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26 Formerly a Deputy Attorney General in charge of the Harrisburg office of the Pennsylvania Bureau of Consumer Protection, Stephen Hladik brings a broad range of experience to his mortgage foreclosure, bankruptcy, tax sale, and UDAP legal practice. A graduate of the Pennsylvania State University, Hladik obtained his law degree from Widener University, with honors, where he served as Internal Managing Editor of the Law Review. Hladik gained significant expertise in lending law enforcement while serving in the Pennsylvania Attorney General's Bureau of Consumer Protection, handling UDAP, FDCPA, RESPA, and TILA cases. Before joining Hladik, Onorato & Federman, LLP, Hladik was the Pennsylvania managing attorney for one of the nation's largest creditor's rights firms, practicing mortgage foreclosure and bankruptcy law. Hladik also serves the mortgage servicing industry by chairing the Government Affairs Committee of the Legal League 100. What have been the challenges for firms that had a focus on foreclosure law as the market has evolved? As the percentage of loans in default reaches lows that haven't been seen in years, it has been necessary for default law firms to evolve and adapt to the changing marketplace. Our firm has been very fortunate in that we handle a wide variety of legal matters related to the mortgage industry, including defense of servicers, lenders, and investors in legal matters brought by borrowers, as well as capabilities in regulatory matters and land development and zoning actions. In the future, law firms will have to have a more broad range of practice, from default to litigation, to regulatory and to other related areas. How do you think that market landscape is likely to change in 2018? In 2018, I expect that the percent of loans in default will continue to decrease, though the percentage will stabilize. While the number of loans in default and foreclosure may decrease, other areas will increase. I expect to see more regulatory actions brought by state agencies, including state attorneys general. While the Consumer Financial Protection Bureau (CFPB) may bring fewer actions, the state attorneys general will step into any perceived void and step up legal enforcement actions. I also expect to see more contested foreclosures and a higher number of actions brought by borrowers. Firms that are poised to handle complex contested work, as well as defense work, will do well. As we go forward into 2019 and 2020, I estimate that an uptick in loan defaults will begin. Interest rates will be rising, and borrowers will begin looking once again for more exotic lending products, which may lead ultimately to an increase in defaults down the road. What are some of the other major challenges your firm is looking to address in this year? Our complex litigation has been growing quickly, and we are expanding our litigation department. Seasoned trial attorneys will be part of our firm's growth plan. Our defense practice will be able to handle all areas that impact the mortgage industry, including FDCPA, TILA, UDAP defense, insurance claims, property preservation matters, regulatory actions, and licensing issues. Our firm will be looking to expand our geographic footprint, including expansion in New Jersey, Arizona, and elsewhere. As for other challenges, there is the neverending burden of keeping up with changing technology and increasing audit obligations. "There are always Fair Debt issues that arise every year, and 2018 will be no exception. Nationwide, cases will continue to refine the issues of standing, statutes of limitations, and enforcement of lost notes." COUNSEL'S CORNER LEARNING LESSONS FROM DIVERSE COURT CASES STEPHEN M. HLADIK, ESQUIRE Partner, Hladik, Onorato & Federman, LLP