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40 LEGAL INDUSTRY UPDATE NATIONAL FOCUS He added, "Communication remains difficult or impossible in many areas, and property inspections are necessary to determine the best outcomes for each investment. Law firms with a presence and experience in the U.S. Virgin Islands can be essential partners for servicers operating in the territory under these challeng- ing circumstances." Back in the States, Attorney General Jeff Sessions made efforts to roll back the bar former Attorney General Eric Holder put into place in 2015 when it comes to local and state police being able to seize property without warrants or criminal charges. As Phyllis A. Ulrich of Carlisle Law explained, "at decision to ex- pand civil-asset forfeiture by federal prosecutors could have a huge impact on mortgage profes- sionals moving forward." She noted that the federal forfeiture statute allows for the authori- ties to send a notice letter to a lienholder after a property has been seized as part of a criminal proceeding. e lienholder then has 35 days to file a claim before the lien is removed from the property—without any due process. "Because of this new power, federal prosecutors appear to be overzealously pushing these civil-asset forfeiture powers," noted Ulrich. As an example, Ulrich described a situation where the authorities could sell a property that isn't actually owned by the criminal, but where they have an unpaid land-installment contract in the property. "e good news is, in Septem- ber 2017, the U.S. House of Representatives unanimously approved three amendments that would defund the federal forfeiture program," Ulrich continued. However, as of this writing, the bill had not passed. On the New York front, the case of HSBC Bank USA, N.A. v. Ozcan may be one of the most significant decisions issued in the Empire State in 2017, according to Greg Sanda of Schiller, Knapp, Lefkowitz & Hertzel, LLP. Sanda explained that Ozcan "lessens one of the thorniest evidentiary problems for servicers prosecuting foreclosures in New York." At issue is the process of proving that the "90-day letter" was mailed to the borrower. "New York courts have made proving compliance more difficult by imposing an undue evidentiary burden on servicers under the guise of 'strict compli- ance'," said Sanda, explaining that the onerous standards imposed by New York require direct proof of mailing "or proof of a standard office procedure ensuring an item is properly ad- dressed and mailed." "Ozcan alleviates this burden to an extent," Sanda said, "holding that a mailing may be proved in any number of ways, not just the two listed above, as long as the documents relied upon and affidavit testimony meet the require- ments of the business records exception to the hearsay rule." Sanda added that this revised standard should prove easier for large and medium-sized servicers to satisfy. Mark Hernandez of Quintairos, Prieto, Wood & Boyer, P.A. shifted the focus to a Florida case that resolved an ongoing statute- of-limitations issue. In Bollettieri Resort Villas COA v. Bank of New York Melon, a first complaint was filed on February 1, 2008, with a September 1, 2007 default date. e case was voluntarily dismissed on May 19, 2011. A second foreclosure complaint was then filed on January 1, 2013, with a September 1, 2007 breach date. at would have put the second foreclosure outside the state's five-year statute of limitations (SOL). "In Bollettieri, the court acknowledged that the bank's second complaint was sufficient to establish that the foreclosure could be based on any of the missed payments since the initial breach and the complaint was therefore not barred by statute of limitations," Hernandez said. Hernandez explained that after the Florida Supreme Court decided not to hear the case, the case law was left standing so that "a foreclo- sure complaint containing an initial default date occurring more than five years prior to the fil- ing of the complaint is not barred by the statute of limitations provided that the bank alleges and proves a continuous state of default which includes defaults within five years of the filing of the complaint." THE SHAPE OF 2018—AND BEYOND Of course, the machinery of law never stops churning, so there are inevitably a number of cases still wending their way through the sys- tem that will have large impacts on the industry in 2018—and in the years to come. We asked our panel of experts to highlight legal rul- ings still tied up in the courts that will impact mortgage professionals in 2018, as well as any other hot topics that will likely come into play this year. Ulrich cited questions surrounding Official Form 113, the national form plan for Chapter 13 bankruptcies. Ulrich explained that the time in which all creditors have to file a proof of claim in a Chapter 13 case has been drastically reduced from roughly 150 days to 70 days after the filing of the case. "Furthermore," Ulrich said, "if a proof of claim is not timely filed, including claims for loans secured solely by the principal residence of the debtor, then the pro- visions of the Chapter 13 plan control—which upsets the way most bankruptcy court jurisdic- tions dealt with such claims, which was the claim controls over the plan provisions." For Sanda, it's a pair of decisions issued by Justice omas F. Whelan out of the Suffolk County Supreme Court in New York that are most "worth watching" in 2018: Nationstar Mortgage, LLC v. Donald MacPherson and Wilmington Savings Fund Society, FSB v. Ardith DeCanio. "ese trial court decisions have the potential to alter the landscape of the statute of limitations, providing that the terms of the mortgage determine when the maturity of a loan is accelerated, not the commencement of a foreclosure," Sanda said. "Specifically, where a mortgage permits a borrower to reinstate by tendering all missed payments and fees—a provision contained in the standard Fannie/Freddie form mortgage— Justice Whelan held the plaintiff lacks the legal means to accelerate a mortgage debt until a judgment of foreclosure issues," Sanda contin- ued. "is theory has been advanced in multiple jurisdictions across the country recently, most notably in Florida, and it will be interesting to see whether an appellate court addresses the issue in 2018. An appellate court's endorsement of Justice Whelan's view would be an enormous benefit to servicers in New York." Statute of limitations is often a thorny area, and Roy A. Diaz of SHD Legal Group, P.A. said that it will likely remain so in the state of Florida in 2018. "Based on the state of the law as of today, servicers are adjusting loans with SOL issues to redemand within a five-year de- fault period," Diaz said. "is is consistent with the majority of appellate rulings. Law related to challenges of standing has evolved to statewide recognition that a party who successfully chal- lenges a lender's standing to sue cannot claim entitlement to attorney fees under the non- enforceable note and mortgage." Sonia McDowell of Quintairos, Prieto,

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