DS News - Bank of America

36 K elsey Grodzicki serves as Managing Attorney of the Default Services Department at Campbell & Brannon, LLC, a Georgia-based real estate law firm. His primary focuses are real estate litigation, mortgage servicing/foreclosure litigation, bankruptcy litigation, and nonjudicial foreclosures. He is a respected speaker and writer, offering insight on legal developments in the servicing industry, as well as the Dodd-Frank Act. He holds a J.D. from Stetson University College of Law. Are there any nationwide implications of the recent Illinois appellate ruling in Beneficial Illinois Mortgage v. Parker, as it pertains to TILA counterclaims? Illinois' appellate court ruling on TILA's statute of limitations and statute of repose high- lights that consumer protection laws will be ever present and that lenders and servicers must not only be proactive but must prepare to react. ere is a constant interplay between federal laws and regulations and state laws that requires an in-depth understanding of not only the applicable federal laws but also the individual state laws that may govern. For example, as the Beneficial Mortgage Court points out, 15 U.S.C. § 1640(e) sets a one-year statute of limitation for failing to comply with a recission request, a three-year statute of repose for starting the recission process, and then opens the door to allow for counterclaims relating to recission that occur after these time periods run, so long as they do not violate applicable state law. As an aside, there is a difference between a statute of limitation and a statute of repose: with a statute of limitation, the period typically starts when the claim is, or should be, known to the claim- ant; with a statute of repose, the time to bring a lawsuit is set by law, even if the injury has not occurred or been discovered yet. e poten- tial complex analysis required by these three sentences in 15 U.S.C. § 1640(e) drives home the need to have competent local counsel in each jurisdiction in which loans are serviced. e Beneficial Mortgage decision should help reaffirm the commitment throughout the mortgage industry to ensuring matters are done "by the book" and focusing on having the right policies, procedures, and employees to exercise strong diligence when originating loans, and the necessary due diligence with buying loans or acquiring servicing rights to loans after origina- tion. Specifically, what does it mean for lenders and servicers? Lenders and loan servicers must also ensure that their attorneys keep up with regulatory case law from across the country. Under 15 U.S.C. § 1640(e), it's clear that, subject to state law, these COUNSEL'S CORNER Regulatory Compliance in Today's Technology-Inundated Mortgage Industry "The Beneficial Mortgage decision should help reaffirm the commitment throughout the mortgage industry to ensuring matters are done 'by the book' and focusing on having the right policies, procedures, and employees to exercise strong diligence when originating loans, and the necessary due diligence with buying loans or acquiring servicing rights to loans after origination." Kelsey Grodzicki Managing Attorney, Default Campbell & Brannon, LLC

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