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Home Foreclosures: 8.8.3.5.1. Individual arbitration

Where an enforceable arbitration agreement forecloses class arbitration, class action litigation in court, and individual court litigation, adequate client representation may require raising the consumer’s claims in an individual arbitration proceeding. While this is not preferred, under some circumstances consumers may achieve good results, particularly if the selected arbitrator has an open mind on consumer claims.

Home Foreclosures: 8.8.3.5.2 Class-wide arbitration

Where an arbitration clause prohibits class-wide arbitration, an arbitrator is unlikely to allow such relief, and a court would almost certainly overturn a class-wide arbitration award. Most, but not all arbitration clauses prohibit class-wide relief—some are silent on the issue.

Home Foreclosures: 15.3.3.3.3 Mortgagee optional election for non-borrowing spouses with HECMs predating August 4, 2014

After several years of continued advocacy by consumers and servicers concerning the significant problems and denials due to MOE deadline issues, HUD substantially revised its policy with the issuance of Mortgagee Letter 2019-15 on September 23, 2019. Like the prior versions of the MOE, Mortgagee Letter 2019-15 gives lenders the option to assign the loan to HUD and allows an eligible non-borrowing spouse to remain in the home.

Home Foreclosures: 5.5.2.7.2 Impact of E-Sign and UETA when state or federal statutes require written notices to borrowers

State statutes mandating foreclosure-related notices to borrowers are typically clear in defining the content of a required written notice and how it must be served. For example, a New York statute requires a ninety-day notice to the borrower before a lender can commence a judicial foreclosure.279 The notice must contain a prescribed text explaining how the New York foreclosure process works and describe steps the homeowner can take to avoid foreclosure.

Mortgage Servicing and Loan Modifications: 11.9.2.1 Scope

The Truth in Lending Act (TILA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), effectively prohibits forced arbitration of disputes involving closed-end loans secured by a dwelling and open-end loans secured by a consumer’s principal dwelling.187 TILA defines a residential mortgage loan as “a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the

Mortgage Servicing and Loan Modifications: 11.9.2.2 Two Separate TILA Provisions Limit Arbitration

In covered mortgage loans, TILA prohibits any terms that require arbitration or any other non-judicial procedure as the method for resolving any controversy or settling any claims arising out of the transaction (hereinafter referred to as the “(e)(1) provision”).197 The parties can agree to arbitration or a similar procedure at any time after a dispute or claim under the transaction arises.198

Mortgage Servicing and Loan Modifications: 11.9.2.4 Effective Date and Retroactive Application

There is no question that the TILA limitation on arbitration agreements in mortgage loans applies to any arbitration agreement entered into after June 1, 2013. This subsection considers the enforceability of arbitration agreements entered into before that date. Two issues are examined. First, whether the TILA requirement was effective as of June 1, 2013, or July 22, 2010. Second, whichever date is used, does the provision prevent the current enforcement of arbitration agreements entered into before the effective date?

Mortgage Servicing and Loan Modifications: 11.9.2.1 Scope

The Truth in Lending Act (TILA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), effectively prohibits forced arbitration of disputes involving closed-end loans secured by a dwelling and open-end loans secured by a consumer’s principal dwelling.187 TILA defines a residential mortgage loan as “a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the

Mortgage Servicing and Loan Modifications: 11.9.2.2 Two Separate TILA Provisions Limit Arbitration

In covered mortgage loans, TILA prohibits any terms that require arbitration or any other non-judicial procedure as the method for resolving any controversy or settling any claims arising out of the transaction (hereinafter referred to as the “(e)(1) provision”).197 The parties can agree to arbitration or a similar procedure at any time after a dispute or claim under the transaction arises.198

Mortgage Servicing and Loan Modifications: 11.9.2.4 Effective Date and Retroactive Application

There is no question that the TILA limitation on arbitration agreements in mortgage loans applies to any arbitration agreement entered into after June 1, 2013. This subsection considers the enforceability of arbitration agreements entered into before that date. Two issues are examined. First, whether the TILA requirement was effective as of June 1, 2013, or July 22, 2010. Second, whichever date is used, does the provision prevent the current enforcement of arbitration agreements entered into before the effective date?

Student Loan Law: 11.2.4 Qualifying Jobs

Forgiveness is based on the employer’s eligibility, not on the type of job. Anyone working on a full-time basis for a qualifying employer at a public service organization, regardless of their job title or description, may qualify.

Student Loan Law: 11.2.5.1 The Application Process

The regulations do not explain what type of information is required at the end of the ten-year period to prove eligibility, stating only that a borrower may request loan forgiveness by filing an application approved by the Secretary.71 The Department has issued a combined certification and application form that may be used to certify employment, track credit, and apply for forgiveness.72 While annual certification is not required, a borrower must have submitted employment certification forms

Student Loan Law: 11.2.5.2 Problems with Application Processing

Borrowers first began applying for forgiveness under the PSLF Program in the fall of 2017. As of October 2022, the Department reported that it had processed discharges for 12,527 borrowers under the normal PSLF Program rules, for 6,501 borrowers under TEPSLF, and for 215,555 borrowers under the limited PSLF waiver. Out of a total of 2,897,797 PSLF application forms submitted, 55.1% were reported as complete and processed, 29% incomplete or missing information, and 16% in active processing.

Student Loan Law: 11.2.5.3 The TEPSLF Program

Congress made an initial attempt to assist borrowers who had been misled by their servicers through the Consolidated Appropriations Act in March 2018. The Act provided $350 million to fill the gap in situations where some or all of a borrower’s 120 Direct Loan payments were made under a nonqualifying repayment plan.96 The Department began administering this program—called the Temporary Expanded Public Service Loan Forgiveness (TEPSLF)—in May 2018.97

Student Loan Law: 11.2.5.4 Period of Student Loan Payment Pause Counts Toward PSLF

In March 2020, the Department of Education began providing temporary emergency relief to student loan borrowers in response to the COVID-19 pandemic. The Department’s COVID-19 emergency relief involved a number of time-limited measures, including a pause on federal student loan payments, a 0% interest rate, and stopped collections on defaulted loans—referred to as the student loan payment pause (payment pause). The payment pause initially only applied to borrowers with Direct Loans or any other Department-held student loans.

Student Loan Law: 11.2.5.5.2 The impact of the one-time IDR account adjustment on PSLF borrowers after October 2022

Although the PSLF waiver expired on October 31, 2022, the Department has stated that because the one-time IDR account adjustment policy will not be fully implemented until after December 2023, PSLF borrowers will have one more chance to see their qualifying payment count increase.117 This is because the PSLF Program rules require public service workers to make payments on their loans on either the ten-year standard repayment plan or on one of the IDR plans.