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ALFRED J. LAZAR and : IN THE COURT OF COMMON PLEAS OF
MARIA DELANEY LAZAR, : CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
NO. 99 - X5/5 CIVIL
v.
CIVIL ACTION - LAW
FIRST UNION NATIONAL BANK,
Defendant
NOTICE
You have been sued in court. If you wish to defend against the claims set forth in the
following pages, you must take action within twenty (20) days after this complaint and notice are
served, by entering a written appearance personally or by attorney and filing in writing with the
court your defenses or objections to the claims set forth against you. You are warned that if you
fail to do so the case may proceed without you and a judgment may be entered against you by the
court without further notice for any money claimed in the complaint or for any other claim or
relief requested by the plaintiff. You may lose money or property or other rights important to
you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU
DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE
THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL
HELP.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, PA 17013
(717) 249-3166
ALFRED J. LAZAR and
MARIA DELANEY LAZAR,
Plaintiff
V.
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
NO. 99 CIVIL
CIVIL ACTION - LAW
FIRST UNION NATIONAL BANK,
Defendant : Amount Sought Does Not Exceed Jurisdictional
Limit For Compulsory Arbitration
COMPLAINT
COUNT I - ACTION FOR DECLARATORY JUDGMENT
Plaintiffs are Alfred J. Lazar and Maria Delaney Lazar ("Lazars"), adult individuals and
husband and wife residing at 455 St. John's Drive, Camp Hill, PA 17011.
Defendant is First Union National Bank, ("First Union") a bank organized under the
banking laws of the United Sta-es of America and having an office located at 604 East High
Street, Carlisle, PA 17013.
3
On or about February 10, 1989, Lazars granted a mortgage ("Mortgage") on the Lazars'
aforementioned residence to Liberty State Bank ("Liberty"), P.O. Box 327, 50 West Third Street,
Mount Carmel, PA 17851, to secure an adjustable rate note in the amount of $170,000.00
("Note"). A copy of the Mortgage with an accompanying Adjustable Rate Loan Rider ("Rider")
is attached hereto and marked as Exhibit "A". A copy of the Note is attached hereto and marked
as Exhibit "B".
First Union is the successor in interest to Liberty on the Note and Mortgage. Upon
information and belief, First Union Mortgage Corporation is a wholly-owned subsidiary of First
Union and is the servicing agent for the aforesaid loan.
Liberty was the drafter of all documents which memorialized the understandings, terms,
conditions, covenants, promises and agreements between the Lazars and Liberty.
6
Lazars and Liberty negotiated the aforesaid loan to bear an initial interest rate ("Initial
Rate") of 9.5%, a yearly interest rate change of no more than 1% per year, and a lifetime cap of
14.5%. The foregoing rate changes to be governed by variances in an "index" interest rate
("Index") from the index rate at the inception of the loan.
7
When the said loan was negotiated, the Lazars and Liberty established no minimum rate
under which the interest rate for the loan could fall below. In another words, while the Lazars and
Liberty envisioned a lifetime cap of 14.5% for the interest rate on the loan, the Lazars and Liberty
established no such minimum "floor" for the interest rate.
When Liberty drafted the aforementioned documents, Liberty committed an error in the
transcription of the agreement between the Lazars and Liberty by improperly entering the Initial
Rate of 9.5% as a minimum interest rate at two places in the aforementioned documents,
specifically, in the Rider and the Note.
9
When the said documents were executed, neither the Lazars nor Liberty realized that such
a mistake had been made in the transcription of the agreement.
10
Consistent with the understanding of the Lazars and Liberty, Liberty provided an
Adjustable Rate Mortgage Program Disclosure ("Disclosure") to the Lazars which clearly
establishes a 1% annual cap and floor on interest rate changes and a 5% lifetime cap on the
interest rate, but fails to establish any lifetime "floor" on the interest rate. A copy of the
Disclosure is attached hereto and marked as Exhibit "C".
In 1990, the interest rate was increased to 9.875%; in 1991, the Interest Rate decreased to
9.750%; and in 1992, the interest rate decreased to 9.5%. All changes in the interest rate were
concomitant to changes in the Index.
12
In 1993, while the Index variance was a decrease of 1.25%, the interest rate was
decreased I% to 8.5%, which, again, was consistent with the understanding of the Lazars and
Liberty relative to the 1 % annual cap and floor on rate changes.
13
In 1994, the interest rate was decreased to 7.5%; in 1995, the interest rate was decreased
to 7.375%; and in 1996, the interest rate was increased to 7.875%. These said changes in the
interest rate were concomitant with variations in the Index.
r.
14
The foregoing changes in the interest rate occurred while the loan was being serviced by
Liberty and its successors in interest, Commonwealth Bank ("Commonwealth"), and Meridian
Bank ("Meridian"). Copies of notices of the aforesaid changes to the interest rate from Liberty,
Commonwealth, and Meridian are attached hereto and marked as Exhibit "D".
15
Sometime after February 23, 1996, Meridian was acquired by CoreStates Bank
(CoreStates"), which became the successor in interest to Liberty on the said loan with the Lazars.
16
On June 11, 1997, CoreStates notified the Lazars that interest rate was subject to a floor
of 9.5%, and that the interest rate would increase a maximum of 1% per year until the "floor" rate
of 9.5% was reached. CoreStates set the interest rate at 8.875% in 1997 and at 9.5% in 1998.
17
Sometime in 1998, First Union became the successor in interest to CoreStates and the
successor in interest to Liberty for the said loan, and First Union has maintained the a minimum
9.5% interest rate on the loan and contrary to the agreement of the Lazars and Liberty.
18
Despite repeated requests and protests by the Lazars, neither CoreStates nor First Union
would abide by the terms of the agreement of the Lazars and Liberty.
WHEREFORE, Plaintiffs seek a declaratory judgment in the nature of a determination
by this Court that the interest rate of the said note was not subject to a minimum of 9.5%, but that
the interest rate was to be subject to adjustment concomitant to changes to the Index Rate with no
minimum lifetime floor; further, Plaintiffs seek reimbursement for amounts paid in excess of that
which Plaintiffs should have paid pursuant to the aforesaid equation and which will be proven at
trial; Plaintiffs seek reimbursement for the attorneys fees Plaintiffs have incurred in pursuit of
this litigation and which will be proven at trial; finally, Plaintiffs seek any other relief that this
Honorable Court deems equitable and just.
COUNT II - BREACH OF CONTRACT
19
Paragraphs 1 through 18 are incorporated herein by reference as though textually set forth
at length.
20
The conduct of First Union in its dealing with the Lazars was obdurate and vexatious.
WHEREFORE, Plaintiffs seek damages in the amount of interest paid in excess of that
which Plaintiffs should have paid pursuant to the aforementioned equation and which will be
proven at trial; Plaintiffs seek reimbursement for the attorneys fees Plaintiffs have incurred in
pursuit of this litigation and which will be proven at trial; finally, Plaintiffs seek any other relief
that this Honorable Court deems equitable and just.
VERIFICATION
I verify that the statements made in the foregoing document are true and correct to the
best of my knowledge, information, and belief. I understand that false statements herein are made
subject to the penalties of 18 Pa.C.'.S. Section 4904 relating to unworn falsification to authorities.
/4qq
;',,,?,r -P
Date -T_
fred Date
Maria Delaney Laza '
Respectfully Submitted:
Date Hubert X. Gilroy/aintiffs)
-Esquire
Supreme Court I.for: Broujos & G(Attorney for the 4 North Hanover Street
Carlisle, PA 17013
(717)243-4574
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MORTGAGE I' ,FA p,:.nmUsti, I; nl •1 Jcaaepopp.
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THISMORTGAGE (''Security Instrument") is given on........... F.cbrnary..1.0 ................... .................... :........
:..
19.89..... The mortgagor is...... ALFRED-)..... LAZAR..and..NAR.IA,.DELANEY..LAUR.,...his..wife ............::...:.:........L.
............................. .............................."'." ("Borrower"). This Security instrument is given to.Libarty...State....
........................ ............... ............... ................. ..................................................................... which is organized and existing
underthe laws of „cne,p?ace„q, KF!!T` svanye.................. and whose addressis ::.:...........
.............................. .
....................................... L18FItIY..SUITE:9UNK.P...(L.floz.37)„Sa1es1.IDlrtl.Sbeet•Mount.ramlu,.Ft.llgShN17......... ("Lender").
Borrower owes Lender the principal sum or..... ANE...IIUNDREB..S.E9ENTY.cTHAUSAND..ANA.:.NO./.1AU--.a-r..carcnr..-..
-'-"----"'--":.".7..... .'.:.-Dollars (U.S. 5..170 a000.,00......... . This debt is evidenced by Borrower's note
dated the same date as this Security Instrument ("Note"), which provides for monthly payments, with the full debt, If not
paid earlier, due and payable on .............. February ...10.,.20AR................................................... This Security Instrument
secures to Lender: (a) the repayment of the debt evidenced by the Note, with interest, and all renewals, extensions and
modifications; (b) the payment of all other sums, with interest, advanced under paragraph 7 to protect the security or this
Security I nstrument; and (c) the performance of Borrower's covenants and agreements under this Security Instrument and
the Note. For this purpose, Borrower does hereby mortgage, grant and convey to Lender the following described property
located in ............. C.umb.erl.anQ....................................................................................................... County, Pennsylvania:
ALL THAT CERTAIN lot or tract of land situate in the Township of,Hampden,` County of
Cumberland and State of Pennsylvania, more particularly bounded, and, described as
follows, to wit: I?•r.:.. • ..,..
BEGINNING at a point on the eastern line of St. John's Drive at the southern line of Lot No
55 as shown on the Plan of Section 3-A Point Ridge Farms; thence along said southern
line of Lot No. 55 North 68 degrees 34 minutes East 162.18 feet to a point; thence alon
the western line of Lot No. 63 as shown on the Revised Plan of Section 3, Point Ridge
Farms, South 29 degrees 27 minutes East 90.05 feet to a point; thence along the norther
line of Lot No. 57 as shown on Plan of Section 3-A, Point Ridge Farms, South 62 degrees
13 minutes West 171.93 feet to the eastern line of St. Johns Drive; thence along the
eastern line of St. John's Drive in a northerly direction on a curve to the right havin
a radius of 567.72 feet, an arc distance of 108.43 feet to a point the place of
BEGINNING.
BEING Lot No. 56 as shown on Plan of Section 3-A, Point Ridge Farms, said Plan being
recorded in the Cumberland County Recorder's Office in Plan Book 17, page 31.
HAVING thereon erected a dwelling known and numbered as 455 St. John's Drive.
EXHIBIT
ISAaa
which has the addresser ....... ..45.5..SA.t...J.ah.n.`.S...OF.LY.e .................................... ........ Gamp..N.ill..................................
Isured Icily]
Pennsylvania ..... ...... ................._.._._,• ("Property Address');
Ira
170...11 . .....im Cadq
TOGETHER WITH all the improvements anw or he-fer erectsd oil the property, and all easements, rights,
appurtenances, rents, royalties, mineral, oil and gas rights and profits, water rights and stock and all fixtures now or
hereafter a part ortbe property. All replacements and additions shall also be covered by this Security Instrument. All of the
foregoing is referred to in this Security Instrumeut as the "Property."
BORROWER COVENANTS that Burrower is lawfully seised of the estate hereby conveyed and has the right to
mortgage, grant and convey the Properly and that the Property is unencumbered, except for encumbrances of record.
Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any
encumbrances of record.
Tim SEaIRITa' INSTRUMENT combines uniform covenants for national use and nonuniform covenants with
limited variations by jurisdic uon m constitute a uniform security instrument covering real property.
PENNSYLVANIA-s,„xIe F.nmlr-FNMA/FNLMC UNIFORM INSTRUMENT BANCONSUMER FORM PA M 303912/83
UNIPOans COVENA NI S. Ilorrower and Lender covenant and agree as follows:.,
I. payment of Principal and Interest; Prepayment and Late Chuges. Borrower shall promptly pay when due
II¢ principal of and in leresl on I he debt evidenced by the Note and any prepayment and late charges due under The Note.
2, Fundsfnr'I'axesandln,uance. Suhjcer to apPlTcabic law or to a written waiver by Leader. Borrower shall pay
to Lender on Ilse day monthly payments are due under the Note, until the Note is paid in full, a sum ("Funds") equal to
le ne-twelflh oL (a) yearly Iaxef and assessments which may attain priority over this Security Instrument; (b) yearly
asehold payments or ground rents nn the Property, if any (c) yearly hazard insurance premiums; and (d) yearly
mortgage insurance premiums, if any. These items are called "escrow items." Lender may estimate the Funds due on the
basis of current data and reasonable estimates of future escrow items.
The Funds shall be held in An institution the deposits or accounts of which are insured or guaranteed by a federal or
slate agency (including Lender IF Lender is such an institution). Lender shall apply the Funds to pay the escrow items.
Lender may not charge for molding and applying the Funds, analyzing t account or verifying the escrow items, unless
Lender pays Borrower interest on the Funds and applicable law permitsheLender to make such a charge. Borrower and
Lender may agree in writing that interest shall be paid on the Funds. Unless an agreement is made or applicable law
requires interest to be paid, Lender shall not be rrouired to pay Borrower any interest or earnings on the Funds. Lender
shall give to Borrower, without charge, nn annual accounting of the Funds showing credits and debits to the Funds and the
purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the sums secured by
this Security Instrument.
If the amount of the Funds held by Lender, together with the future monthly payments of Funds payable prior to
the due dales of the escrow items, shall exceed the amount required to pay the escrow items when due, the excess shall be,
at Borrowers option, either promptly repaid to Borrower or credited to Borrower on monthly payments of Funds. If the
amount of the Funds held by Lrnder is not sullicicnt in, pay fhe escrow items when due, Borrower shall pay to Lender any
ntnount necessary hi make op the deficiency in one or more payments As required by Lender.
Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower
any Funds held by Lender. If under paragraph 19 The Properly is sold or acquired by Lender, Lender shall apply, no later
than immediately prior to file sale of ilm Property or its acquisition by Lender, any Funds held by Lender at the time of
application as a credit against the sinus scoured by this Security Instrument.
0, Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under
paragraphs I and 2 shall be applied: first. to late charges due under the Note; second, to prepayment charges due under the
Note; third, toamounts payable underparagraph 2; fourth, to interesldue; and last, toprincipaidue. • "
4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the
Properly which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any.
Borrower shall pay these obligations in the manner provided in paragraph 2, or if not paid in that manner, Borrower shall
pay them on lime directly to the person owed payment. Borrower shall promptly furnish to Lender all notices of amounts
to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to Lender
receipts evidencing the payments.
Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a)
agrees in writing to Ilse payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good
faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to
prevent the enforcement of the lien or forfeiture of any part of the Property; or (e) secures from the holder of the lien an
agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of
the Property is subject to a lien which may attain priority over this Security Instrument, Lender may give Borrower a
notice identifying the lien. Borrower shall satisfy the lien or takeone or more ofthe actions set forth above within 10days
of the giving of notice.
S. Hazard Insurance. Rnrrower shall keep the improvements now existing or hereafter erected on the Property
insured against loss by fire, hazards included within the term "extended coverage" and any other hazards for which Lender
requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The
insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be
unreasonably willslield.
All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause.
Lender shall have the right to hold the policies and renewals. If Lender requires, Borrower shall promptly give to Lender
all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance
carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.
Unless Lender and Burrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair
of the Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the
restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be
applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. If
Borrower abandons the Property, m does not answer within JO days a notice from Lender that the insurance carrier has
offered to settle a claim, then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore
the Property or to pay sums secured by this Security Instrument, whether or not then due. The 30-day period will begin
when the notice is given.
Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal shall not extend or
postpone the due date of the monthly payments referred to in paragraphs I and 2 or change the amount of the payments. If
under paragraph 19 the Property is acquired by Lender. Borrower's right to any insurance policies and proceeds resulting
from damage to the Property prior to the ncqunition slull pass to Lender to the extent ofthe sums secured by this Security
Instrument immediately prior to the acquisition.
6. Preservation and Rfaintenance of Property; Leaseholds. Borrower shall not destroy, damage or substantially
change the Properly, allow the Property to deteriorate or commit waste. If this Security instrument is on a leasehold,
Borrower Shall comply with the provisions of t lm lease. and if Borrower acquires fee title to the Property, the leasehold and
fee title shall not merge unless Lender agrees to the merger in writing.
7. Prolectinn of Lender's Rights in the Properly; Mortgage Insurance. If Borrower fails to perform the
cnvemmnts and agreenrems cool aired in this Secumv instnomcnr, or there is a legal proceeding that may significantly Affect
Lender's rights in the 1'roperly (such as a proceeding in hankruptcy, probate, for eonndennation or to enforce laws u
regulations), ihcu Lender may do and pay for wlmtever is necessary to protect the value of the Property and Lender's rights
in the Property. Lender's actions may include paying any sums secured by a lien which has priority over this Security
Instrument, appearing in court, paying reasmmble attorneys fees and entering on the Properly to make repairs. Although
Lender may lake action under i his paragraph 7. Lender does not have to do so.
Any aniounlx disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this
Security Inssrun¢nl. Unless Ilorrower mid Lender agree to other terms of payment, these amounts shall bear interest from
the dale of disbursement at the Note rate and shall be payable, wiih interest. upon notice front Lender to Borrower
requesting payment.
ADJUSTABLE RATE LOAN RIDER
NOTICE: TIIE SECUIt I'IY INS'I'It UMENI' SEC UIt ES A NOTE WII I('II CONTAINS
A PROVISION ALLOWING FOR CHANGES IN THE INTEREST RATE. IN.
CREASES IN THE INTEREST RATE: WILL RESULT IN HIGHER PAYMENTS.
DECREASES IN THE INTEREST RATE WILL RESULT IN LONER PAYMENTS.
This Rider is made this.,; 30th dayof February 1y BP.•, and is incorporated into and shall be
deemed to amend and supplement the Mortgage, Deed of Trust, or Deed to Secure Debt (the"Security Instrument') or the
same date given by the undersigned (the "Borrower') to secure Borrower's Note to ...............................
DBFAIY STATE BANK P. o. Bos 327, 50 Wat iAlyd Stnet, Nauni Gmtilt la. 17851-0327
(the "Lender' of the same date flhe "Note) and covering the propertyl described in the Security Instrument and
located at... St. John il g the iver. Camp, Kit 1r,PA 17Q}},
........................................
ProperlyAddress
Modifications. In addition to the covenants and agreements made in the Security instrument, 6orroweeand Lender
further covenant and agree as follows:
A. INTEREST RATE AND MONTHLY PAYMENT CHANGES
The Note has an "Initial Interest Rate"of . 9..5 ..... %. The Note interest rate maybe increased'or decreased on the
... JAtb.. day of the month beginning on ... March. ................ 199o • • • , and on that day of the month every
...12.... months thereafter.
Changes in the interest rate are governed by changes in an interest rate index called the "Index."The Inden is the:
(Cheek one box to Mofl,a,, l,du.)
(1) ®a "Contract lntereit Rate, Purchase of Previously Occupied Homes, National Average for all Major Types of
Lenders" 0-1 lished by the Federal Home Loan Bank Board.
(2) .........
ICArrk Mra /arrbox dlrmlim.hrr onum 11m11 on I Im ntitnanand/alim/uon rAefnrrrrsrrareunderrhr Norr.
{Ino dos It lhftk herkrd, rArrr wiflllb, br. no marimu. limt,b.,l onrhan,.nr.. rndno lim/u on th, Ar locator rare)
(1) ? There is no maximum limit on changes in the interest rate at any Change Date.
(2) J.2 The interest rile cdnnot be changed by more than ... ono .. percentage points at any-Change Date.
The interest rate will never be more than __!14Z_* S. a.... percentage
Iw than 9.5 96, f
If the interest rate changes, the amount of Borrower's monthly payments will change as provided in the Note. Increases
in the interest rate will result in higher payments. Decreases in the interest rate will result in lower payments.
B. LOAN CHARGES
It could be that the, loan secured by the Security Instrument is subject to a law which sets maximum loan bharges and
that law is interpreted so that the interest or other loan charges collected or to be colieclid in connection with the loan would
exceed permitted limits: if this is the case, then: (A) any such loan charge shall be reduced by the amount necessary to reduce
the charge to the permitted limit: and (B) any sums already collected from Borrower which exceeded permitted limits will be
refunded to Borrower: Lender may choose to make this refund by reducing the principal owed under the Note or by making
a direct payment to Borrower.
C. PRIOR LIENS
if Lender determines that all or any part of the sums secured by this Security Instrument are subject to a lien which has
priority over this Security Instrument, Lender may send Borrower a notice identifying that lien. Borrower shall promptly
act with regard to that lien as provided in paragraph 4 of the Security Instrument or shall promptly secure an agreement in a
form satisfactory to Lender subordinating that lien to this Security Instrument.
D. TRANSFER OF THE PROPERTY
If there is a transfer of the Properly subject to paragraph 17 of the Security Instrument, Lender may require (1) an
increase in the current Note interest rate, or (2) an increase in (or removal of) the limit on the amount of any one interest rate
change or there is a limit), or (7) a change in the Base Index figure, or all of these, as a condition of Lenders waiving the
option to accelerate provided in paragraph 17.
By signing this, Borrower agrees to all of the above. /f
...... ./vA .CTS, 4ic ........... Borrower
?...... (Seal)
KARIA DELANEY LA R -Borrower
• //more than vnr Aor it rhrrkrd or iJna bo, it rhrrkrd. and lindn and 8orro"rr do nor orho"br apn in "ririnx, rhrJinr Jndrx nomrd "lllapplp.
NEW JERSEY AND PENNSVLVANIA
0?1.10. us Wf 1"',
not less than 3o days from the date tile notice is delivered or mailed within which Borrower
$ecurily lnslrumenl.l( Dnrrnwrr Oils i,. must pay all
this sums secured by
If tender rerplurd nun l an Ile lams kinrr A4 a rnuaition of making the loan aeeured by this'Secudly Instrument
Ilunuwer vhnll pay the prnu11nlt rr,pmord m nfeu,,aln the umleance In effect until such time as the requirement for the
inuuance Innuumts n, amndan.r wIIh Ilouo,vvt %And Lender', written ngraement or applicable law.
A. Inspeclinn. Lender ,, w xa,." nfny r„nkr twantalde entries upon and inspections of the Property. Lender
,hall give Ilurrnwr ov ,, m I h, little .I of InuA Ilk Alf .... rectiun gfenrying reasmosble came for the inspeelion.
9. Condenmallm,. I he pr". rr,h W levy nwod for Cliff,,, fur donages, direct or consequential, in connection with
any condenmalit n m other lak fog riff nnv 11;111 of life 15opely. Cot for conveyance in lieu of condemnation, are hereby
Assigned oust shall he pool m Lender.
In file event ,,f a solid taking of the Ihnperly, the proceeds shell be applied to the sums secured by this Security
I11uruanen4 whether it not Then due, will, Any rxceu paid In Borrower. In the event of to partial taking of the Properly,
unless Ilnnnwer and Lender olherwtte agree In %filing. the omit secured by this Security Instrument shall be reduced by
the nnmmu or the ,,......it mulllphed by file fullnwufg fracrn,n. (a) file must amount of the sums secured immediately
before the Inking, divided 1y (Ill live Inu m;nkrt value of life Properly immediately before the Inking. Any balance shall be
pod to Iinrmover
If life Properly is abandoned by Borrower, or if, after notice by Lender to Borrower that the condemnor others to
matte nn nwlvd or 4,111, n clAton for dnnf Ages, Ilan,wer fads In re,penul to Lender within 30 days after the date the notice is
give,,, Lender r4 narh,"fed nI colIeof o,d;q.ply the pmceestt, At 11% oplon, either to restoration or repair of the Property or
la [lie tons% trcured by lLN Security Inttiumem, wlrttlief tit nol then due.
Unless Lender nod Ilnrurwm ulher wrte sure in wining, tiny application ofproceeds to principal shall not exce or
pompon( file duc dntr,f life ,,nnfifty pn ymm,l, rt eited In in paragraphs I and 2 or change the amount ofsueh payments.
Id, Murnwrr Not Ilrlrntrd; fnrhrxraurc By I.rnder Nnl a Waiver. Extension of the time for payment or
modification of anmrlirxll,n of file unn ttcmed by fill, Security Instrument granted by Loader to any successor in
intereu of Ilarrnwer shall foul operate lo mina, the Ilnlnhly of the original Borrower or Borrower's successors in interest.
Lender shall nm be required In cornnvnce prrweedings againU any successor in interest or refuse to extend time foe
paymenl or w herwiie(noddy anrnr l ,ulum u( I lie mint vectored by this Security Instrument by reason crafty demand made
by( icoriginal Borrower m Ilarnvwer'a auctnum In Infereo. Any forbearance by Lender in exercising any right or remedy
shall not he a waiver of or preclude I he exerche of any right or remedy.
11, Su<enmr, and Aatlgn% Iloundl Inlnl and Several Liability; Co-signers. The covenants and agreements of
I hit Security Intn,,toa,l shall hind and heuenl the ulecemmr%ofd cosigns of Lender and Borrower, subject to the provisions
orparagraph 17. Ilorrower', covenant, kind ngreemtnn shall bejoint and several. Any Borrower whoco-signs this Security
Illmriullenl but duet nul execute the Nuic. (n) I% co-signing this Security Instrument only to mortgage, grant and convey
Ihm Ilorrower'% inlertsl in the Properl y under the team of this Security Instrument; (b) is not personally obligated to pay
lite soon secured by il,n Security Iauriuf,enl And (c) Agrees Ihnt Lender and any other Borrower may agree to extend,
nmabfy, fmhenr fir make any acemmiuALafimn with regard to the terms or this Security Instrument or the Note without
that I1nrrowrr'4 cnntuu
17. Loan Chasgrs. If (tie lum, wulml for fbn Security In,tiunient is subject to a law which acts maximum loan
charger, And that law I% finally tnlerpreted it, that the interest or other loan charges collected or to be collected in
nnnfecmm with life Islas, ev, •,d file petnfnted hhnut, file,,: (a) tiny such loan charge shall be reduced by the amount
urer,tury Ile reduce live charge ar life pcrinmef11111111; flood (h) ally sum%already collected from Borrower which exceeded
peranllled Iu,u1, lull hr ahunlyd I'. Itan uwef. Lender may clufose to ,take this refund by reducing the principal owed
under the Note or by making A dnrcl payulenl In llntrnwer. Its refund reduces principal, the reduction will be treated as a
partial prep"ynreul wihout ally prepayment choge under life Note
13. I rgldafion Affrtthfg Lo,"de", (lights. If enaclmenl or expiration of applicable laws has the effect of
muds mg ally purv.,lon of the Not, ur Ih.%S..Amy Iumnmnd unenfnreeable according to its terms, Lender, al its optima,
,stay requur huuurdsm, pity ...out In full of all man sectued try thm Security Instrument and may invoke any remedies
pernmled by paragraph 19 It Leudrr, exercise, [hit option, Lender shall take the steps specified in the second paragraph of
purngraph 17.
14. Noficn. Ar,y nuicew llonuwtrproudedfor in this Securily Instrument shall be given by delivering it or by
matl,ng 11 by Bru rhea nfall uule%% apphcahlc law requires use of another method. The notice shall be directed to the
Property Addle,, ,, awry miler addre%% Iluu,wer de,guute, by notice to Lender. Any notice to Lender shall be given by
nru asst mall to L,nder'suddl vt,Imes heitin ar any,liver address Lender designates by notice to Borrower. Any notice
(nnv Ned for In I lm Security Imo um evil hall he deemed Io fiat c been given to Borrower or Lender when given as provided
nn ihn paragraph
15, Governing 1.6a; Severahlllty, 'rho Security Instrument shall be governed by federal law and the law of the
junuhrbml 1.1 w11feh the I'mpeny is Imcroted. In the event that any provision or clause of this Security Instrument or the
Nile "inflict, ,111, apphenble Inw, ,fell cnnOhcl shall s,,1 nffect other provisions of this Security Instrument or the Note
w 111,1 Can he ge, en ,flea wnhont the cunllfclmg provluun. To this end Idle provisions or this Security Instrument and the
Nut, hoe drrlord In lie,nrfuhle
Ia. Iinrrower's ('lips. Ilurrnwr, shall be given are conformed copy of the Note and of this Security Instrument.
17. '1'rart of the Property or a Ilenelidal Interest In Borrower. If all or any part of the Property or any
u l ercu m ,, 1%,r,Id or l mnderrrd (fir f f a hr•nclioal inmrcm in Borrower is sold or transferred and Borrower is not a natural
prnon) w,,hout I ndvi'%prior %mlen content, Lender n,ay, at its option, require immediate payment in full of all sums
Itcmrd by Iles, Secuf ly Inuri11nenl I Illot , this fgnion shall not be exercised by Lender if cxcrcise is prohibited by
federal Ia%a, of Ihedale of thft Security Instrument.
If I endrr, exrrn,e, 1614 Column, Lcnder shall give Borrower notice ofacceleration. The notice shall provide a period
"I 'm le„ thou l0 day, fro,,, the dx1e 1l,, uoua i%delivered or mailed within which Borrower must pay all sums secured by
I hn Sean. ry lhfufnrnem Ifllnnmwel frulsfirp,all;eve onn%fai,r lot the expiration of this period, Lender may invoke any
frmedfr,pennnlvdby Ihn Srcwlq I %trummut without further notice or demand on Borrower.
IN. Ilorrower'% Bight u, BcilistMe. If Ilnnnwer meets certain conditions, Borrower shall have the right to have
enhucrnfrnl of Ihn Security info rum ens dfuo ltinued At ally lime prior to the earlier of, (a) 5 days (or such other period as
npphcahlr Inw may %prcd) fill son+t:u nnunl hd,re,ele of the Properly pursuant to any power of gale contained in this
Srru"ty I„Ifm,rut, for (h) entry of a;udghnenl cfhfarcing this Security Instrument. Those conditions are that Borrower:
dal Pal% Lendel ell Stills 111101 then would be due under this Security Instrument and the Nom had no acceleration
r.hnnl. 00 Corr, Any deLodl 'If any mll,cr n,enalns or agmement%; (c) pays all expenses incurred in enforcing this
1c. unh% Iom.nforPit. u,. Indmg, but folio limed m, aa%onablc attorneys fees; and (d) takes such action as Lender may
t r;uounhh o,,]I to attain- I I " I Iho II or if of Ihi% Seesvtty In%I rumens, Lender's rights in the Properly and Borrower's
uld.gal.. I It, 1,,.1 16,• ,,,n, a'. ecru by Ilut Security ImIrumem shall continue unchanged Upton reinstatement by
Ilm nnv rr, I I,, Scn, fly tutu,, 111, 1, 1 ,u,ul I I I e obligallook % secured hereby shall remain fully effective as if no acceleration had
of, mre.I Ih.wnrt, Ihf,"fill Is r r• it v l.m a shall nut apply tin l he case ofaccelemt ion under paragraphs 13 or 17.
NON-UNIFORM COVENANTS. Borrower and Lender run her covenant and agree asrollows:
19. Acceleration; Remedies. Lender shall give notice to narrower prior to acceleration following Borrower's
breach of any covenant or agreement In Ihis Security Instrument (but not prior to acceleration under paragraphs 13 and 17
unless applicable law provides otherwise). Lender shall notify Borrower of, among other things: (a) the default; (b) the
action required to cure the default; (U when the default must be cured; and (d) that failure to cure the default as specified
may result In acceleration of the sums secured by this Security Instrument, foreclosure byjudlcial proceeding and sale of
the Property. Lender short further Inform Harrower of the right to reinstate after acceleration and the right to assert in the
farechmure proceeding the non-existence of a default or any other defense or Borrower to acceleration and foreclosure. Ir
the default is not cured as specifitd, Lender at its option may require immediate payment In full ofall sums secured by this
Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender
shall be entitled to collect all expenses Incurred in pursuing the remedies provided in this paragraph 19, including, but not
limited to, attorneys' fees and costs of title evidence to the extent permitted by applicable law.
20, render in Possession. Upon acceleration under paragraph 19 or abandonment of the Property, Lender (in
person, by agent or by judicially Appointed receiver) shall be entitled to enter upon, lake possession of and manage the
Property and to collect the rents or the Property including those past due. Any rents collected by Lender or the receiver
shall be applied first to payment of the costs of management of the Property and collection of rents, including, but not
limited lo, receiver's fees, premiums on receiver's bonds and reasonable attorneys' fen, and then to the sums secured by
this Security Instrument.
21. Release. Upon payment of all sums secured by this Security Instrument, Lender shall discharge this Security
Instrument without charge to Borrower. Borrower shall pay any recordation costs.
22. Reinstatement Period. Borrower's time to reinstate provided in paragraph IS shall extend to one hour prior to
the commencement of bidding at a sheriffs sale or other sale pursuant to this Security Instrument.
23. Purchase Money mortgage. tf any of the debt secured by this Security Instrument is lent to Borrower to acquire
title to the Property, this Security Instrument shall be a purchase money mortgage.
24. Interest Rate After Judgment. Borrower agrees that the interest rate payable after a judgment is entered on the
Note or in an action of mortgage foreclosure shall be the rate payable from time to time under the Note.
25. Riders to this Security instrument. tfone or more riders are executed by Borrower and recorded together with
this Security Instrument, the covenants and agreements of each such rider shall be incorporated into and shall amend and
supplement the covenants and agreements of this Security Instrument as if the rider(s) were a part of this Security
Instrument. (Check applicable box(es))
0 Adjustable Rate Rider ? Condominium Rider ? 2-4 Family Rider
? Graduated Payment Rider ? Planned Unit Development Rider
? Other(s) [specify) " • -
BY SIGNING BELOW, Borrower accepts and agrees to the lesions and covenants contained in this Security
Instrument and in any rider(s) executed by Borrower and recorded with it.
Witnasn: ..?.../.?.{C..-t.../../..kSs-zL,64"1'R...... .... AI.FR LAZAR...... V .................._....(Sal)
V
................ ...................................... ................................ (Seel)
MARIA D LANEY AZAR
OMMONWEALTH OF PENNSYLVANIA, Cumberland County as:
the loth day of February
On this 19 89
befo
e
, ,
r
me,
Elizabeth Horan Meadows the undersigned officer, personally appeared
Alfred J. Lazar and Maria Delaney Lazar. his 'f known to me (or satisfactorily proven)
be the person s whose name s are subscribed t o the within instrument and acknowledged that
executed th'e'SBmcfor'the')lUrposes'herein ['od(mneil: :hw.•" 7 •tr.' ,r )1,gyb?,ii!
IN WITNESS WHEREOF, 1 hereunto set my hand and official seal.
y Commission expires: '
NOTARIAL SEAL
ELIZABETH HORAN MEADOWS
NOTARY PUBLIC, HARRISBURG
DAUPHIN COUNTY, PENNSYLVANIA
My Commission Explres Oct. 2D, 1990 Notary Pill
Titie of Officer
ereby certify that the precise residence of the within Mortgagee is P .O. B ox 727. SO wear Th t rd errnnr
Mount Carmel, PA 17851-0727
(Signature)
ADJUSTABLE RATE NOTE
NOI ICF. TO BORROWER: THIS NOTE CONTAINS A PROVISION ALLOW-
ING FOR CHANGES IN THE. INTEREST RATE. INCREASES IN THE
IN I ERE.ST RATE. WILL RESULT IN IIIGHER PAYMENTS. DECREASES IN
I RE.INTERE.ST RATE WILL RESULT IN LOWER PAYMENTS.
.. Eab rtsncy. l.O, 198.9... ....Bar.eisbueg ............... 8eansylvan, .............
455 St. John'n Drive,Camp Ilill, Pennsylvari?fry 17011 mrc
1501 nrnewood Drive, Ilarriaburg, Pennsylvania 17111
...................... ...y ......................Srcre ......................Zip •Code....
Prnpnr .y.AA...d.r.n..r Glr
I. nmEROWE.R51'ROMISETO PAY
In return for a loan that I have received, I promise to pay U.S. f 170,000.00... (this amount will be called
"principa l'), plot interest, lathe order of the Lender. The Lender is ............................................
LIBERTY STATE BANK, P.O. Box 327, 50 West Third Street Maunl Carmel, Pa. 17851.0327
I unde rnand I hat I he Lender cony transfer this Note. The Lender or anyone who takes this Note by transfer and who is
entitled In receive payments under this Note will be tolled the "Note Holder."
2. INTrRF.ST
Inlerea will he charged on that pan of outstanding principal which has not been paid. Interest will be charged
beginning on the date I receive principal and continuing until the full amount of principal I receive has been paid.
lleginning on the dale of this Nate, l will pay interest at a yearly rate of .. F.1.5.... 96 (the "Initial Interest Rate', The
Idle rest rate I If n1 I will pay will change in accord once wit If Section 4 of this Note until my loan is paid. Interest rate changes
may occur on the ..lOtb.... day of the month beginning on .. Hatch. 1.0 ................... 19.90... and on that
day of the month every .... 12.... months thereafter. Each date on which the rate of interest may change will be called a
"Change Date."
J. PAYMENTS
(A) Time and Place of Payments
1 will pay principal and interest by mjl in p3nents every month. 1 will T51ce my monthly payments on the
.....IOL It day of cacti month beginning on ..., a, c ..... .................. 19....... I will make these payments
uni it I have Enid all of the principal and interest and any other charges described below, that I may owe under this Note.1
will pay all sums that I awe under this Note no later than ...... Fohtwu. M..2009 ...........................
(Iha "final payment date"I.
1 will "take my monthly payments at ..F.O.•..1hor, X7,.50.14.e.41;. Third. .41; rPP.t..NR4DI.!.4i919.1...
.. 1'A... 1795,1,-0777 ...................................... or at a different place if required by the Note Holder.
(it) norrower's Payment, Berore They Are Due
I have the right to make payments of Erincipal at any time before they are due. A payment of principal only is
known at a "prepaynunl." W hen I make a prepayment, I will tell the Note Holder in writing that 1 am doing sir. I may make
n lull prepayment or a partial prepayment without paying any penalty. The Note Holder will use allotmy prepayments,to
n educe the n mou nt ,(principal that I owe under this Note. 11 1 make spaniel prepayment, there will be no delays in the due
d otes of al y n"o hilly paynums mdcss the Note I holder agrees in writing to those delays. My partial prepayment will reduce
file amount of my monthly payments after the firs(Change Date following my partial prepayment. However, any reduction
due it, my partial prepayment may be offset by an interest rate increase.
(C) Amount ur Monthly Payments
My initial monthly payments will be in the amount of U.S. $1,584,k5...... 11 the interest rate that I pay
changes, the amount of my monthly payments will change. Increases in the interest rate will result in higher payments
(nnlest my prepayments since (he lost Change Dam offset the increases in my monthly payments). Decreases in the interest
one will result in lower payments. The amount of my monthly payments will always be sufficient to repay my loan intuit in
tuba Antinlly equal payments by the final paymen(da(e. In setting the monthly payment amount on each Change Date, the
Nate Holder will assume that the Note interest rate will not change again prior to the final payment dale.
FINNHLVANIA AMO NEW JERSEY ADJUSTABLE RATE LOAN NOTE
EEXHIBIT
r
r'
'4. INTEREST RATE CHANCES
(A) The Index
Anychanges in the interest rate will be based on changes in an interest rate index which will be called the"Index."
The Index is the: (Check one Dorm /ndirmr Index.)
(1) ®e "Contract Interest Rate, Purchase of Previously Occupied Homes, National Average for all Major
Types of Lenders" published by the Federal Home Loan Bank Board.
(2) 0. ...... ...............................................................................
..................................................................................................
If the Index ceases to be made available by the publisher, or by any successor to the publisher, the Note Holder
will set the Note interest rate by using a comparable index.
(B) Selling the New Interest Rile
To set the new interest rate, the Note Holder will determine the change between the Base Index figure and the
Current Index figure. The Base Index figure is .9. 3.1 • • • • • The Current Index figure is the most recent Index figure
available . . 4 5...... days prior to each Change Date. If the amount of the change is less than one-eighth of one percentage
point, the change will be rounded to zero. If the amount of the change is one-eighth orone percentage point or more, the
Note Holder will round the amount of the change to the nearest one-eighth of one percentage point.
If the Current Index figure is larger than the Base Index figure, the Note Holder will add the rounded amount of
the change to the Initial Interest Rate. If the Current Index figure is smaller than the Base Index figure, the Note Holder will
subtract the rounded amount of the change from the Initial Interest Rate. The result of this addition or subtraction will be
the preliminary rate. If there is no change between the Base Index figure and the Current Index figure after rounding, the
Initial Interest Rate will be the preliminary rate.
(Check the appraprlaa box(ollo /nd/rau whelha rhrrr G any maximum /Iml/ on Imrnn mu rhanl a and/ odlmlu on IN lmnn uau under rho Nou:
(fno Dos b checked their .111 b, nc maximum Ilmll on choose; and no limlu on the In/not rmr.]
(I) ? If this box is checked, there will be no maximum limit on changes in the interest rate up or down. The
preliminary rate will be the new interest rate.
(2) la If this box is checked, the interest rate will not be changed by more than... ono... percentage points
on any Change Date. The Note Holder will adjust the preliminary rate so that the change in the interest rate will not be more
than that limit. The new interest rate will equal the figure that results from this adjustment of the preliminary rate.
The interest rate will never be more than -1.4-5- %or less than o x %.
(C) Effective Dale of Changes
Each new interest rate will become effective on the next Change Date. If my monthly payment changes as a result
of a change in the interest rate, my monthly payment will change as of the first monthly payment date after the Change Date.
(D) Notice to Borrower
The Note Holder will mail me timely notice as required by law if the interest rate is to change. The notice will
advise me of:
(i) the new interest rate on my loan;
(ii) the amount of my new monthly payment; and
(iii) any additional matters which the Note Holder is required to disclose.
5. BORROWERS FAILURE TO PAY AS REQUIRED
(A) Late Charge for Overdue Payments
If the Note Holder has not received the full amount of any of my monthly payments by the end of ...LS • • ...
calendar days after the date it is due, I will pay a late charge to the Note Holder. The amount of the charge will be
......5 OD%of my overdue payment of principal and interest. I will pay this late charge only once on any late payment.
(B) Default
If 1 do not pay the full amount of each monthly payment by the dale stated in Section 3(A) above 1 will be in
default.
(C) Notice From Note Holder
If I am in default, the Note Holder may send me a written notice telling me that if 1 do not pay the overdue
amount by a certain date the Note Holder may require me to pay immediately the full amount or principal which has not
been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice
is mailed to me.
Even if, at a time when I am in default, the Note Holder does not require me to pay immediately in full as
described above, the Note Holder will still have the right to do so if 1 am in default at a later time.
•//mmr lhnn nnr An N,rhrrar.l rr l/m?W.? i-drd rd nml hale., 11,.......... I..... .e......,. ..
(D) Payment of Nate Holder's Costs and Expenses
If the Note Ilolder has required me to Pay immediately in full as described above, the Note Holder will have the
right (o be paid hark by me for all its rensanahie costs and expenses to the extenI not prohibIled byapplicable law. Those
expenses may include, for example, reasonable attorneys' fees.
6. WAIVERS
Anyone who signs this Note to transfer it to someone else (known as an "endorser') waives certain rights. Those rights
are (A) I he right to require the Note Ilolder to demand payment of amounts due (known as "Protestant and (B) the right
to require Ilse Note Holder to give notice Ihat amounts due have not been paid (known as "notice of dishonor').
7. GIVINGOPNOTICES
Except for the notice provided in Section 4(D), any notice that must be given to me under this Note will be given by
mailing it by cerlified mail. All notices will be addressed to me At the Property Address above. Notices will be mailed to most
a different address if 1 give the Note Holder a notice or my different address.
Any notice Thal must be given to the Nom Holder under this Nole will be given by mailing it bycerldiied mail to the Note
Holder at the address slated in Sealion)(A) above. Notices will be mailed to the Note Holder at & different address if I am
given a notice of that different address.
8. RESPONSIBILITY Or PERSONS UNDER THIS NOTE
If more than one person signs this Nole, each of us is fully and personally obligated to pay the full amount owed and to
keep all of the promises made in (his Note, Any guarantor, surely, or endorser of this Note is also obligated to do these
I pings. The Note Holder may enforce its rights under (his Note ngionsl each of us individually or against all of us together.
This means that any one of us may be required to pay all of the amounts owed under this Note.
Any person who lakes over my rights or obligations under this Note will have all of my rights and must keep all of my
promises made in this Note. Any person who lakes over the rights or obligations ofa guarantor, surety, orendorser of this
Note is also obligated to keep all of the promises made in this Note.
9. LOAN CHARGES
11 could be that this loan is subject la a law which sets maximum loan charges and that law is interpreted so that the
interest or other loan charges collected or to be collected in connection with this loan would exceed permitted limits. If this is
1 he case, then: (A) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit;
and (B) any sums already collected front me which exceeded permitted limits will be refunded to me. The Note Holder may
choose to make this refund by reducing the principal I owe under this Note or by making a direct payment to me. Ha refund
reduces principal, the reduction will be treated as a partial prepayment.
10. THIS NOTE. SECURED BY A MORTGAGE
In addition to the protections given to tite Note Holder under this Note, a Mortgage, dated
.... Fa b rVASY.) O, s , ..... 19A?... protects the Note Holder from possible losses which might result if 1 do not
keep Ilse promises which l make in t his Note, That Mortgage describes how and under what conditions 1 maybe required to
make immediate payment in full of all amounts that I owe under this Note, One of those conditions relates to any transfer of
the properly covered by the Mortgage In that regard, the Mortgage provides in paragraph 17:
17. Transfer of the Property; Assumption. If all or any part of the Property or an interest therein is sold or
transferred by Borrower without Lender's prior written consent, excluding (a) the creation of a lien or encumbrance
subordinme to this Mortgage, (b) the creation of a purchase money security interest for household appliances, (c) a transfer
by devise, descent or by operation of law upon the death of a joint tenant or (d) the grantor any leasehold interest of thtee
years or less not containing an option to purchase, Lender may, at Lender's option, declare all the sumsrecured by this
Mortgage to be immediately due and payable. Lender shall have waived such option to accelerate if, prior to the sale or
transfer, Lender and (hc person to whom the Property is to be sold or transferred reach agreement in writing Thal the credit
of such person is satisfaclory to Lender and that (Ile interest payable on the sums secured bythis Mortgage shall beat such
Borrower's
rare as Lender shall reyuesl. I(Lender Ims waived the option to eccelerale provided in this paragraph 17, ender if Borrowe
P writing by Lender, Lend shall releo successor rrower in iromnlearllesl It as obligations u executed nde a r wri this ttMen o artssgau g in e tiandon the agNom.reement accepted in
B ase
If Lendere xercises such option to accelerme, Lender shall mail Borrower Notice of Aecele..has in accordance
wish paragraph 14 hereof. Such notice shall provide a period of not less then 30 days from the date the notice is mailed
within which Borrower must pay the sumsdeclared due.B Borrowerfails to pay such sums prior to theexpirstion of such
period, Lender may suit haul further notice or demand on Borrower, invoke any reinedies permitted by paragraph 18 hereof.
An Adjustable Rate Loan Rider supplements the Mortgage and provides:
If there is a transfer of the Properly subject to paragrnph 17 of the Security Instrunmn6 Lender may require (I)nn
increase in the current Note intere-l rate, or (2) an "'crease"' (or removal oq the limit on the amount of anyone interest rate
change (if there is a limit), or (3) a change in the Rase Index figure, or all of these, as a condition of Lender's waiving the
option to accelerate provided in paragraph 17,
................... F LA2AR Bo wa (Seal)
it,
ZSP ??7 m'.w?.-.-.........(Seal)
MARIA UELANEY LA?raw?N/
.............................................(Seal)
Borrower
(Sign original only)
Residential Mortgage - 20 YEAR TERM
ADJUSTABLE RATE MORTGAGE PROGRAM DISCLOSURE
LIBERTY STATE BANK
This disclosure describes the features of this Adjustable Rate Mortgage (ARM) program you are considering. Information on other
ARM programs is available upon request.
1 GENERAL DESCRIPTION OF THE ARM PROGRAM
Your interest rate and payment can change of the first business day of every January, April, July, and October. The changes will
be based upon the movement of the interest rate index ('index'). The interest rate and payment Amount wilt increase if the Index
riles, and decrease if the index falls, subject to certain rules and limitations ('caps.) described below.
The date on which the Interest rate may change is the 'Interest Rate Change Date," The "Base Index' is the index at approximately
the time the loan is made. The "Current Index" Is the index at approximately the tfine of an Interest Rate Change Date. The
'Initial Interest Rate' is the starting interest rate for the loan. The 'Current Interest Rate" is the new Interest rate as of
Interest Rate and Change Date. The difference between the Base Index and the Current Index om an Interest Rate Change gate will
determine the amount to be added or subtracted from the Initial Interest Rate to calculate the Current Interest Rate on that same
Interest Rate Change Date, subject to rounding and the limitations ("taps") described below. Ask us for our current Interest rate
and current index value. The difference between the Base Index and the Initial Interest Rate is sometimes referred to as the
"Margin'. Ask Us for our current margin.
Your index will be the Contract Interest Rate, Purchase of Pr viousl Occ Ted Homes National Average for ell Major Lenders. as
made available by the ederal Name Loan Bank Board. Infocost ion about this index may be
c Lain ca ng 1.800.424.5405. If
this index is not available, a bcmparable Index will be used.
HOW YOUR INITIAL INTEREST RATE AND INITIAL PAYMENT AMOUNT WILL BE DETERMINED
Your initial interest rate will be based on market conditions at the time the loan is made.
Your initial payment will be based on the initial interest rate, loan balance and loan term. This Initial payment will be
determined by calculating the amount required to repay the anount of the loan in substantially equal monthly payments over the
loan term at the initial interest rate.
NOW YOUR INTEREST RATE CAN CHANGE.
Your interest rate can change on the first business day of every January, April, July, and October. The dates when the interest
rate can change are called 'Interest Rate Change Dates."
Your interest rate cannot increase or decrease more than one percentage point (1.0X) at each year. This is sometimes referred to
as the "periodic nteres ra a cap. r carrot ncrease more than ve percentage points (5.0X) over the term of
the loan. This is sometimes referred to as the R etime interest rate cap'.
To determine the anexnt by which the interest rate will change, the Lender will determine the change between the Base Index and
the Current Index as of 45 days prior to the Change Date. If the change Is less than one-eighth of one percent, it will be
rounded to zero; otherwise, the change wilt be rounded to the nearest ore-eighth of one-percent. The result wit be added to, or
subtracted from, as apppropriate, the Initial Interest Rate, and the result adjusted, if necessary, according to the lifetime and,
if applicable, the periodic interest rate caps, to determine the Current Interest Rate.
HOW YOUR PAYMENT CAN CHANGE
Your payment can change on the first business day of every January, April, July, erd October.
If the interest rate changes on an interest rate Change date, the payment change will become effective starting with the payment
due one month later. The new payment will be based on the new interest rate, the loan balance on the Change date, and the
remaining loan term. This new payment will be determined by calculating the amount required to repay the rewiring balance in
substantially equal monthly payments over the remaining loan term at the new interest rate.
NOTICE OF INTEREST RATE AND PAYMENT CHANGE
If your interest rate and payment change on any Change date, you will be notified at least 25, but no more than 76 days before the
due date of a payment at the new level. This notice will contain information about the Index, interest rates, payment amount, and
loan balance.
SEE REVERSE SIDE FOR IMPORTANT INFORMATION
EXHIBIT
t t /? ..
LENDER: Liberty State Bank
EXAMPLE OF MAXIMA( INTEREST RATE AND MAXIMUM PAYMENT VHICH COULD BE REQUIRED
• Your monthly payment can change every three months based an changes in the interest rate.
• For example. on a $10,000, 20 year loan with an initial interest rate of 9.500%
(the rate shown in the interest rate CctLn below for the year 1988 )
the maximum amount the interest rate can rise under this program is 5.00% to an Interest rate of 14.500 %
and the Monthly payment can rise from a first year payment of $93.21 to a maximun of
in the year 6 6124.69
HISTORIC EXAMPLE
The exaryle below shows how your payments would have changed under this ARM program based on actual changes in the index from 1977
to 1988. This does not necessarily indicate how your index, interest rate and Psyments will change in the future. The example
is based on the following assumptions:
Loan Amount: 510000.00
Term: 20 Tears
Adjustments .
Payment: Every Three (3) Months
Interest Rate: Every Three (3) Months
Base Index Value: 8.780
Base Int. Rate: . 9,250
Caps .
Annual Int. Rate: 1.00%
Life Int. Rate: 5.00%
Index:
Contract interest Rate, Purchase of Previously occupied Homes, National
Average for All Major Lenders, as made available by the Federal Home Loan Bank Board
Current
Current Change Interest
Year Index in Index « Rate «. Monthly Rena fining
(%) (%) Payment Balance
1977 8.780 0.000 9.25 .250 ($1 ($)
1978 9.270 0.500 9.750 91.59 9818.39
1979 10.460 1.625 10.750 • 94
.75 9630.47
1980
12.280
3.500
11.750 • 100
.98 9444.98
1981
14.400
5.625
12
750 • - 107.16 9259.00
1982
15.010
6.250 .
13
750 • 113.26 9069.54
1983
12.210
3.375 .
12
750 • 119.26 8873.39
1984
.11.790
3.000 .
12
250 113.51 8628.70
1985
11.290
2.500 .
11
750 110.81 8340.19
1986
9.830
1.000 .
10
750 • 108.28 8002.99
1987
9.020
0.250 .
9
750 • 103.62 7600.38
1988
8.980
'0.250 .
9
500 99.39 7128.00
. 98.43 6601.42
• Interest rate reflects a 1.000 % tmuat Interest rate cap and floor.
"Interest rate reflects a 5.000 % Lifetime interest rate cap.
• The difference between the
Your Margin may be different Base Index and the Base Interest
Ask us fo Rate shown above is sometimes referred to as a Margin.
. r our Current Margin.
•+• Change in Index is the Current Index minus the Base Index.
« The Current Interest Rate Is the Intitial Interest Rate plus the charge in Index.
To see what your monthly payments would have been during that period
divide
our
monthly payment by that mama. (For
example
in ,
y
mortgage amount by $10
19 ,000, then multi ply the
would be: $60,000/S10,000 •
6, 6 X ,
$98
43 88 the monthly payment amount on $
' 60,000 taken cut in 1977
. : $590.58 .)
20YR. Mort.
Residential Mortgage Loan Disclosure Statement
LIBERTY STATE BAJQK
Lender: MOUNT CARMEL, PA_
ALFRED J. LAZAR
i4ARIA DRT.AMVV rnon,.
Variable Rate: QAhe Annual Percentage Rate may increase during the term of this transaction as described in the separate variable rate mortgage loan disclosure statement.
Security: You are giving a security interest in the property being purchased.
Q You are also giving a security interest in T.9 n T R r ., nA r a
Filing Fees: S ends of James Delaney and $15000.00 escrow acce:
Late Charge: If a payment is late, you will be charged S %of the payment
Prepayment: If you pay off early, you
C3 may Gltwill not have to pay a penalty.
[Cony ? will not be entitled to a refund of part of the Finance Charge.
Assumption: Someone buying your home
C3 may, subject to certain conditions, be allowed to assume the remainder of the mortgage on the original terms.
®ecannot assume the remainder of the mortgage on the original terms.
Property Insurance: Property insurance is required. You may obtain property insurance through anyone of your choice that is acceptable to Lender.
See your contract documents for any additional information about nonpayment, default, any required prepayment in full before the scheduled date, security interests, and prepayment
refunds and penalties.
?.,,,?... uU""'e no creep msaonery insurance are not required to obtain credit and no such insurance will be applied for or provided unless you sign and agree to pay the
addihonal cost
Type ture
Credit Life t to apply for
file insurance
Credit
Disability sera..
t to apply Itt
disability insurance
CredN Life and
Credit Disability T to apply I coedit
T
d disability
Joint th wart
Credit Uk y for
redN
rance
-- ..^^.^.vug wng;rTwiprete c yol this Disclosure Statement A
?-?YVa 1
"e irl",
gnalure J. L Bari ' gnalure ,l9 'r
Maria
eANCONSUMER FORM US M.202(a)(Rr. 6/96) QAI anaV T.aoar WIT
EORROWER'9 copy
0 1986 BA14CONSUMER SERVICE. INC
ANNUAL -?'
PERCENTAGE RATE FINANCE
il Arnount Total of
CHARGE financed otal
The cost of your ered as The dollar amount the credit P ayments
a yearly rate. will cast The amount of credit provided The amount you will have paid alter you
you. to you or on your behaN.
have made all
9.738 % S 213,106 23 j wyments as schedu ed.
167,200.00 j 380.'Ana: ??.
}?? ?^?^ 4.
T?
¦ ' betty State Bank
An Affiliate of COnVnonWealth Bancshares Corporation
February 9, 1990
Alfred J. Lazar
Maria Delaney Lazar
455 Sc. Johns Drive
Camp Hill, PA 17011
Dear: Alfred 6 Maria,
717.339.1590
This notice Is being sent to Inform you that Liberty State Bank will
adjust the Interest rate on your adjustable rate mortgage from9.50% to
9.875% on your adjustment date which IsMarch 10 . Due to this change,
your new principal and Interest payment will be$ 1,028.06 The change
in your payment amount will be effective with your March payment,
if current. The balance or which the new payment was based Is $105,647.
When your loan was originated, the Index upon which your Interest rate
changes are based was 9.31% The Index on which your Interest rate
was based on during the past year was 9.69% This rate is
currently 9.69%
If your adjustable rate mortgage Is paid ahead or Is in arrears on your
rate adjustment date, your new payment may be different than disclosed
above.
1. 1
Very Lrtiiy yours,
?ta ?OZc??
Debra Kowaleski
Loan Clerk
Liberty state Bank • Third at Maple 0 Mount Carmel, PA 17851
EXHIBIT
to D..
L16CRTY STATE BANK
24087-001-451-4
LOAN NUMBER
MORTGAGE LOAN
ARM DISCLOSURE NOTICE
THIS IS AN IMPORTANT NOTICE OF CONTRACTUAL
CHANCES TO YOUR ADJUSTABLE RATE MORTGAGE
ALFRED J LAZAR
MARIA DELANEY LAZAR
455 Si JJhNS DRIVE
CAMP HILL
PA 17011
PROPCRTY
LOCATION : 455 ST JOHNS DRIVE
CAMP HILL
01/29/91
STATEMENT CATE
PA
THC PAYMa NT JN YOUR LOANS SECUREU dY A MORTGAGE ON THE ASCVE REFERE,VCEC
PRJPCRTYS IS SCHEJULEJ TC do AJJUSTEJ ON THE AiJUSTMcNT DATE ShOWN' SELCn•
CAREFULLY READ THE FOLLOWING FACTS A3OUT YOUR LOAN ON THIS DATE.
--------- LUAN INFORMATION ------- ---- INDEX INFORMATION ----
ADJUSTMENT DATE 03/C8/9I CURRENT INDEX VALUE 9.5doU
CURRENT PRINCIPAL BALANCE 1025518.47 PRAiVIUUS INDEX VALUE 9.E8oo
PROJECTED BALANCE ON CHG OT 1029139.86 BASE INDEX VALUE 9.310C
NEXT ADJUSTMENT DATE 03/00/92 INDEX CHANGE .100G-
PYMTS NEW RATE IN EFFECT 26 PREVIOUS CARRYOVER .0000
ORIGINAL INTEREST RATE 9.5000 NEW CARRYOVER Coco
CURRENT INTEREST RATE 9.8750 VARIANCE TO THE INDEX .0000
NEW INTEREST RATE 9.7500 INTERVAL MAX RATE CHG 1.0000
MAXIMUM RATE CHANGE 5.0000
CURRENT PAYMENT AMOUNT 514.03
NEW PRINCIPAL E INTEREST 502.44
ESCROW AMOUNT .00
NEW PAYMENT AMOUNT 502.44
BEGIN WITH PYMT DUE ON 03/22/91
NBR OF PYMTS AT NEW AMOUNT 26
PMT NEC TO FULLY AMORT 540.89
IF YOU HAVE ANY QUESTIONS CONCERNING THIS
NOTICES PLEASE CONTACT THE ORGANIZATION
LISTED ABOVE.
\ LIBERTY BANK
INCORPORATED AS COMMONWEALTH BANK
01087-001-451-4 MORTGAGE LOAN
LOAN NUMBER ARM DISCLOSURE NOTICE
THIS IS AN IMPORTANT NOTICE OF CONTRACTUAL
CHANGES TO YOUR ADJUSTABLE RATE MORTGAGE
ALFRED J LAZAR
MARIA DELANEY LAZAR
455 ST JOHNS DRIVE
CAMP HILL
PA 17011
PROPERTY
LOCATION : 455 ST JOHNS DRIVE CAMP HILL
02/12/92
STATEMENT DATE
PA
THE PAYMENT ON YOUR LOAN, SECURED BY A MORTGAGE ON THE ABOVE REFERENCED
PROPERTY, IS SCHEDULED TO BE ADJUSTED ON THE ADJUSTMENT DATE SHOWN BELOW.
CAREFULLY READ THE FOLLOWING FACTS ABOUT YOUR LOAN ON THIS DATE.
---------- LOAN INFORMATION ---------- ---- INDEX INFORMATION ----
ADJUSTMENT DATE 03/06/92 CURRENT INDEX VALUE 9.1500
CURRENT PRINCIPAL BALANCE 99,118.22 PREVIOUS INDEX VALUE 9.5800
PROJECTED BALANCE ON CHG DT 98,855.22 BASE INDEX VALUE 9.3100
NEXT ADJUSTMENT DATE 03/06/93 INDEX CHANGE .4300-
PYMTS NEW RATE IN EFFECT 26 PREVIOUS CARRYOVER 160o-
ORIGINAL INTEREST RATE 9.5000 NEW CARRYOVER .3400-
CURRENT INTEREST RATE 9.7500 VARIANCE TO THE INDEX .0000
NEW INTEREST RATE 9.5000 INTERVAL MAX RATE CHG 1.0000
MAXIMUM RATE CHANGE 5.0000
CURRENT PAYMENT AMOUNT 502.44
NEW PRINCIPAL & INTEREST. 489.22
ESCROW AMOUNT .00
NEW PAYMENT AMOUNT 489.22
BEGIN WITH PYMT DUE ON 03/20/92
NBR OF PYMTS AT NEW AMOUNT 26
PMT NEC TO FULLY AMORT 508.28
IF YOU HAVE ANY QUESTIONS CONCERNING THIS
NOTICE, PLEASE CONTACT THE ORGANIZATION
LISTED ABOVE.
Corrected Copy
LIBERTY BANK
INCORPORATED AS COMMONWEALTH BANK
01087-000-304-6 MORTGAGE LOAN 01/22/93
LOAN NUMBER ARM DISCLOSURE NOTICE STATEMENT DATE
THIS IS AN IMPORTANT NOTICE OF CONTRACTUAL
CHANGES TO YOUR ADJUSTABLE RATE MORTGAGE
ALFRED J LAZAR
MARIA DELANEY LAZAR
455 SAINT JOHNS OR
CAMP HILL
PA 17011
PROPERTY
LOCATION : 1501 BRAEWOOO DR
HARRISBURG DAUPHIN CTY PA
THE PAYMENT ON YOUR LOAN, SECURED BY A MORTGAGE ON THE ABOVE REFERENCED
PROPERTY, IS SCHEDULED TO BE ADJUSTED ON THE ADJUSTMENT DATE SHOWN BELOW.
CAREFULLY READ THE FOLLOWING ADJUSTMENTS. IF YOU HAVE ANY QUESTIONS,
PLEASE CONTACT LOAN OPERATIONS AT 800-326-9406 EXT
---------- LOAN INFORMATION ---------- ---- INDEX INFORMATION ----
ADJUSTMENT DATE 03/10/93 CURRENT INDEX VALUE 7.9000
CURRENT PRINCIPAL BALANCE 96,824.01 PREVIOUS INDEX VALUE 9.1500
PROJECTED BALANCE ON CHG DT 95,529.78 BASE INDEX VALUE 9.3100
NEXT ADJUSTMENT DATE 03/10/94 INDEX CHANGE 1.2500-
PYMTS NEW RATE IN EFFECT 12 PREVIOUS CARRYOVER .0034-
ORIGINAL INTEREST RATE 9.5000 NEW CARRYOVER .2534-
CURRENT INTEREST RATE 9.5000 VARIANCE TO THE INDEX .0000
NEW INTEREST RATE 8.5000 INTERVAL MAX RATE CHG 1.0000
MAXIMUM RATE CHANGE 5.0000
CURRENT PAYMENT AMOUNT 978.44
NEW PRINCIPAL & INTEREST 916.35
ESCROW AMOUNT .00
NEW PAYMENT AMOUNT 916.35
BEGIN WITH PYMT DUE ON 04%10/93
NBR OF PYMTS AT NEW AMOUNT 12
PMT NEC TO FULLY AMORT 916.35
IF YOU HAVE ANY QUESTIONS CONCERNING THIS
NOTICE, PLEASE CONTACT THE ORGANIZATION
LISTED ABOVE.
\ Meridian Mortgage Corporation
Two Devon Square
744 West Lancaster Avenue
P.O. Box 6800
Wayne. PA 19087
(800) 223-7061. (610) 971-6000
e Meridian Mortgage
February 13, 1995
Alfred J Lazar
Maria Delaney Lazar
455 Saint Johns Dr
Camp Hill PA 17011
NOTICE OF INTENT TO CHANGE THE INTEREST RATE
ON YOUR ADJUSTABLE RATE MORTGAGE LOAN
Re: MMC Loan No. 3638350
Basis Code: 626- Investor No. 062
Dear Mortgagor(s) :
In accordance with your original mortgage agreement, your
account is scheduled for an interest rate and payment change
effective with the April, 1995 payment.
INTEREST RATE INFORMATION
Base Index Value: See your New Index* Rate: 7.20000W
Mortgage Note
Current Interest Rate: 7.50000% New Interest Rate: 7.37500W
Interest Rate Formula: Comparing the Base Index to'the New Index
Rate. The difference will be added to or subtracted from the Original
Interest Rate and is subject to minimum and maximum limitations
and/or rounding as set forth in your Mortgage Note.
PAYMENT INFORMATION
Principal & Interest
Escrow
LOAN ACCOUNT INFORMA
Original Loan Amount
Principal Balance as
Current Payment New Payment
$ 920.40 $ 920.04
229.50 229.50
PION
$ 101,836.00
of Change Date $ 95,562.47
Your next Interest Rate Change will be 12 months from April, 1995.
Your next Payment Change will be 12 months from April, 1995.
You will be notified of this at least 30 days prior to the change date.
If you are not using our automatic payment withdrawal service, you will
receive a monthly billing statement or coupon book reflecting this change.
e Merldlan Mortgage Corporation
Two Devon Square
744 West Lancaster Avenue
P.O. Box 6800
Wayne, PA 18087
(800) 223.7061, (610) 971.6000
?JMeridian Mortgage
Alfred J Lazar
Maria Delaney Lazar
MMC 3638350
2 February 13, 1995
If You pay an amount other than the actual monthl
monthly
please note on your monthly bill, check or mone
wish the funds to be applied.
Y order how you
You are entitled to prepay your entire principal balance
or any portion of it at any time without penalty. However,
du
ou are e datenbeyond the next interestmchange hdateW11Onlyv3.2ce
months your
payments will be accepted at this rate.
i
Please do not hesitate to call 1-800-235-5626 if you have any
questions or require additional information about your current
mortgage. We appreciate this opportunity to be of service to you.
V ry truly ours,
ervicing Op ations
** In addition to the noted rat c ange, your escrow account, if
applicable, is adjusted annu
prior year's escrow payments. - to reflect changes over the
on the same date, so our mo These changes may not be effective
during the year. However,arrateechangenwillynootaaffect twice the
escrow requirements and vice versa.
AR172-005-CPI
\ Mortgage Servicing Center
\\\ 33 West Third Street
PA. Box 308
Williamsport, PA 17701
iM Meridian°
Alfred J Lazar
Maria Delaney Lazar
455 Saint Johns Dr
Camp Hill PA 17011
February 23, 1996
NOTICE OF INTENT TO CHANGE THE INTEREST RATE
ON YOUR ADJUSTABLE RATE MORTGAGE LOAN
Re: MMC Loan No. 3638350
Basis Code: 626- Investor No. 062
Dear Mortgagor(s):
In accordance with your original mortgage agreement, your.
account is scheduled for an interest rate and payment change
effective with the April, 1996 payment.
INTEREST RATE INFORMATION
Base Index Value: See your
Mortgage Note
Current Interest Rate: 7.37500
New Index* Rate: 7.74000
New Interest Rate: 7.87500k
Interest Rate Formula: Comparing the Base Index to the New Index
Rate. The difference will be added to or subtracted from the Original
Interest Rate and is subject to minimum and maximum limitations
and/or rounding as set forth in your Mortgage Note.
PAYMENT INFORMATION
Current Payment New Payment
Principal & Interest $ 920.04 $ 945.21
LOAN ACCOUNT INFORMATION
Original Loan Amount $ 101,836.00
Principal Balance as of Change Date $ 91,431.97
Your next Interest Rate Change will be 12 months from April, 1996.
Your next Payment Change will be 12 months from April, 1996.
You will be notified of this at least 30 days prior to the change date.
If you are not using our automatic payment withdrawal service, you will
receive a monthly billing statement or coupon book reflecting this change.
Mortgage Servicing center
,. 33 West Third Street
P.O. Box 308
Williamsport, PA 17701
a Meridia-W
Alfred J Lazar
Maria Delaney Lazar
MMC 3638350 2
February 23, 1996
If you pay an amount other than the actual monthly payment,
please note on your monthly bill, check or money order how you
wish the funds to be applied.
You are entitled to prepay your entire principal balance
or any portion of it at any time without penalty. However, ou are due datenbeyond the next payments
change which date. Onlyv12Ce your
months payments will be accepted at this rate.
Please do not hesitate to call 1-800-235-5626 if you have any
questions or require additional information about your current
mortgage. We appreciate this opportunity to be of service to you.
very truly yours,
Servicing Operations
** In addition to the noted rate change, your escrow account, if
applicable, is adjusted annually to reflect changes over the
prior year's escrow payments. These changes may not be effective
on the same date, so your mortgage payment may change twice
during the year. However, a rate change will not affect the
escrow requirements and vice versa.
AR172-005-CPI
v L
0
rM0 0
V/
SHERIFF'S RETURN - REGULAR
CASE NO: 1999-03945 P
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF CUMBERLAND
LAZAR ALFRED J ET AL
VS.
FIRST UNION NATIONAL BANK
DAVID MCKINNEY Sheriff or Deputy Sheriff of
CUMBERLAND County, Pennsylvania, who being duly sworn according
to law, says, the within NOTICE AND COMPLAINT, was served
upon FIRST UNION NATIONAL BANK the
defendant, at 13:40 HOURS, on the 30th day of June
1999 at 604 EAST HIGH STREET
CARLISLE, PA 17013 CUMBERLAND
County, Pennsylvania, by handing to KAREN SHUSTOCK (CUSTOMER
RELATIONS)
a true and attested copy of the NOTICE AND COMPLAINT,
together with DECLARATORY JUDGEMENT
and at the same time directing Her attention to the contents thereof.
Sheriff's Costs:
Docketing
1 So answers:
Service
Affidavit 8.00
3.10 nom/pr1Al1[
?
.00 ,
.
Surcharge 8.00 omas ine, eri?
$77.U -0ROUJOS GILROY
99g
by
epu y sne i
Sworn and subscribed to before me
this /,,.r day of
19 99 A.D/.
rocnonot-ar
Steven J. Adams, Esquire
STEVENS & LEE
111 North Sixth Street
P.O. Box 679
Reading, Pennsylvania 19603
(610) 478-2133
Attorneys for defendant
ALFRED J. LAZAR and MARIA
DELANEY LAZAR,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
No. 99-3945 CIVIL
V.
FIRST UNION NATIONAL BANK,
Defendant
To: ALFRED J. LAZAR and MARIA DELANEY LAZAR, Counterclaim
Def endants
NOTICE TO DEFEND
You have been sued in court. If you wish to defend
against the claims set forth in the following pages, you must
take action within twenty (20) days after this complaint and
notice are served, by entering a written appearance personally or
by attorney and filing in writing with the court your defenses or
objections to the claims set forth against you. You are warned
that if you fail to do so the case may proceed without you and a
judgment may be entered against you by the court without further
notice for any money claimed in the complaint or for any other
claim or relief requested by the plaintiff. You may lose money
or property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF
YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE. GO TO OR TELEPHONE
THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL
HELP.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, Pennsylvania 17103
Telephone (717) 249-3166
RDa/122308/00000. 000
ALFRED J. LAZAR and MARIA
DELANEY LAZAR,
Plaintiff
V.
FIRST UNION NATIONAL BANK,
Defendant
1N THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
No. 99-3945 CIVIL
NOTICE TO PLEAD
TO: ALFRED J. LAZAR and MARIA DELANEY LAZAR
You are hereby notified to file a written response to
the enclosed new matter and counterclaim within twenty (20) days
from service hereof or a judgment may be entered against you.
STEVENS & LEE
By
Steven J. Adams
111 North Sixth Street
P.O. Box 679
Reading, PA 19603-0679
Attorneys for Defendant,
First Union National Bank
Roc/122308/00000.000
Steven J. Adams, Esquire
STEVENS Sc LEE
111 North Sixth Street
P.O. Box 679
Reading, Pennsylvania 19603
(610) 478-2133
Attorneys for defendant
ALFRED J. LAZAR and MARIA
DELANEY LAZAR,
Plaintiff
V.
FIRST UNION NATIONAL BANK,
Defendant
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
No. 99-3945 CIVIL
ANSWER OF DEFENDANT WITH
NEW MATTER AND COUNTERCLAIM
Defendant First Union National Bank ("First Union")
answers to plaintiffs' complaint, and asserts new matter and
counterclaim, as follows:
ANSWER TO COMPLAINT
1. Admitted, upon information and belief.
2. Admitted.
3. Admitted.
4. Admitted.
5. Denied. After reasonable investigation, First
Union is without knowledge or information sufficient to form a
belief as to the truth of the averments in paragraph 5.
ROO/122208/""""0."00
1
6. Denied as stated. The Note and Mortgage are
written documents, reflect the agreement of the parties as to the
terms of the loan and speak for themselves.
7. Denied. To the contrary, the Lazars and Liberty
specifically agreed that the minimum interest to be charged over
the life of the loan would never fall below the rate of 9.5% per
annum. By way of further answer and defense, the allegations in
Paragraph 7 of the Complaint are in direct contradiction to the
unambiguous terms of the Note and Mortgage attached to the
Complaint.
8. Denied. It is specifically denied that Liberty
committed an error in the transcription of the agreement between
the Lazars and Liberty. To the contrary, the terms of the Note
and Mortgage reflect the terms of the loan as proposed by Liberty
and accepted by plaintiffs.
9. Denied. After reasonable investigation, First
Union is without knowledge or information sufficient to form a
belief as to the truth of what the plaintiffs realized or did not
realize at the time the documents were signed. It is
specifically denied that Liberty had not realized that a mistake
had been made in the transcription of the agreement at the time
the documents were signed. To the contrary, there was no mistake
and the Note and Mortgage reflect the terms of the loan as
proposed by Liberty and accepted by plaintiffs.
Rio/12200e/00000.000 2
10. Denied as stated. Exhibit "C" to the Complaint is
a written document that speaks for itself. By way of further
answer and defense, in addition to the disclosure statements
attached to the Complaint as Exhibit "C," plaintiffs were also
sent an additional disclosure form that described the agreed
terms of the loan sixteen (16) days before the Note and Mortgage
were signed, and this disclosure form clearly and conspicuously
disclosed at two different places that the interest rate on the
loan would never fall below 9.5%-. See New Matter infra.
11. Admitted.
12. Admitted in part; denied in part. It is admitted
that the index variance and interest rate decreases occurred as
alleged. It is denied that the interest rate decrease to 8.5t
was consistent with the understanding of plaintiffs and Liberty
relative to the floor on rate changes. To the contrary, the rate
decrease below the min:.mum floor of 9.5%- was inconsistent with
the agreement of the parties, as reflected in the disclosure
forms and the Note and Mortgage, and was allowed in error by
First Union's predecessors Commonwealth Bank and Meridian Bank.
13. Admitted in part; denied in part. It is admitted
that the index variances and interest rate decreases occurred as
alleged. It is denied that the interest rate decreases below
9.5t were consistent with the understanding of plaintiffs and
Liberty relative to the floor on rate changes. To the contrary,
the rate decreases below the minimum floor of 9.5W were
RW/12220e/00000. 000 3
inconsistent with the agreement of the parties, as reflected in
the disclosure forms and the Note and Mortgage, and was allowed
in error by First Union's predecessors Commonwealth Bank and
Meridian Bank.
14. Admitted. By way of further answer and defense,
the changes in interest rate in 1993, 1994, 1995 and 1996 were
not correct, were made in error by Commonwealth Bank and Meridian
Bank, First Union's predecessors, and were contrary to the
express terms of the Note and the Mortgage.
15. Admitted.
I
16. Admitted.
17. Admitted in part. Denied in part. It is admitted
that First Union became the successor in interest to CoreStates
and Liberty sometime in 1998. It is admitted that First Union
has maintained that the loan has a minimum interest rate of 9.5$.
It is specifically denied that First Union's position is contrary
to the agreement of the Lazars and Liberty. To the contrary,
First Union's position is consistent with the signed loan
documents between the parties and
consistent with the terms of
the loan as disclosed to the Lazars at least 16 days before
execution of the loan documents. It is plaintiffs' position that
is contrary to the agreement of the parties.
18. Denied. To the contrary, First Union has at all
times abided by the terms of the loan documents. It is
plaintiffs who refuse to abide by the terms of the loan documents
RDG/122209/OOD00.000 4
and seek to take advantage of the errors made in their favor
between 1993 and 1997 by First Union's predecessors.
WHEREFORE, defendant First Union National Bank requests
that the relief requested in the complaint be denied and that
defendant be awarded its costs in defending this action.
COUNT II
19. Paragraphs 1 through 18 above are incorporated
herein by reference.
20. Denied as a conclusion of law. By way of further
answer and defense, First Union has at all times acted in
accordance with the terms of the agreement between plaintiffs and
Liberty, as evidenced by the disclosure statements and written
loan documents.
WHEREFORE, defendant First Union National Bank requests
the Court to deny the relief requested in the Complaint and award
defendant its costs in defending this action.
NEW MATTER
21. First Union incorporates herein Paragraphs 1
through 20 above.
22. Sometime prior to January 25, 1989, plaintiffs
applied to Liberty for a residential mortgage loan in the amount
of $170,000.
23. Plaintiffs requested that the loan be made under
Liberty's Adjustable Rate Mortgage Program.
Roc/117108/00000.000 5
24. On January 25, 1989, Liberty notified plaintiffs
in writing that their loan application had been approved.
25. In accordance with state and federal law, enclosed
with the written notification were various required disclosures
including disclosure statements regarding how Liberty's ARM
Program worked and what the maximum and minimum interest rate
changes would be over the life of the loan.
26. While plaintiffs attached certain of these
disclosure statements to the Complaint filed in this action,
plaintiffs failed to attach all the disclosure statements they
were given, in particular the disclosure statement that directly
contradicts their current position.
27. Attached hereto collectively as Exhibit "All are
true and correct copies of the written notice sent to plaintiffs
informing them that their loan application had been approved and
the missing disclosure statement that accompanied that letter
(the "ARM Disclosure Statement"), both of which documents are
incorporated herein by reference.
28. The ARM Disclosure Statement clearly and
unambiguously discloses at two different places that the minimum
interest rate over the life of the loan would never fall below
9.5%.
29. The ARM Disclosure Statement was provided to
plaintiffs at least 16 days before the Note and Mortgage were
signed.
R00/122100/00000.000 6
30. Between the date the ARM Disclosure Statement was
sent to the plaintiffs and the date they signed the Note and
Mortgage, plaintiffs never informed anyone at Liberty that the
ARM Disclosure Statement was wrong.
31. The terms of the Note and Mortgage are consistent
with the terms of the ARM Disclosure Statement as to the minimum
interest rate to be charged over the life of the loan.
32. The decreases in the interest rate on the loan
below the 9.5% allowed by Commonwealth Bank and Meridian Bank
between 1993 and 1996 were made in error, due likely to an
oversight as the loan was switched from one loan system to
another in connection with the mergers and acquisition to which
Commonwealth and Meridian were parties.
33. Plaintiffs knew or should have known that
Commonwealth and Meridian had made errors in decreasing the
i
interest rate below the agreed minimum of 9.5$, yet plaintiffs
never brought this error to the attention of either Commonwealth
and Meridian, and instead decided to take advantage of this error
when they knew or should have known that it was wrong to do so.
I
34. In 1996, CoreStates detected the error and
i
correctly asserted that the interest rate on the loan had to be
increased to the contractual minimum of 9.5%.
35. Plaintiffs' claims are barred by the doctrines
truth and justification.
RW/1223 08/00000.000 7
36. Plaintiffs' claims are barred by the doctrines of
waiver and laches.
37. Plaintiffs' claims are barred by the parole
evidence rule.
38. Plaintiffs' claims are barred by the statute of
frauds.
WHEREFORE, defendant First Union National Bank requests
the Court to deny the relief requested in the Complaint and to
award defendant its costs incurred in defending this action.
39. First Union incorporates herein paragraphs 1
through 38 above.
40. Between 1993 and 1997, plaintiffs paid interest on
their outstanding loan at a rate that was below the agreed
minimum rate as set forth in the Note, the Mortgage and the ARM
Disclosure Statement.
41. Plaintiffs knew or should have known that they
were paying interest at a rate below the contractual limit, but
failed to disclose this mistake to First Union or its
predecessors and decided to take advantage of this error for
their own pecuniary benefit even though they knew it was wrong to
do so.
42. As a result, plaintiffs have been unjustly
enriched at the expense of First Union.
RW/122306/00000.000 8
d'.,
43. Plaintiffs are indebted to First Union for the
lost interest income that was contractually owed to First Union
between 1993 and 1997.
WHEREFORE, defendant demands a money judgment against
plaintiffs for the proper amount of interest due under the loan
documents between 1993 and 1997 that has never been paid by
plaintiffs, together with accrued interest thereon, costs of
suit, and reasonable attorneys' fees.
STEVENS LEE
By:
n J. Adams
Attorney I.D. No. 56293
111 North Sixth Street
P.O. Box 679
Reading, PA 19603-0679
(610) 478-2133
Attorneys for Defendant
First Union National Bank
R0G/122208/00000.000 9
.x
Exhibit A
rN C,
An AFXnft u(Commomaedlh Bandmra C wpnnlbn
January 25, 1989
Mr. and Mrs. Alfred J. Lazar
1501 Braewood Drive -
Harrisburg, Pa. 17111
Dear Mr. and Mrs. Lazar:
We are pleased to inform you that we have approved your application
for a loan in the amount of $170,000.00 to be secured by your Note,
Bond and Warrant and First Mortgage, all'in conformance withtthe
laws and regulations of the Commonwealth of Pennsylvania and the
Supervisory authorities under which we operate.
The loan will be for a twenty (20) year term and provide for monthly
payment of $1584.63, applied first to interest at the rate of nine
and one half (9 1/21) per cent per annum, then to reduction of the
principal debt. A provision will be included on the Mortgage and
Bond and Warrant, permitting you to prepay the unpaid balance of
principal on any interest payment date without payment of premium.
Under Pennsylvania State Banking Laws, we are required to furnish
you with a Disclosure Statement at least five (5) business days
prior to the date of loan settlement. After reviewing the enclosed
completed Disclosure Statement, you are requested to return same
to the Liberty State Bank no later than:, five (5) days from above
date.
7n4A•15W
Closing of this loan is subject to the following:
1. Execution of the proper loan papers
2. Title Insurance Binder, certifying the Bank's Mortgage
as a first lien without exception.
3. Appraisal by company not affiliated with buyer or
seller.
4. Furnishing of fire and extended coverage insurance of a
homeowner's policy in the amount of no less than the
amount of the mortgage, in form satisfactory to the
Bank with proper mortgage clause in our favor.
State Bank
tibenr S.I. Bank. Third at Maple. M.., Carmel. pA 173!1
LtBEITTY STATE BANK P.O. Bm 127, 5D Weal Street Mount Carmel, Pa. 17851-0127
NuseRally GlduA/II ryufall laeaPl71m INAdlusMON R+bMNIDIt URMI Two 0111, nowdone!
past nwl,ta edge whoch in m+e be Losses.
IACEANT ATI GAGE LOAN INEOAMATION
eWhowidiw- I moo.,...nheddlnmuhM..nlMrnwlnnaM
Ceeml Muilp o. of ACI,Nlletste Wgiit sue
LOAN TERM .................................... 20 Years MINIMUM RATE OVER LIIE OF LOA"................. ---2.5IT
OWE PER= BEFORE FIRST RRIE CHANGE .......... 12 Maths MAAIMUM RAZE OVER U11 Of LOAN ................. - 19..5.0_ +
FRE=KY OF RAIE CHANGES .................a... (MY 12 "IN 1=16I1stTy OF INCREASING LOAN DM AKE.......... C3 Ye, Zlb
MARIMUNRA CNh ncrOinvol E -1_ % HIEPAYMENI FEE ............... . ............... 0741 SO Ito
Wpasablo to m both increases eta dofbMN .........
MINIMUM RATE CHANCE Al WE TIME
OPOUW lO toll, Increases aM dominM......... 1 REPAYMENT PENALTY ........................... ?Tit 23 "1
ASSUMABILITY .................................. )0 Bus O A IN' OnCRIM
Nor Yom Adjbstablelalt MW Itlge Would Work
LVARTINGINIERESTRAIE rhoxallillingnsl fait alleed by non an ARM mil be demminM by.$h+ud an mmNO[ondilbm It opt hop Of 1P01rNx al ?bu <!,amC
M emIm we mite a loop [omndlmeM to Far, x et O OM,
I FREQUENCY OF INTEREST RAIED"ES Yex MWN ntt wdlte rnmred Hugl fill -Exclays-SaLt-Leramen.G.-dal.
19- and my Wnese K Count sl la@W NMQ BeeMl band On chanln in The inns.
3 [NOES FOR MEASURING INTEREST RATE CHANGES The tent, to rhKh your Wnunl Fitt -is be dad is um manlN/,togs contract i.100,41e:h+rled 1,1+11 nMen an a miame
loans W P,nWgy occupied Mann Inlmmlion m Late iMa Is rcooled monthly by IN Federal Ham, In. IUA Boxd. To MAN, what the iMS b YOU mat Call the NRdrn numm,
1.100121.5105.
The table beb Aw"atoo-you Halaryx mormenM at Ibis unto. This does fast necnufRt indisle him the index may shi in the lulu,,
10•Yew HlstorT 01 The AwT Comment Ini Ralts Charted On Morgall Loan, For Previously Occupied Homes
Date Ind,e Change From PrusMin{Rate Date Ind,[ Change Form Preceding Rare
1977 Dec 6.9T.r 1911 Jlm 1231% ...................1.23•
1979 bum 9.27 . ..................• .34. INC. 11.9.1: ................... W.
Dec 8955 ..................• 12% 191+ tuna 11.791 15'
1979 bum 10.461 ......... .......... 1.51. OK 12:6% at'-
OIL ILm ..................•1.121 1915 June 11.291. ..................• 91'.
1960 hum 1258% ...................1191 Dec 10.10% ................... 591
V.
OK 13151 ..................• 2111 1916 Ise 9.63: ................. V.
1981 June TACO{ ................... 1.25% Dnr 9.7. ..................• 54•.
Dec. 15.533 ...................1.13: 1987 hint 902: ..................• 2I':
1982 him 15.01% ................... 57% oft. 8.66: ....................16'.
OK 11444 ................... 1,57% 1988 bum % .................. 1
A. INOCI VALUE The We, ube IN Ike pol" M dslMmiiwq tau inlemnl ale [luny., shat be
q E1cihi,asal rnenpy anaMe rahm an I1, dale tear SbrlieA INmH R+ta n delernined 1M an IM n1,xpeml stn la MAtine am p1 rtle [Hoyt
ad Dthe ^ming nxad7nWe m The date han sterling lnlerd Rate a delemimd .it an the Ub MP,h data TV mulpnl IN 01,41• [Dante,
S. MAIIMUMINIERESTRATECIIMIGES 1MihntstuleslnrAPM.wNMlleantmilimumaminmum ute6mdaUaAanCmmsouMmlpmwnsmnbmeC in par ARM blob,
and Rider, mWArncron x deusn haws on mmmais No Iheindu Thai it achmeb IMWMn at I pemsl nil be Irani im, if ,mete Men. in thenmeduftem in our ARM
Mnm'11 roaet
of $111h single chugom Ih interest rate n0 be may thinpncnhP points m miller Mn all IM indec No hoar mfr.
M O[Xre IMMeM U1, nWnmrtemelh+n Id.SIl:x laAlhin 9-..5.0-4dm Thelnmdme ARM.
6. MIMIMUM INIERESI RATE CHANCE
N 0You, Wntesnt Mle.ill Mpuu x dMrs,eo"it, him ININT The thing, in the Not
of SXYNr Whereas File nW bonus an decrease eneyd thebdel mart man thin=k pncenute Minded.
CHECK IF APNIUBLE
O7. MAROAIORYAN00KKINAL RATE OIANGES Dorsusin our Mneowl eworled by declines in INemea nd alwaysM,lamxi[ -dlnn shy Nmruam la minimum am
midOW Chin{K Hamenr,.Imwn,11mi by irNmse, in Ibeirdet maybe lang"e+l Mr opmer. Ifw Ixes an W tvstme inps+y,v.a„14re rl al+blar mllmxraft ebnee
date. when don{ m mhd copRKT on a Firryan p maim damped in paragraph B M".
O R CIRRYOVER OF IRnlSED INDEX CMKES .
at O Am [hangn b IM torn, not Mow on ta IN 0 a pllicuLr ininnl ale Chine dale will be CaurM me, la the not mIxKl U• :nmry'hl• IIm om harem whw
1 tae bonus his shored mere may Am miainmm file Change lnrauiled 11 oat Mme ht Th Novel", M me axe 1.
?. ..7 bT•The lads her n,ryml Hl Non me mipmme l..... .hx
. ... Y . . -1-.' ti - .. :'!{.':.7'..';, : _• y err, .-/ci :-.,,,y :-'F
•, •,. a ? • ?.. :.. • K-. :'J7•MY.... •V ?• •..?fw. J.1,_ rI V•V.r '4+ ? ? I
Ray Ines of a,, adjustable Rata mallgt
IM[olownsouth" A the terms M ARMY SHOW by n e LlaMed lx uspefoome only. You. ill Lou Other nunli+l inlmmatim in IN dnclmnn nm.mnl and in The We note unit
v_e?tFIICAT_IyCZN
I, SELINA SCHROER, verify that I am a Legal Associate
of FIRST UNION MORTGAGE CORPORATION, a subsidiary ofland mortgage
loan servicer for FIRST UNION NATIONAL HANK, Defendant in the
within action; that I am authorized to make this verification on
defendant's behalf; that the attached Answer of Defendant With
New Matter and Counterclaim is based upon facts of which I have
personal knowledge or information furnished to me by counsel;
that the language of the document is that of counsel and not my
own; and that the facts set forth in the foregoing document are
true and correct to the beat of qry knowledge, information and
belief. I understand that the statements herein are made subject
to the penalties of IS Pa. C.S.Ai §4904 relating to unsworn
falsification to authorities.
Selna Schroer
Leal Associate
First Union Mortgage Corporation
A00/222306/00000. coo
CERTIFICATE QF SERVICE
I, STEVEN J. ADAMS, ESQUIRE, certify that on this date,
I served a certified true and correct copy of the foregoing
Answer of Defendant with New Matter and Counterclaim upon the
following counsel of record, by depositing the same in the United
States mail, postage prepaid, addressed as follows:
Hubert X. Gilroy, Esquire
Broujos & Gilroy
4 North Hanov rest
Carlisle 17
ven J. Adam , Esquire
Date: July 1999
RD /122398/00000.000
c
F=
ul"
4-
_
L,t
I
ALFRED J. LAZAR and
MARIA DELANEY LAZAR,
Plaintiff
V.
FIRST UNION NATIONAL BANK,
Defendant
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
NO. 99 - 3945 CIVIL
: ACTION FOR DECLARATORY JUDGMENT
NOTICE TO PLEAD
To: FIRST UNION NATIONAL BANK:
You are hereby notified to file a written response to the enclosed New Matter within
twenty (20) days from service hereof or a judgment may be entered against you.
Broujos & Gilroy, P.C.
-,W FP
Date
BY _S 2
Hubert X. Gilroy, Es ire
4 North Hanover S eet
Carlisle, PA 17013
Attorney for Plaintiffs,
Alfred J. and Maria Delaney Lazar
ALFRED J. LAZAR and
MARIA DELANEY LAZAR,
Plaintiff
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
NO. 99 - 3945 CIVIL
V.
ACTION FOR DECLARATORY JUDGMENT
FIRST UNION NATIONAL BANK,
Defendant
PLAINTIFF'S REPLY TO NEW MATTER AND ANSWER TO DEFENDANT'S
COUNTERCLAIM WITH NEW MATTER
PLAINTIFF'S REPLY TO DEFENDANT'S NEW MATTER
21
Lazars incorporate and affirm herein Paragraphs 1 through 20 of the Complaint.
22
Admitted.
23
Admitted. By way of further answer, Lazars negotiated with Liberty several loan options
which included both Liberty's fixed and adjustable rate mortgage programs, with the parties
ultimately settling on the Liberty adjustable rate loan.
24
Admitted.
25
Admitted in part, denied in part. Lazars are without knowledge specific to the
requirements of state and federal law regarding the mortgage loan at issue and whether Liberty
complied with said laws. Lazars admit that certain documents were included with the said
notification, but Lazars believe the said documents speak for themselves and Lazars specifically
deny that the said documents accurately described the agreement between the Lazars and Liberty
as to the intended operation of the subject adjustable rate mortgage.
26
Admitted in part, denied in part. Lazars admit that Lazars failed to attach to the
Complaint the loan disclosure statement included in Defendant's Exhibit "A" which is,
presumably, the disclosure statement referenced by First Union in its New Matter Paragraph 26.
Lazars deny First Union's inference that the failure to do so was because the said document
"directly contradicts their current position." Further, Lazars' "current position" is and has been
their only position in this matter since the inception of the subject loan, that is, the subject loan
was to have no minimum floor for the loan interest rate. By way of further answer, Lazars
attached to the Complaint copies of several documents which ostensibly and on their face may
be contrary to the Lazars' position. In fact, the said documents simply do not accurately reflect
the agreement between the parties as negotiated by the Lazars and Liberty in 1989 and reflect a
mistake in the transcription of the agreement, a mistake made by Liberty and which mistake was
not recognized by Liberty or Lazars prior to or at the execution of the said documents.
27
Admitted in part, denied in part. Lazars admit that the said notice and disclosure
statement are attached as an exhibit to First Union's pleading; it is specifically denied, however,
that the said disclosure statement was "missing".
28
Admitted in part, denied in part. The said disclosure statement is a written document
which speaks for itself, but Lazars deny any inference that said disclosure statement accurately
portrays the agreement between Lazars and Liberty. In fact, the agreement between Liberty and
Lazars was that the subject loan was to have no lifetime minimum interest rate "floor".
29
Admitted.
30
Admitted. It is admitted that Lazars did not notify Liberty of the error in transcription of
their agreement at the time up to at execution of the said documents. By way of further asnwer,
Lazars did not notify Liberty of such because Lazars did not realize the error at that time, nor did
Liberty.
31
Denied as stated. The Note, Mortgage and Disclosure Statement are written documents
which speak for themselves. Lazars deny any inference that the said documents accurately
describe the agreement between the Lazars and Liberty, as the agreement between Lazars and
Liberty was that the subject loan was to have no lifetime minimum interest rate "floor".
32
Denied. The decreases in the interest rate of the subject loan below 9.5% by
Commonwealth and Meridian were not in error but, rather, said decreases were consistent with
the agreement between Lazar and Liberty. Commonwealth and Meridian were simply abiding by
the said agreement and effecting interest rate decreases in line with the subject loan "index".
Lazars are without knowledge sufficient to form a belief as to the truthfulness of First Union's
averment regarding loan systems, mergers and acquisitions and otherwise deny the same and
demand strict proof thereof. By way of further answer, attention is directed to Lazars' New
Matter, infra, at Paragraph 44.
33
Admitted in part, denied in part. It is admitted that Lazars did not bring any errors in the
interest rate calculation to the attention of Commonwealth and Meridian as Lazars specifically
deny that Commonwealth and Meridian made errors when Commonwealth and Meridian
decreased the interest rate below 9.5%. Lazars specifically deny that Lazars and Liberty
established an "agreed minimum of 9.5%". Lazars specifically deny that Lazars realized any
error occurred which should have been brought to the attention of Commonwealth and/or
Meridian but, to the contrary, Lazars believed the loan was operating pursuant to the agreement
between the Lazars and Liberty when the said interest rate was reduced below 9.5%. Lazars
further deny taking advantage of any error or that Lazars actions were wrong.
34
Admitted in part, denied in part. Upon reasonable investigation, Lazars are without
knowledge sufficient to form a belief as to when CoreStates first claimed an error occurred in the
said interest rate reductions and demand strict proff thereof. Lazars admit that in 1997
CoreStates asserted to Lazars that the interest rate then being charged on the subject loan was in
error. It is specifically denied that the interest rate decreases below 9.5% were in error, to the
contrary, the interest rate decreases below 9.5% were consistent with the agreement between
Lazars and Liberty, and CoreStates was incorrect in asserting any error.
35
First Union states a conclusion of law which requires no response; by way of further
answer, the averment is denied in that the agreement between Lazar and Liberty provided for no
lifetime minimum interest rate floor.
36
First Union states a conclusion of law which requires no response; by way of further
answer, the averment is denied in that Lazars did not waive their right to be charged the interest
rate contemplated by the agreement between the Lazars and Liberty, further, Lazars pursued this
action promptly upon Lazars being made aware of the error in the transcription and First Union's
failure to abide by the terms of the agreement between Lazars and Liberty.
37
First Union states a conclusion of law which requires no response; by way of further
answer, the averment is specifically denied.
38
First Union states a conclusion of law which requires no response; by way of further
answer, the averment is specifically denied.
WHEREFORE, Plaintiffs seek the relief requested in the Complaint.
PLAINTIFF'S ANSWER TO DEFENDANT'S COUNTERCLAIM
39
Lazars incorporate herein their averments and responses in Paragraphs I through 38.
40
Admitted in part, denied in part. Lazars admit that Lazars paid interest on the said
outstanding loan at times at a rate which was below a rate of 9.5% stated in the Note, the
Mortgage, and the ARM Disclosure Statement, but Lazars specifically deny that the rates paid
between 1993 and 1997 were contrary to the agreement between Lazars and Liberty. To the
contrary, the said rates charged and paid between 1993 and 1997 were consistent with the
agreement between Lazars and Liberty.
41
Admitted in part, denied in part. It is admitted that Lazars did not bring any errors in the
interest rate calculation to the attention of First Union or its predecessors. Lazars deny that they
were paying interest at a rate below that which was allowed by the agreement between Lazars
and Liberty. As the rates paid by the Lazars below 9.5% were proper, Lazars had nothing to
disclose. Further, as soon as First Union became a successor in interest to the subject loan
agreement, First Union coerced the Lazars into paying a much higher interest rate than allowed
by the agreement between Lazars and Liberty - First Union needed no such notification.
42
First Union states a conclusion of law which requires no response; by way of further
answer, the averment is denied. In fact, the Lazars have suffered greatly and unjustly due to the
failure of First Union to abide by the terms of the agreement between Lazars and Liberty.
43
First Union states a conclusion of law which requires no response, otherwise, the
averment is denied. Lazars specifically deny that the interest charged between 1993 and 1997
was improper or that any interest is owed to First Union for the said period.
PLAINTIFF'S NEW MATTER
44
First Union, in its New Matter at Paragraph 32, states that the claimed error in reducing
the subject loan interest rate below 9.5% was due, in summary, to mergers and acquisitions of
Liberty, with the inference being that said reductions were not the actions of Liberty, but its
successors. In First Union's Exhibit "A", the loan notification letter, Liberty's letterhead clearly
includes, "An Affiliate of Commonwealth Bancshares Corporation".
45
When Commonwealth first notified Lazars that the subject loan interest rate would be
reduced below 9.5%, the said notification dated 2/12/92 included the heading "LIBERTY BANK
INCORPORATED AS COMMONWEALTH BANK". A copy of said notification is attached
hereto and marked as Exhibit "A".
46
Notwithstanding the corporate structuring which may have existed at the time and which
Lazars are without specific knowledge of, and with no intention hereby of waiving any other
claims or defenses, Lazars believe and intend to prove through discovery that for all Practical
purposes Liberty and Commonwealth were the same entity at the outset of the subject loan in
1989 and at the time of the initial reductions of the interest rate below 9.5% in 1993.
47
First Union's Counterclaim is barred by the doctrine of truth and justification.
48
First Union's Counterclaim is barred by the doctrine of lathes.
49
First Union's Counterclaim is barred by the doctrine of waiver. Specifically, even
assuming arguendo that First Union's position is correct, in that the interest rate on the subject
loan should not have been reduced below 9.5%, First Union is bound by the actions of its
predecessors in interest to the subject loan. By their actions, First Unions predecessors in interest
waived any right to collect the amounts that First Union is seeking in its Counterclaim. While
not intending to limit the forgoing defense of waiver in any way, Lazars note that, in addition to
other actions of Commonwealth, Meridian, and CoreStates, CoreStates waived any right to the
amounts due under First Union's Counterclaim in a letter to Lazars dated June 11, 1997, a copy
of said letter is attached hereto and marked as Exhibit "B".
WHEREFORE, Plaintiff seeks dismissal of Defendant's Counterclaim.
Date
Respectfully Submitted:
40-
Hubert X. Gilroy, Esquire
Supreme Court I.D. No. 29 43
for: Broujos & Gilroy, P.C.
(Attorney for the Plaintiffs)
4 North Hanover Street
Carlisle, PA 17013
(717) 243-4574
I verify that the statements made in the foregoing document are true and correct. I understand that
false statements herein are made subject to the penalties of 18 PA. C.S. Section 4904 relating to
unswom falsification to authorities.
DATE: /0 IL
AIX-d2.0
LIBERTY BANK
INCORPORATED AS COMMONWEALTH BANK
01087-000-304-6 MORTGAGE LOAN
LOAN NUMBER ARM DISCLOSURE NOTICE
THIS IS AN IMPORTANT NOTICE OF CONTRACTUAL
CHANGES TO YOUR ADJUSTABLE RATE MORTGAGE
ALFRED J LAZAR
MARIA DELANEY LAZAR
455 SAINT JOHNS OR
CAMP HILT.
PA 17011
PROPERTY
LOCATION : 1501 BRAEWOOD DR
01/22/93
STATEMENT DATE
HARRISBURG DAUPHIN CTY PA
THE PAYMENT ON YOUR LOAN, SECURED BY A MORTGAGE ON THE ABOVE REFERENCED
PROPERTY, IS SCHEDULED TO BE ADJUSTED ON THE ADJUSTMENT DATE SHOWN BELOW.
CAREFULLY READ THE FOLLOWING ADJUSTMENTS. IF YOU HAVE ANY QUESTIONS,
PLEASE CONTACT LOAN OPERATIONS AT 800-326-9406 EXT
---------- LOAN INFORMATION ---------- ---- INDEX INFORMATION ----
ADJUSTMENT DATE 03/10/93 CURRENT INDEX VALUE 7.9000
CURRENT PRINCIPAL BALANCE 96,824.01 PREVIOUS INDEX VALUE 9.1500
PROJECTED BALANCE ON CHG DT 95.529.78 BASE INDEX VALUE 9.3100
NEXT ADJUSTMENT DATE 03/10/94 INDEX CHANGE 1.2500-
PYMTS NEW RATE IN EFFECT 12 PREVIOUS CARRYOVER .0034-
ORIGINAL INTEREST RATE 9.5000 NEW CARRYOVER .2534-
CURRENT INTEREST RATE 9.5000 VARIANCE TO THE INDEX .0000
NEW INTEREST RATE 8.5000 INTERVAL MAX RATE CHG 1.0000
MAXIMUM RATE CHANGE 5.0000
CURRENT PAYMENT AMOUNT 978.44
NEW PRINCIPAL E INTEREST 916.35
ESCROW AMOUNT .00
NEW PAYMENT AMOUNT 916.35
BEGIN WITH PYMT DUE ON 04/10/93
NBR OF PYMTS AT NEW AMOUNT 12
PMT NEC TO FULLY AMORT 916.35
IF YOU HAVE ANY QUESTIONS CONCERNING THIS
NOTICE, PLEASE CONTACT THE ORGANIZATION
LISTED ABOVE.
EXHIBIT
9
Perkasie Office
P.O. Box 239
One Hillendale Road
Perkasie, PA 18944
215 453 3300
June 11, 1997
Alfred J. Lazar
Maria Delaney Lazar
455 Saint Johns Dr.
Camp Hill, PA 17011
RE: Adjustable Rate Mortgage Loan Disclosure Notice
Account # 8336383500
Dear Mortgagor(s):
Corestates
Mortgage Services
Corporation
This is to advise you that your adjustable rate mortgage loan is scheduled for an interest rate adjustment
on 03/10/97. This notice contains information which is required by law to be disclosed to you regarding
changes to the interest rate and the monthly payments of your mortgage loan. Please review this notice
carefully and retain it with your other important mortgage documents.
Current Principal Balance
Projected Principal Balance 04/10/97
Original Interest Rate
Current Interest Rate
Current Principal and Interest Payment
LOAN INFORMATION
$ 87067.76
$ 87067.76
9.500%
7.875%
$ 945.21
INDEX INFORMATION
Date Of Index Used For This Adjustment
Current Interest Rate Index Value
Variance To The Index
Prior Index Value*
Effertive Date of Prior Index
Original Interest Rate of a Mortgage is Not Calculated
Using an Index Value
NEW RATE AND PAYMENT INFORMATION
New Interest Rate
Nett' Principal and Interest Payment
Payment Effective Date
Ha%c any questions, please call our Customer Service Department at
1-860-526-3746.
Linda A. Yoder
Customer Service Representative
EXHIBIT
1 (1 3 "- I
01/13/97
7.550%
0.000%
7.740%
00/00/00
8.815%
$ 992.53
04/10/97 E
Perkasie Office
P.O. Box 239
One Hillendale Road
Perkasie, PA 18944
215 453 3300
June I1, 1997
Alfred J. Lazar
Maria Delaney Lazar
455 Saint Johns Dr.
Camp Hill, PA 17011
RE: Adjustable Rate Mortgage # 8336383500
Dear Mortgagor(s):
Corestat"
Mortgage Services
Corporation
Please be advised that effective April 10, 1997, your Adjustable Rate Mortgage was to have a
payment change due to an interest change on March 10, 1997. However, due to a system
error this change did not occur.
To correct the error, we analyzed your mortgage as of the correct interest and payment
change dates. After the proper analyzation of the mortgage, the interest rate increased from
7.875% to 8.875% and the principal and interest payments increased from $945.21 to
$992.53. The difference between the principal and interest that you paid and what the
principal and interest should have been is $47.32. The increase in the rate is because you
have a minimum rate on your loan. There was no minimum on your rate when the
information converted from Meridian Mortgage's system to Corestate's. After reviewing your
Adjustable Rate Note and Rider, a minimum rate of 9.500% was stated. Since a cap of
1.000% exists on each rate change, we are only increasing your rate 1.000% per year until we
have reached the minimum.
From the time your loan was supposed to analyze up to and including your July P?ayment your
loan'will remain at the old interest rate and principal and interest payments. Star 4g with
your August-payment, your monthly payment will increase to the proper interest rate and
principal and interest payment stated above. Your monthly billing statement for your August
payment and the enclosed Adjustable Rate Disclosure Notice will also reflect the new
payment amount.
Please except our apology for any inconvenience this may have caused. If any questions arise,
please call our Customer Service Department at 1-800.526-3746 or my direct line at
215.453-3163.
Sincerely,
Ang S. Uberti
Adjustable Rate Department
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Steven J. Adams, Esquire
STEVENS & LEE
1 I 1 North Sixth Street
P.O. Box 679
Reading, Pennsylvania 19603
(610) 478-2133
Attorneys for Defendant
ALFRED J. LAZAR and MARIA
DELANEY LAZAR,
Plaintiffs
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY,
PENNSYLVANIA
CIVIL ACTION - LAW
V.
FIRST UNION NATIONAL BANK,
Defendant
No. 99-3945
ANSWER OF DEFENDANT TO
PLAINTIFFS' NEW MATTER TO COUNTERCLAIM
Defendant First Union National Bank answers to Plaintiffs New
Matter to Counterclaim as follows:
44. Denied as stated. Paragraph 32 of First Union's New Matter
speaks for itself. It is admitted that with respect to Exhibit "A" to First Union's
New Matter (the "loan notification letter"), Liberty's letterhead states "An affiliate
of Commonwealth Bancshares Corporation." That does not mean that Liberty
State Bank and Commonwealth Bank were one and the same legal entity at that
time. To the contrary, Commonwealth Bancshares Corporation was a bank holding
company, who in January of 1989 owned both Liberty State Bank and
iI
SLI 14289v1Y02995.384
Commonwealth Bank as separate operating banks. Liberty State Bank was not
merged into Commonwealth Bank until January 1, 1992.
45. Denied. Exhibit "A" to Plaintiffs' New Matter is a written
document that speaks for itself. By way of further answer and defense, Exhibit
"A" is not what it purports to be. Rather than being a notification dated 2/12/92,
the notification attached to plaintiffs' New Matter to Counterclaim as Exhibit "A"
is dated January 15, 1993, and relates to loan no. 01087-001-451-4. As stated
above, Liberty State Bank merged into Commonwealth Bank on January 1, 1992.
However, the loan accounting systems of these two separate banks were not
merged until approximately October 1, 1992. After the merging of the accounting
systems, Commonwealth Bank assigned the Lazars' loan a new account number,
being No. 01087-001-451-4. The notification dated February 12, 1992, which is
attached as an Exhibit to Plaintiffs complaint, did not reduce the interest rate
below the minimum 9.5% floor. And while the February 12, 1992 notification did
include the heading "Liberty Bank Incorporated As Commonwealth Bank," such
heading simply reflects the merger of the two separate entities on January 1, 1992,
not the merger of their separate accounting systems. Furthermore, Liberty Bank is
a different name than Liberty State Bank.
46. Denied. It is specifically denied that for all practical purposes
Liberty State Bank and Commonwealth Bank were the same entity in 1989 and in
1993. To the contrary, in 1989 Liberty State Bank and Commonwealth Bank were
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till 14289v I /02995.7 N4
separate banking institutions with separate loan accounting systems. Liberty State
Bank and Commonwealth Bank were only merged on January 1, 1992, and their
respective accounting systems were not merged until approximately October 1,
1992.
47. Denied as a conclusion of law.
48. Denied as a conclusion of law.
49. Denied as a conclusion of law. By way of further answer and
defense, Exhibit "B" is a written document that speaks for itself. To the extent any
actions of First Union or its predecessors constitutes waiver, such waiver was only
intended if plaintiffs agreed that the minimum interest rate under the note was in
fact 9.5%. Further, plaintiffs' claim of waiver is barred by the doctrines of estoppel
and plaintiffs own waiver.
WHEREFORE, defendant First Union National Bank requests this
Court to dismiss plaintiffs New Matter to defendant's Counterclaim and to enter
the relief requested in its Counterclaim.
Dated: January 7 2000
ST NS & LEE
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B
teven J. Adams
Attorney I.D. No. 56293
111 North Sixth Street
P.O. Box 679
Reading, Pennsylvania 19603
(610) 478-2000
Attorneys for defendant
First Union National Bank
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/02995.784
SLI 142890/02995.394
VERIFICATION
I, SELINA SCHROER, verify that I am an Assistant Secretary of
FIRST UNION MORTGAGE CORPORATION, an affiliate of and mortgage loan
servicer for FIRST UNION NATIONAL BANK, Defendant in the within action;
that I am authorized to make this verification on defendant's behalf, and that the
facts set forth in the foregoing document are true and correct to the best of my
knowledge, information and belief. I understand that the statements herein are
made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unswom
falsification to authorities.
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Selina Schroer
Assistant Secretary
First Union Mortgage Corporation
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SLI 14289v1/02995.384
CERTIFICATE OF SERVICE
I, STEVEN J. ADAMS, ESQUIRE, certify that on this date, I served a
certified true and correct copy of the foregoing Answer of Defendant to Plaintiffs
New Matter to Counterclaim upon the following counsel of record, by depositing
the same in the United States mail, postage prepaid, addressed as follows:
Hubert X. Gilroy, Esquire
Broujos & Gilroy
4 North Hanover Street
Carlisle, PA 17013
Steven J. Adams, Esquire
Lam, 2000
Date: January
5
SLI 1438 9 0 /03995.384
ALFRED J. LAZAR and
MARIA DELANEY LAZAR,
Plaintiff
FIRST UNION NATIONAL BANK,
Defendants
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
:NO.1999-3945 CIVILACTION-LAW
STATEMENT OF INTENTION TO PROCEED
TO THE COURT:
The Plaintiffs, Alfred J. Lazar and Maria Delaney Lazar, through their attorneys, Broujos
& Gilroy, P.C., intends to proceed with the above captioned matter.
Respectfully submitted,
Date: L6 b-?' a b4
Hubert X. Gilroy, squire
Attorney for PI ntiffs
Broujos & Gilroy, P.C.
4 North Hanover Street
Carlisle, PA 17013
(717) 243-4574
Supreme Court ID No. 29943
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ALFRED J. LAZAR and
MARIA DELANEY LAZAR
Plaintiffs
FIRST UNION NATIONAL BANK,
Defendants
TO THE PROTHONOTARY:
: IN THE, COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 1999 -3945 CIVIL
PRAECIPE
Please mark the above captioned action discontinued and withdrawn.
DatTG
Hubert X. Gilroy, Es lire
Attorney for Defef? ant
Broujos & Gilroy, PC
4 North Hanover Street
Carlisle, PA 17013
717-243-4574
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