466 F.3d 273 (3rd Cir. 2006), 04-1951, Delta Funding Corp. v. Harris

Docket Nº:04-1951.
Citation:466 F.3d 273
Party Name:DELTA FUNDING CORPORATION v. Alberta HARRIS, Appellant.
Case Date:October 03, 2006
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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Page 273

466 F.3d 273 (3rd Cir. 2006)

DELTA FUNDING CORPORATION

v.

Alberta HARRIS, Appellant.

No. 04-1951.

United States Court of Appeals, Third Circuit.

October 3, 2006

Argued: May 10, 2005

On Appeal from the United States District Court for the District of New Jersey D.C. Civil No. 02-cv-04080, District Judge: Hon. John C. Lifland

Madeline L. Houston (Argued) Houston & Totaro Bloomfield, Attorney for Appellant

Alan S. Kaplinsky Martin C. Bryce, Jr. (Argued) Ballard Spahr Andrews & Ingersoll, LLP Attorneys for Appellee

Baher A. Azmy Andrew McNally Erin Kahn Steven Klutkowski Seton Hall Law School Center for Social Justice Attorneys for Amici Curiae, American Civil Liberties Union of New Jersey, New Jersey Institute for Social Justice, New Jersey Citizen Action Coalition, New Jersey Public Policy Research Institute, American Association of Retired Persons, and National Association of Consumer Advocates in Support of Appellant Alberta Harris

Before: SLOVITER, FISHER and ALDISERT, Circuit Judges

OPINION

SLOVITER, Circuit Judge.

This matter is before us following issuance of an opinion by the Supreme Court of New Jersey in response to a question of law that we certified to it.1 See Delta Funding Corp. v. Harris, No. 04-1951, 2005 U.S. App. LEXIS 24531, at *13-14 (3d Cir. July 27, 2005). A brief summary of the background and issue is called for.

In 1999, Alberta Harris, a 78-year-old African-American woman with a sixth-grade education and very little financial sophistication, entered into a mortgage loan contract with Delta Funding Corporation, a lender specializing in the sub-prime market.2 Under the contract, Delta provided Harris with a $37,700 loan secured by a mortgage on her house. Harris owned her home outright and had lived in it for more than thirty years. Harris's only basis for financial support in 1999 was the social security payment of approximately $900 per month. The annual percentage rate on the Delta loan was 14%, resulting in monthly payments of approximately $444.44; nearly half of Harris's monthly income. Delta subsequently assigned the loan to Wells Fargo as trustee.

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Harris was unable to afford the required monthly payments and Wells Fargo instituted a mortgage foreclosure suit against her in the Superior Court of New Jersey, Essex County, Chancery Division.

The loan agreement contains an arbitration provision that allows either party to elect binding arbitration as the forum to resolve covered claims. In response to Wells Fargo's mortgage foreclosure action, Harris filed an Answer and Counterclaim and a...

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