Borrowing Statutes

Posted on December 13, 2007 by Jim Adams

Claims that cannot be filed anywhere else in the country, might be filed in Minnesota -- because of two laws.

      The first law is a 6 years' statute of limitations for negligence actions, as opposed to 2 years in Pennsylvania.    Minnesota also appears to have a 6 years' statute for contract actions, as opposed to Pennsylvania's 4 years' limit.     That information alone may not help much, because states have "borrowing statutes", which provide that a lawsuit which would be time-barred in the state where filed, if it would be barred in the state where the cause of action accrued -- unless one of the parties resides there.   This leads to the second

unusual law.   In Minnesota, there was no "borrowing statute" from 1978 until August 1, 2004.    If the cause of action accrued before August 1, 2004, it could be filed in Minnesota even though it would be barred in the states of residence of the parties and the state where the cause of action accrued.

      So, this leads to 2 questions.  

      1.         Is there a possible cause of action in contract or negligence which accrued between January 1, 2002, and August 1, 2004?

      2.         If the answer to #1 is "yes", then did a prospective defendant have sufficient contacts in Minnesota to justify suing them there?   Did they do business there? Have a registered agent?   Send in a salesperson?

      A contract claim that accrued in Pennsylvania during 2003 and which would be barred here and probably anywhere else in the country might still be available if filed in Minnesota.

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Avoid Home Equity Scams

Posted on December 6, 2007 by Scott Landis

The recent closing and bankruptcy of mortgage broker, OPFM, Inc. (a.k.a. Personal Financial Management, Image Masters, etc.), has left more than 800 homeowners in Central Pennsylvania with higher than expected mortgage balances and payments, and increasing fears that they might ultimately lose their homes.   

Scams to separate home-owners from their equity are not new.  The OPFM case is a little different than traditional equity theft schemes in that its plan was dependent upon attracting homeowners with excellent credit.  Many schemes, on the other hand, target homeowners who are facing foreclosure or other distress situations.  The basic method is the same, however, in that through promises to make mortgage payments on  a homeowner’s behalf, a scam artist is able to gain control over a home’s value and the homeowner is ultimately robbed of any value or equity the home may have had.  In order to avoid such equity theft scams, homeowners should take the following precautions:

1.    Make sure you know the identity of your actual lender and the actual terms of your mortgage.  Read all mortgage documents at your closing and retain copies for future reference.  Seek the advice of an attorney if you have any questions.  Two ways that you can verify who actually holds your mortgage are to run a free credit report and to check the records at your local recorder of deeds office.  Many recorder of deeds offices offer online access to these records.  Mortgages are routinely sold, and it is not unusual for your current lender to be different from the original, but you should receive some official notice if your mortgage is ever sold.

2.    Be extremely careful in entrusting a third party to make your mortgage payment.  Make sure such a person is properly bonded or insured.  Insist on periodic proof, in the form of official statements from your actual lender, that payments are being made and properly credited to your mortgage account.

3.    Be wary of programs or systems that seem overly complicated or unusually creative, or claims that seem to promise more than they can deliver.  There is much wisdom in the expressions “There is no free lunch” and “If it seems too good to be true, it probably is.”  Assume that there may be a catch when a broker, consultant or other party is offering substantially below-market interest rates, or is claiming that they can save your house from foreclosure. 

This story excerpted from the Barley Snyder November Business & Litigation newsletter.  For the full text of the newsletter click here.  The article can be found on page 2.

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