-
May 18, 2026
Pennsylvania Courts Continue to Limit Motions to Reassess Damages in Mortgage Foreclosure Actions
The Philadelphia Court of Common Pleas has been strictly applying the Pennsylvania Superior Court’s decision in EMC Mortgage, LLC v. Biddle, when denying lenders’ efforts to reassess damages after judgment where the mortgage documents do not expressly preserve those rights post-judgment. It is common practice for foreclosure attorneys to file motions to reassess damages post default judgment at the request of the creditor, but the Philadelphia Court of Common Pleas has been routinely denying these motions lately, even unopposed, under the EMC Mortgage precedent..
In recent Philadelphia hearings on these motions to reassess, the Court has been denying lender’s motion to reassess damages seeking to add pre-judgment interest, attorney’s fees, escrow advances, property preservation expenses, and inspection costs that were not included in the original foreclosure complaint. The Court specifically relied upon EMC Mortgage, LLC v. Biddle, 114 A.3d 1057 (Pa. Super. 2015), holding:
Lenders may not reassess pre-judgment interest and costs after judgment is entered. EMC Mortgage, LLC v. Biddle … lenders must amend complaint before taking default to recover pre-judgment interest and costs not included in complaint.
The underlying EMC decision remains one of the leading Pennsylvania appellate cases addressing reassessment of damages following entry of a foreclosure judgment. While the Superior Court recognized that trial courts possess equitable authority to amend a judgment before satisfaction, it sharply limited the categories of recoverable amounts that may be added post-judgment.
1. The Core Issue: Merger of the Mortgage Into Judgment
The central concept driving the Court’s analysis is merger. Once a foreclosure judgment is entered, the mortgage contract generally merges into the judgment. After that point, the lender is no longer merely enforcing contractual mortgage rights; it is enforcing the judgment itself.
Relying upon longstanding Pennsylvania law, the Superior Court explained that:
The doctrine of merger of judgments thus provides that the terms of a mortgage are merged into a foreclosure judgment and thereafter no longer provide the basis for determining the obligations of the parties.
The Court further recognized only a narrow exception:
Parties to a mortgage may rely upon a particular provision post-judgment if the mortgage clearly evidences their intent to preserve the effectiveness of that provision post-judgment.
Accordingly, courts now focus heavily on whether the mortgage documents expressly preserve post-judgment rights to collect interest, attorney’s fees, advances, inspections, escrow items, and related charges.
2. Why the Distinction Between Pre-Judgment and Post-Judgment Charges Matters
The Philadelphia ruling reflects a growing judicial emphasis on the distinction between:
- amounts accrued before judgment; and
- amounts incurred after judgment in pursuit of execution or foreclosure remedies.
Under EMC, if additional interest, escrow advances, late charges, inspections, or similar costs accrued before judgment but were not included in the complaint, the lender generally cannot recover them later through a motion to reassess damages. Instead, the lender should amend the complaint before entering default judgment.
The practical effect is significant. A lender cannot enter judgment based upon stale complaint figures and later seek to “true up” months or years of accrued amounts through a reassessment motion. The Complaint should expressly state the amount due or be amended to reflect the amount due prior to entry of default judgment.
3. The Court’s Category-by-Category Analysis
a. Post-Judgment Interest
The Superior Court recognized that post-judgment interest at the contractual rate may survive merger — but only where the mortgage and note expressly preserve that right after judgment.
In EMC, the mortgage contained language stating that the contractual interest rate would continue after judgment. However, the lender failed to properly support its request in its Motion to Reassess because:
- the note was not in the record of the Motion to Reassess;
- the applicable interest rate was not adequately established;
- the lender failed to identify the operative dates; and
- the calculation methodology was unclear.
The Superior Court therefore vacated the reassessed interest award.
The lesson is clear: even where survival language exists, lenders must still establish the contractual basis and calculation through competent evidence.
b. Attorney’s Fees and Title Costs
The mortgage in EMC expressly permitted recovery of expenses incurred in pursuing foreclosure remedies, including attorney’s fees and title costs. The Superior Court held that such provisions survived judgment because the documents clearly evidenced the parties’ intent that those obligations continue through foreclosure enforcement.
However, the Court sharply criticized the lender’s evidentiary showing. The lender merely submitted lump-sum fee requests without invoices, billing records, affidavits, or proof of reasonableness.
The Court emphasized that reassessed fees must still satisfy reasonableness standards and be supported by evidence demonstrating:
- the work performed;
- the time expended;
- the applicable rates; and
- the necessity of the services.
c. Late Charges
The Court treated late charges differently from attorney’s fees and interest.
Once judgment is entered, the borrower is no longer obligated to make ongoing monthly mortgage payments under the merged mortgage. As a result, absent express survival language, there is no continuing basis for post-judgment late fees.
The Superior Court therefore rejected recovery of additional late charges.
d. Escrow Advances, Property Inspections, Insurance, and Preservation Expenses
The Court also rejected the notion that protective advances automatically survive judgment.
Although the mortgage authorized the lender to make expenditures for taxes, insurance, inspections, and property protection, the mortgage did not expressly state that those obligations survived entry of judgment.
The Court therefore required the lender to demonstrate:
- whether the expenditures were incurred before or after judgment;
- whether the expenses were necessary to pursue foreclosure remedies;
- what work was actually performed;
- when it was performed; and
- the actual amounts paid.
Without that evidentiary showing, reassessment was improper.
4. Practical Implications for Lenders and Servicers
Philadelphia courts appear to be applying EMC more aggressively in recent Motions to Reassess. Motions to reassess damages are increasingly scrutinized for:
- attempts to recover pre-judgment amounts not pleaded in the complaint;
- inadequate contractual survival language;
- insufficient evidentiary support; and
- unsupported or conclusory fee calculations.
For lenders and servicers, several practical considerations follow:
- Foreclosure complaints should be updated before default judgment if additional interest, advances, or recoverable amounts accrue.
- Notes and mortgages should expressly preserve post-judgment rights to;
o contractual interest;
o attorney’s fees;
o title costs;
o escrow advances;
o taxes and insurance;
o inspections and preservation expenses; and
o collection and execution costs.- Reassessment motions should be supported with detailed evidentiary submissions, including affidavits, payment histories, invoices, and itemized calculations.
- Courts may require evidentiary hearings where factual disputes exist concerning the nature or reasonableness of the claimed amounts.
Authors: Michael Shavel and Jill Fein
