Attorneys Fees and Costs for Voluntary Discontinuance of Mortgage Foreclosure Action Under Loan Interest and Protection Law
Issue: Whether mortgagor is a “prevailing party” under the Loan Interest and Protection Law for purposes of recovering attorneys fees and costs, where mortgagee fails to give pre-foreclosure notices required under the law before initiating a mortgage foreclosure action, and then voluntarily discontinues the action.
Background: Loan Interest and Protection Law requires that mortgagee give notice to a residential homeowner that a delinquent mortgage is subject to foreclosure at some future date unless the owner takes some action, before initiating foreclosure action. 41 P.S. § 403. The Law also allows for attorneys fees and costs to be awarded to the prevailing party for actions arising under the Loan Interest and Protection Law. In this case, the mortgagee failed to provide the notice required under the Law before commencing its mortgage foreclosure action. After filing its mortgage foreclosure action, mortgagee moved for summary judgment, trial court denied motion, and mortgagee thereafter voluntarily discontinued mortgage foreclosure action. Mortgagor then sought attorneys fees and costs under the Loan Interest and Protection Law, claiming to be the prevailing party in an action arising under the Law. Trial court ruled, and Superior Court affirmed, that the mortgage foreclosure action arose under the Rules of Civil Procedure, not the Loan Interest and Protection Law, such that attorneys fees and costs were not recoverable.