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Dealing with homeowners who “want more time”

“I Want More Time.”

Lenders/servicers are often confronted with emergency motions or petitions by borrowers on the eve of sheriff’s sale or lock-out seeking continuances for more time to: be evaluated for loan modifications (though not available to borrowers in ejectment, borrowers still think they are); sell the collateral; allow their children to finish the school year; pack; or make alternate living arrangements.

In these cases, homeowners facing ejectment have done very little, rather than take action when foreclosure is first filed.

In their motions/petitions, they generally neglect to address why they have procrastinated, usually they did not adequately address their financial situation earlier. Instead, they make an emotional plea for sympathy claiming, among other things, that they will be homeless. Frankly, there is no law in Pennsylvania stating that your collateral must serve as free housing for borrowers.

These motions/petitions rarely contain any legal grounds and, rather than holding full evidentiary hearings, courts generally render snap decisions allowing more time, sometimes before your counsel is finished arguing. In Pennsylvania, continuances like these are supposed to be decided according to a balancing test: rights of lenders vs. rights of borrowers.

More often, the pendulum swings in favor of borrowers regardless of circumstances — borrowers who have engaged in misconduct are often given even more time. In two ejectment cases on opposite sides of the state (Philadelphia and Westmoreland Counties), borrowers filed several motions to stay/postpone the lockout. In each case, judges imposed re-filing bars.

Not only did the borrowers disregard the re-filing bars in filing yet further motions to stay/postpone lock-out because they both needed “more time,” the courts did too and further postponed lock-out to accommodate the borrowers. The courts ordered short postponements to, presumably, avoid appeals. However, the courts’ actions are disconcerting on several levels.

Do court orders now have little or no weight? Do judges have a vested interest in helping and/or appeasing their constituents? Probably both.

From a bird’s-eye view, disregard of re-filing bars signals that procrastination has certain rewards, that borrowers can reside in your collateral rent-free for lengthy time periods after sheriff’s sale, that court orders do not really matter, and that judges can bend rules.

After all, what good are court orders if judges do not even follow them?

One could only imagine the anarchic implications if we all suddenly decided to follow suit and not follow court orders anymore. This article is not a call for anarchy as it is believed that Pennsylvania courts would not hesitate to sanction “big banks” for violation of court orders. What this means for lenders/servicers is that (1) re-filing bars are not absolute; and (2) there will be even more delay and costs if judges disregard re-filing bars in order to give borrowers “more time.”

Troy Freedman is an attorney with Richard M. Squire & Associates. The opinions expressed above are his own. His earlier blog “Dealing with a Rambo-type foreclosure litigator” can be found here.

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