would have limited the remedies
available to people in the Morris' position
to situations which are not the norm?
-: [Attorney Williamson] Well, I don't think-
It seems like the normal situation
is when there's a foreclosure,
you send a notice to vacate,
and then whoever's there,
the homeowner doesn't vacate.
And so you bring a summary process
action to obtain possession.
Is that not the norm?
-: [Attorney Williamson] I think that's
two separate issues, Your Honor.
That might be the norm in a post-foreclosure situation,
where the mortgagee is the foreclosing entity,
but I don't believe that's what we're discussing here.
We're discussing whether there are actions
during the term of the loan
with regard to taking possession.
I think we're inputting that
the legislature may have-
it meant post-foreclosure, -: I need to, you know what-
but that my position is that they were not.
-: Counsel, sorry to interrupt you,
but I just wanted to-
I've obviously thought about this for a while,
and I guess...
Why would the legislature have created a remedy
for people in the position of being taken advantage of
by these improper loans
that is not available to the majority of those people?
-: [Attorney Williamson] I'm still not sure
I understand what you're saying, Your Honor,
but I...
This statute just is not one of them.
That being said,
they have ample time prior to foreclosure and this-
Justice Kafker: Why would we assume it's not one of them?
-: [Attorney Williamson] Because I believe-
I disagree.
I think the statute is clear that the property
still has to be securing the mortgage
at the time the claims are brought,
and the foreclosure would extinguish.
so that the property is securing that loan anymore.
Justice Kafker: The property is foreclosed.
It no longer secures the loan.
-: Correct. The loan has been satisfied.
-: So then you really control all the terms.
As the bank,
if you foreclose and immediately accelerate,
you-
They didn't do what they could've under section one.
The question is, did they have to?
-: Even after for the next, you know,
nine years until there was a foreclosure,
at any point during that period,
based on the plane reading of section B,
they could've brought a claim,
whether to just straight to enjoin foreclosure,
as we mentioned with the Pinty case,
there's specific language in the default notice
that they have the right to bring an action to challenge,
and they did not.
Just because they didn't take advantage of
the options that were available to them
over a nine year period-
Justice Kafker: Question.
Question is,
were they smart and stayed and waited and said,
"Okay, I'm not paying anything.
And I've got this other action out there."
I'm not sure that they were advised this way,
but their lawyer apparently told 'em
not to pay on the mortgage.
-: I disagree with that.
...has to be in place,
and they could bring it against
the assignee of the mortgage.
So theoretically,
if they did have claims,
they could have brought it against an assignee of Fremont,
in this case, my client.
However,
once foreclosure occurs,
that terminates the term.
And I believe when we look at
the possibilities which could occur
with bringing these claims post-foreclosure,
we run into-
It's clear that the borrower can only bring it against
the mortgagee or its assignee.
It can't bring it against a third party, whomever it is.
This actually makes clear it has to be against that entity.
So if a entity foreclosed,
sold it to a different party,
they couldn't bring those
in a subsequent post-eviction action.
The other aspect of that is that-
-: Hold up, I'm not sure I understand that.
I thought it was the opposite of that,
that the statute allowed them to sue assignees, right?
-: [Attorney Williamson] Correct.
But if the assignee,
if the mortgage holder or their assignee
is not the purchaser at the foreclosure,
they'd be barred under the statutes
from bringing claims against a third party,
because they're not the assignee.
-: So, I wanna make sure I understand that,
'cause that's important to me.
So if I haven't innocent purchaser of this house,
not this particular house.
-: [Attorney Williamson] Hypothetical, I understand.
-: Yeah.
Those people, are their-
is their title secure?
Zoom Bot: Recording in progress.
-: Generally speaking is much different than
based on claims under the PHLPA.
Under the claims of the PHLPA,
I would say, yes, it is secure.
Justice Kafker: Well,
only if we adopt your interpretation, if we can-
-: Under my interpretation, which I-
Justice Kafker: adopt your interpretation.
Are those third party people protected
under some other provision than the PHLPA?
-: Not that I'm aware of it,
except I think the statute is explicitly clear
that it must be raised against
a mortgagee or their assignee
during the term of the loan.
The other aspect of it that I found interesting is that
section 15B-2 specifically mentions that, you know,
the borrowers can employ any defense claim or counterclaim.
It expressly leaves out any third party claims,
meaning that if there was a summary cross-
-: [Justice Wendlandt] Can you repeat that?
It expressly leaves out what? -: Yeah, I apologize.
It expressly does not list third party claims,
meaning that if there was a
post-foreclosure summary process action
brought by a, let's say,
bonafide third party purchaser against the homeowners,
the homeowners couldn't then bring third party claims
against the foreclosing entity,
because those claims would be barred
under the specific language of that.
The third party claims are not, you know,
aren't mentioned as something they could bring,
which adds further finality,
or adds further argument to
the finality aspect of the statute,
that the term of the loan ends at foreclosure,
that the owner of the property,
once there's foreclosure is the title owner
via the foreclosure deed that's recorded.
They don't-
The mortgage has been extinguished.
I think to say that the mortgage extends beyond that date,
I think would run into some serious issues.
While it might benefit the borrowers in this situation,
theoretically, if a property foreclosed for $150,000,
and there's $250,000 due on the loan,
could the mortgagee
still look to collect payments from it
because there's money due?
No, they couldn't,
because there's a situation,
and there's a statute in place for deficiency actions.
The term has ended.
If the loan wasn't fully satisfied,
the foreclosing entity would have to do
what was statutorily required to bring a deficiency action,
but they couldn't expect payments
under the term of the loan post-foreclosure.
Justice Lowy: But doesn't the deficiency action
suggest that while the mortgage is extinguished,
the loan still exists?
-: No, I disagree.
That'd be the same as if, you know,
any situation where, you know,
you received a judgment, weren't paid in full,
and brought an action to recover the rest.
There's a finality in what occurred before.
There's a finality in the foreclosure.
You just haven't-
The foreclosing entity just did not recoup
the full amount they could've
and has the right to pursue more if they choose to do so.
My experience has been that often, they do not.
-: Isn't that the point, that they can?
The mortgage is extinguished,
but the loan remains outstanding.
So your client gets to try to get their money,
and they can't under this probably 'cause it's predatory.
But I mean, when you're out there normally doing this
on a permissible loan in a mortgage,
it's not extinguished, right?
The loan still is out there.
-: [Attorney Williamson] I disagree.
It is extinguished because-
-: Well, gimme a case,
'cause whether you disagree with me or not,
I think we have cases that say that
the loan is not extinguished,
even by the, you know-
The mortgage disappears,
but the loan doesn't, right?
-: I disagree.
I'm happy to supplement with a case if I could find one.
But as a practical matter,
once foreclosure occurs,
the total debt due is locked in at that point.
So the deficiency judgment is securing a sum certain
that is based on what financials were available
at time of foreclosure
during the time of the loan, not afterwards,
which runs to the hypothetical I was speaking.
Whereas if a mortgagee,
instead of a deficiency action,
tried to collect additional payments that were due
or interests that survived beyond,
that would be outside of the term of the loan.
They couldn't do so.
-: I just wanna make this as simple as I possibly can,
for myself and for no one else.
During the term of a high cost mortgage loan.
If the mortgage extinguishes
at the foreclosure,
does the loan still exist?
You say no,
but you can bring a deficiency action
to collect the outstanding amount
that wasn't recouped at the foreclosure.
So...
-: Yes, that's-
I apologize.
-: What I'm looking for is a case that says,
context of deficiency action or whatever context,
that even though there can be a deficiency action,
the loan no longer exists.
The foreclosure distinguishes not just the mortgage,
but the loan,
because that would really help inform us what 15B-2 means.
-: I understand, Your Honor.
As I stand here today,
I'm not aware,
but if the court would allow,
I'd like the opportunity to supplement,
if I could provide a case for them.
-: It seems to me,
and this might be an overstatement.
I'm not sure it's a case,
I think it would be the case.