question for jlynn...re: repo help

Well that just makes no sense at all, but then, I don't have any direct experience with repos.

They have never tried to collect anything from you?

I would:
1. Check your state's repo laws - when you are sure they "didn't do it right", I would work from there.

2. Check your state's SOL laws for collection. Geez, I'm not sure if this is a written contract, or if repo collections have their own SOL, you will need to check on that.

I don't know that I would dispute it until you are armed with information. Because...you can wake them up and they start bothering you.

Others more knowledgable here will hopefully chime in.

 

And the necessary steps required in repossession.

ie - How much time do they give you to pick up the vehicle

How much notice of sell must they give,

etc. etc.

 

May I preface my remarks by stating I don't know much about repo's.

But yesterday I was perusing an article by a law professor who teaches us, at least as far as NJ is concerned, that there may be a difference in the SOL for collections, and the holders right to repossess the collateral that secures it. In other words secured loans, as in a car note, may have a different time set for SOL on collections and their right to repossess.

This article is about a real estate case but I think the important point is that it's a "secured" note, as opposed to "unsecured debt".



Here's that article:

http://dirt.umkc.edu/dd2001/DD01252001.htm


Daily Development for Thursday, January 25, 2001

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

MORTGAGES; FORECLOSURE; LIMITATIONS PERIOD: Although normal statute of limitations on debt will not terminate right to foreclose mortgage, New Jersey common law establishes a separate 20 year limitations period, measured from time that default occurred on mortgage debt.

Security National Partners, Ltd. v. Mahler, 763 A.2d 804 (N.J. Super. 2000)

Although the procedural detail in this case is somewhat complex, the facts boil down to this: the mortgagor failed to make a scheduled mortgage debt payment in March of 1989. The mortgagee brought a judicial foreclosure action, but, due to the fact that the ownership of the note passed through a number of hands during the early 90's (RTC's heyday), the action was not completed, and ultimately was dismissed without prejudice at the motion of the then note holder. In June, 1996, the current note holder commenced a judicial foreclosure proceeding, and the mortgagor raised as a defense the fact that the six year New Jersey statute of limitations had run on the debt.

The court ruled here that there is a distinction between the limitations period on a promissory note and the period applicable to the mortgage that secures it. Although the debt may be barred, the mortgage may still be foreclosed. [Or in this case the car may be repoed.]

There is no specific statute of limitations on foreclosure actions, but the court noted that New Jersey authorities have "borrowed" the twenty year statute of limitations on actions in ejectment (the adverse possession statute) as the measure of the time within which a foreclosure action can be brought.

Although the twenty year period derived from the adverse possession concept, the court here clarified that the normal set of adverse possession factors need not be present to bar the action the passage of twenty years from the date of first default on the note is enough.

Further, although a mortgage foreclosure is an equitable proceeding, and therefore may also be barred by laches, the court emphasizes that the equitable factors that might create a laches defense also are not necessary if the twenty years have run.

Comment: For an excellent extended discussion of these issues, see Nelson and Whitman, Real Estate Finance Law, Third Edition (West 1994) Section 6.11. Note that this section does not appear in the student oriented "hornbook edition" of this excellent treatise.

As Nelson and Whitman point out, the rule that the mortgage is not barred by the running of the statute on the debt is the common law rule in all title jurisdictions, which jurisdictions commonly use the statute of limitations on actions in ejectment as an independent limitations measure. Some even require that for the mortgagor to prevail there must have been acts amounting to disseizin.

It should be noted that laches constitutes a separate time related defense. In one Florida case, laches resulted in a barring of the foreclosure action even when there were seven years left to run under the twenty year statute of limitations. Ratner v. Miami Beach First National Bank, 368 So.2d 1326 (Fla. App. 1979).

There is less agreement in lien theory jurisdictions, although a slight majority of decided casesm including decisions in New York, Minnesota and Michigan, favor permitting the foreclosure to operate when the note has been barred. There is authority authorizing private foreclosure as well under such circumstances. Nelson and Whitman cite an ALR annotation and cases in Colorado and Kentucky for the minority view that the running of the statute on the note bars the action to foreclose as well.

Comment 2: There is some California authority, cited by Nelson & Whitman, that a deed of trust, conferring a separate equitable power upon the trustee, is also not subject to the running of the statute of limitations, even when a foreclosure lawsuit would be barred. The editor recalls that more recent California authority has departed from this rule, but perhaps California readers can substantiate this recollection.

Comment 3: There is also some authority holding that, even after both note and mortgage are time barred, the mortgagor cannot clear the title of the mortgage without tendering the amount of the debt. This is consistent with the notion that a time barred debt still exists. It is an obligation, just not an enforceable one, and equity will not reward those who fail to meet their obligations. An old fashioned notion, but not bad, hey?

Comment 4: Note that this problem is distinct from another problem, commonly addressed in state statutes, where a mortgage remains on the record long after it likely has been paid. In such cases, that mortgage is held unenforceable some substantial period of time after the last time for payment revealed in the mortgage document and, if no time for payment has been established in the document (sometimes the note is not recorded as an exhibit and the mortgage is otherwise silent) then the time runs from the recording of the mortgage. This type of statute was discussed in Vossen v. Parker, 609 N.W.2d 290 (Minn. Ct. App. 2000), the DIRT DD for August 24, 2000 (On the DIRT Website: http://cctr.umkc.edu/dept/dirt/)

...

This may not apply but it's worth lookin into.

 

Wow! So, basically, what you're saying is that they can't collect the money, but they can still take the collateral. I guess that's not the same as collecting.

 

No experience in repo's either and sure hope to keep it that way but, Why Chat has posted that auto repo SOL's are determined by the UCC. That once a auto is repo'ed the contract is gone and the deficiency is an unsecured debt. I found this in article 2. Prehaps it'll get you started in the right direction.

http://www.law.cornell.edu/ucc/2/2-725.html

 

Oh man is this the JLYNN web site now ......... LOL just thought I would get it in before Park does it " giggling as I type "

 

That's what the article appears to suggest. But do note it's a real estate case. I just think there's no distinction in a RE case and a repo because both issues are SECURED loans. It's the secured aspect that makes me wonder. In the UCC it's called "Chattel Paper" (I beleive) and may be treated differently.


I'm merely saying it MIGHT be an issue worth a closer look.