There are several ways to stop a sheriff’s sale in Ohio. This post discusses several ways to stop a sheriff’s sale with plenty of good information to help you understand your options.
A loan modification is a great resource to prevent homeowners suffering from a financial emergency from falling behind on their mortgage payments and becoming a victim of foreclosure...
Foreclosure is the legal process of a lender enforcing the mortgage against the property of a homeowner or landlord. If you are a tenant, you probably make routine payments to the landlord for the property you are renting.
Rick Slorp alleges that BAC Home Loans Servicing, L.P. and its attorneys at Lerner Sampson & Rothfuss LLP (LSR) created and submitted multiple fake versions of his promissory note to use as evidence against him in a foreclosure lawsuit.
New Flex Modification Program Will Replace HAMP
The Home Affordable Modification Program (HAMP) that helps homeowners avoid foreclosure by adjusting interest rates and modifying loans expired at the end of the year. A new Flex Modification program will replace HAMP starting in 2017.
The new Flex Modification program is designed to cut back on monthly mortgage payments when homeowners are experiencing financial hardships and behind on their mortgage. Some homeowners are expected to receive up to a 20% payment reduction on their mortgage. Introduced by Fannie Mae and Freddie Mac, the Flex Modification foreclosure prevention program is supposed to be adaptive to regional differences and the ever-changing housing market.
Fannie Mae and Freddie Mac are government enterprises developed by Congress to help loan servicers convert assets to cash, a concept known as liquidity. To do this, Fannie Mae and Freddie Mac buy mortgages from lenders and loan servicers. The lenders then take the profit from selling the mortgages and relend it to other consumers buying a home or property. The government enterprises help lenders have an affordable supply of monetary funds to distribute in mortgage loans around the United States.
Flex Modification is expected to help lenders, homeowners, taxpayers, Fannie Mae, and Freddie Mac save money by avoiding the expensive and long foreclosure process. If you are having financial difficulties and struggling to pay your mortgage payment in full every month, a loan modification may be able to help you keep your home. Contact a foreclosure defense lawyer at Doucet & Associates Co., L.P.A. at (614)944-5219 for legal assistance securing a loan modification today.
Doucet & Associates 10th District Win for Church Client
Doucet & Associates Co., L.P.A. attorney, Andrew Gerling, maintained a $62,000 jury verdict in the 10th District appellate court for a local church. The church first received the $62,000 in damages in the Franklin County Common Pleas Court for a breach of contract over a commercial property.
The Fathers House International, Inc. purchased the commercial property with intent to build a new church. The Pastors of the church met with the defendant and modified the contract to keep monthly payments from rising after the first year. The Pastors and defendant also agreed the property could be used for other projects.
Later the church joined with the YMCA, the City of Columbus, and the Community Shelter Board and developed plans to operate a homeless shelter on the property. The defendant wrote a letter of confirmation for the church to lease the property and verified accurate payments had been received.
Despite the modification and letter, the defendant later went back on the deal by demanding more money than he was entitled to under the new contract agreement. Attorney Andrew Gerling first successfully defended the Fathers House International, Inc. in a breach of contract lawsuit and upheld the verdict during the appeal.
If you have had a foreclosure lawsuit unlawfully filed against you contact Doucet & Associates Co., L.P.A. at (614)944-5219 for legal assistance.
Trash Out – Lock Out
It is illegal for a mortgage company or lender to remove a borrower’s personal belongings from a property and change the locks before the foreclosure process is complete. This action is called a “trash out” or “lock out”.
In Ohio, a lender has to wait 120 days after one missed payment to send a borrower a foreclosure notice. Then the borrower has 28 days to reply to the lawsuit or face default judgment. During this time the borrower is allowed to continue living at the property.
The lender has to notify the borrower through the sheriffs office when they are required to move – which occurs when the property is sold. Usually the borrower is not required to move out during the foreclosure process until the property has been sold. The property could have been sold by the consumer, an approved short sale, or through a sheriff sale.
The property becomes a sheriff sale if the borrower loses the lawsuit or faces default judgment. The borrower may continue living on the property until after confirmation of a sale. This could be a day or a couple months depending on how long it takes for the property to sell.
After confirmation of the sale, a writ of possession is filed. At this time the lenders will notify the borrowers of a move out deadline. If the borrowers fail to move out by the deadline, then the lenders have the right to hire a trash out company to remove the remaining possessions and change the locks for the new owner.
Servicemembers Civil Relief Act (SCRA)
The Servicemembers Civil Relief Act (SCRA) protects active duty military personnel and their immediate families from financial hardships and a variety of legal issues. The SCRA protects people involved in the United States armed forces, the national guards, public health services, and other administrative positions. Active duty personnel must request protection services from an armed forces legal assistance office.
Active duty personnel may request reduced interest rates on a mortgage, credit card, automobile loans, or other loans through the SCRA. Interest rates are reduced to at least six percent and are allowed to be applied to monetary obligations obtained before active duty. Credit reporting agencies and lenders cannot use approved SCRA reduced rates in a harmful way to lower a consumer credit score.
People receiving protection through the SCRA are not allowed to be evicted from a rental property without a court order. The average rental property that is protected under these rights are around 3,000 dollars a month and change a little every year. The SCRA also protects the right to judicial relief to postpone a civil court issue at least 90 days with court approval. Active duty personnel may also request a civil court case to be reopened if failing to appear in court due to temporary relocation. Criminal court proceedings are not protected under judicial relief.
People selected for active duty positions requiring deployment more than 90 days have the right to request termination of a property lease without penalties. Residential and business properties are protected and filing for termination can take place before leaving or during active duty if extended. Termination of a car lease is possible if active duty position requires deployment for 180 days.
If an active duty position effects a person’s ability to pay mortgage rates on a housing contract, the SCRA can provide legal assistance to keep a property from foreclosing. Mortgage companies must receive a court order to file foreclosure on the home of military personnel involved in active duty. Automobile companies must also receive a court order to repossess a vehicle for missed payments.
Military personnel required to move from their home state is provided state tax relief under the SCRA. A person may request to continue paying the taxes of their home state on military income and personal property. Military personnel are also allowed to reinstate cancelled insurances without penalties after ending an active duty term. Insurances may include health insurance, life insurance, home insurance and other plans.
Doucet & Associates Co. L.P.A. in Ohio helps people enforce rights based on the SCRA. Please contact us today if you or someone you know needs help.
Most people looking for help to defend foreclosure are not deadbeats. They are solid, sincere people who want to get back on track after facing some kind of financial catastrophe. It could be job loss, injury, illness, or a death in the family. Our clients need just a little bit of help because the big banks and gigantic mortgage companies are just too big or too uncaring to lift a finger to help. Time and again, people call our office because they want to get their lives back after having gotten nowhere with their mortgage company. Doucet & Associates Co., L.P.A. defends foreclosure to meet our clients’ objectives. That means we enter appearances in court and fight back. We hold the mortgage company accountable for its failures. We believe that just because someone is going through a tough time in life does not mean the bank gets to walk all over you. Our law firm is known for our aggressive representation and no-nonsense approach to fighting the big banks.
The resolutions we reach for our clients are varied and could be as simple as reaching a deal to begin making regular payments, or as complex as walking away from an unaffordable home without owing anything further. Other times, our client wants to fight the case to the end to find justice, and we are not afraid of trial. Sometimes credit report correction is part of a resolution too. Usually the bank pays some of our attorneys’ fees.
If you are facing foreclosure, or are at risk of foreclosure, call our office today at (614) 944-5219. We travel around the state helping families and prefer to get involved early in the process. Bookmark this page so you can find us later. Even if you have not yet been served with the lawsuit, give us a call. If you wait until the sale, it may be too late for us to help.
On Sunday, people in the United States of America will gather to reflect on a tragic time in our nation’s history. Honoring the innocent lives that were taken that day and remembering those who emerged to serve and offer assistance when our nation was experiencing tragedy represents the best of our country. Recollecting the facts of that day in 2001 is important for our nation to recall a time of standing together for all that were directly and indirectly affected.
The terrorism by an Islamic extremist group brought upon our country that day involved four plane crashes. Two hijacked planes were flown into the Twin Towers of the World Trade Center in New York City. A third plane struck the Pentagon at the U.S. military headquarters in Arlington, Virginia. And the fourth crashed down in a field in Shanksville, Pennsylvania. Including heroic police officers, firefighters and civilians, over 3,000 lives were loss that day in tragic destruction.
In replace of the World Trade Center towers that were traumatically destroyed now stands the One World Trade Center. This building is also commonly referred to as the Freedom Tower and is now the tallest skyscraper in the Western Hemisphere standing at a 1,776 feet. The height is iconic and meant to resemble the year the Declaration of Independence was enacted. In May 2013, a spire was also positioned on the top of the building to ensure it was the tallest building with the highest point making the height at the tip an estimated 1,792 feet. September 11 is also now legally designated as Patriot Day.
There are many national events happening on Sunday in recognition of this devastating occurrence. The most common that often take place country wide include the moments of silence.
- 8:46 am The first plane crashed into the North Tower at the World Trade Center.
- 9:03 am The second plane crashed into the South Tower at the World Trade Center.
- 9:37 am The third plane crashed into the Pentagon in close proximity to Washington D.C.
- 10:03 am The fourth plane crashed in Pennsylvania after passengers on board take control from hijackers after learning of the other attacks.
- 10:28 am The North Tower collapses and rescue effort begins.
Locally in Columbus, Ohio there are also many events taking place to help honor and remember everyone impacted. Some of the events included but are not limited to are:
There is the Memorial Stair Climb taking place at the Chase Tower in downtown Columbus.
The Heroes Run on September 10 at Alum Creek Park North.
A Memorial Flag Display at the Ohio Statehouse.
The Ruc. Run. Remember. race in Groveport, Ohio.
There are many more local events happening all around Columbus, Ohio. We welcome you to leave information about an event in the comments to inform and bring awareness of how our country is coming together. Doucet & Associates also would like to acknowledge our heartfelt condolences to everyone affected.
Fighting Default Foreclosure Judgments in Ohio
Fighting a Default Foreclosure Judgment is a difficult task, but you have options.
If a court has entered an order on foreclosure against you recently, it is time to act. You may be able to either vacate or set aside the judgment, but your options are time sensitive. When it comes to motions to vacate and to set aside the judgment, trial courts can lose jurisdiction to help you if you do not act timely. One of the maxims of the law is “the law serves the vigilant, and not those who sleep on their rights.” This is especially true in post-judgment proceedings. When dealing with post judgment reconsideration, there are generally two methods that are useful at the trial court level (the court that entered the foreclosure judgment against you) – a motion to vacate based on a failure of the bank in bringing their case, and a motion to set aside the judgment and allow you to reenter the case based on certain criteria such as newly discovered evidence or excusable neglect. You are essentially asking a sitting judge to undo either the complete foreclosure judgment or a portion of what he or she entered.
Motion to Vacate a Foreclosure Judgment
If the bank has failed to follow the proper procedures and Civil Rules when they bring their case, the court can vacate the judgment. This means that the judge sets aside the judgment as if it never happened. If the bank wants to continue the foreclosure, they have to initiate a new case from the beginning. There are two main reasons that a court will vacate a default judgment: (1) excusable default and (2) lack of personal jurisdiction. Excusable has two parts: (1) a reasonable excuse for not filing an Answer within the 30-day time; and (2) a meritorious defense (a good defense).
Excusable Default: Common examples of a reasonable excuse are you were ill, incarcerated, or that you could not answer the Summons for some other good reason. You would also have a reasonable excuse if, in response to the Summons, you telephoned the attorneys for the plaintiff and they told you not to bother filing an Answer. A meritorious defense is a reason why you don’t owe the money, not a reason why you can’t pay. For example, you would like to use the defense of statute of limitations. You can also dispute the amount of the debt. Disputing the amount of the debt, combined with improper service, can be a sufficient reason for the court to grant an order vacating the default judgment.
Lack of Personal Jurisdiction (Improper Service): The court can also vacate a default judgment if you were not properly served with a Summons. If you seek to vacate a judgment because of improper service, you do not need to cite a meritorious defense (or any defense). The disadvantage of seeking to vacate a judgment on the grounds of improper service is that you have the burden of proving the bad service, which you must do at a hearing before the judge. Proving improper service can be difficult depending on the facts of your case.
Motion to Set Aside a Foreclosure Judgment
If there is a good reason why you were simply unable to respond to the bank’s lawsuit before the judgment, you can file a motion to have the court set aside the default judgment. Here, you are asking the judge to set aside your default judgment: because of your mistake, inadvertence, surprise, or excusable neglect; because of the other side’s fraud, misrepresentation, or other misconduct; because the judgment has been satisfied, release, or discharged; or because other reasons of justice and equity require it.
In Ohio, the rule for setting aside a default judgment is explained in GTE Automatic Elec., Inc. v. ARC Industries, Inc. The GTE test says that (1) you must have a meritorious defense, (2) you are entitled to relief under Civil Rule 60(B), and (3) the motion is made within a reasonable time and, for reasons under Civ.R. 60(B)(1)-(3), not more than one year after the judgment was entered.
If you can show that you meet each element of the GTE test, the court can set aside the default judgment and allow you to reenter the case as if the deadline had not passed. This means you can then file an Answer and your defense, and the case will proceed from there.
Act quickly to protect yourself from a Default Foreclosure
If you find yourself facing a default judgment from a bank in a foreclosure lawsuit, you should act quickly to protect your interests and your home. Your best option is to get an attorney on your side to review everything and present you case to the court. Contact Doucet & Associates to help ensure that your rights are protected.
Banks Must be Cautious with Conditions Precedent: the Alliterative Way to Defend against Foreclosure
Put simply, foreclosure is a contractual remedy to a breach (i.e. default) on a note that is secured by a home. Thus, in order for the bank to succeed in a foreclosure action, it must prove the elements for a breach of contract. In Ohio, to prevail on a breach of contract claim, the plaintiff must prove:
- The existence of a valid contract;
- That the plaintiff performed their obligations under the contract;
- That the defendant did not perform their obligations; and
- Injury resulting from the defendant’s breach.
Conditions precedent stem from the second prong. Many notes or mortgages will require notice of a default and/or acceleration. If a note or mortgage has such a notice clause, the lender must comply with the notice terms or the complaint may be dismissed. Further, certain federal regulations issued by the Secretary of Housing and Urban Development (HUD) may impose additional requirements on the party seeking a foreclosure.
In BAC Home Loan Servicing, LP. v. Taylor, the Ohio Ninth District Court of Appeals held that the bank’s failure to comply with HUD’s regulations could be successfully used as a defense against a foreclosure action. The Taylors’ note and mortgage were subject to the HUD regulations for default and acceleration, and on appeal, they submitted affidavits that no attempt had been made for the required face-to-face meeting, while conversely BAC offered no contradictory evidence. Thus, the court reversed the trial court and found a genuine issue of material fact as to whether BAC had performed all conditions precedent in order to continue with foreclosure.
This ruling is in line with many other Ohio appellate courts and stands for the notion that the foreclosing party must comply with all of the conditions of the note and mortgage contract, or the homeowner may successfully defend against the foreclosure action.
Jarupan v. Hanna, 173 Ohio App.3d 284, 2007-Ohio-5081.
 Fifth Third Mtge. Co. v. Bell, 2013-Ohio-3678.
 See 24 C.F.R. §203.604, which requires a face-to-face meeting or a reasonable attempt for a face-to-face meeting prior to foreclosure.
 BAC Home Loan Servicing. LP v. Taylor, 2013-Ohio-355.
 Id. at ¶ 21.
 See Wells Fargo v. Phillabaum, 192 Ohio App.3d 712, 2011-Ohio-1311, ¶ 11 (4th Dist.); Wells Fargo Bank, N.A. v. Isaacs, 1st Dist. No.C-100111, 2010-Ohio-5811, ¶ 10; U.S. Bank, N.A. v. Detweiler, 191 Ohio App.3d 464, 2010- Ohio-6408, ¶ 53 (5th Dist.); Washington Mut. Bank v. Mahaffey, 154 Ohio App.3d 44, 2003- Ohio-4422, ¶ 22 (2d Dist.)
Robo-signing: A still present problem for homeowners
“Robo-signing”. Most homeowners are aware of the term as a type of fraud that involved banks and mortgage servicers colluding to fabricate false documentation. The servicer would fashion legal documents of property ownership they did not have in order to initiate foreclosures on properties. Countless homeowners lost their homes when these documents were filed with the foreclosure action as “true and accurate” documents before the courts.
There was an attempt at culpability for this debacle that ultimately resulted in a $25 billion National Mortgage Settlement among the five leading mortgage servicers. Robo-signing never should have happened in the first place, but most of America was given the impression that the settlement was the end of it.
However, writer David Dayden of the financial news and analysis blog Naked Capitalism asserts that robo-signing has continued to this day. Dayden presents as proof an email sent to a former mortgage industry loan officer-turned-licensed private investigator specializing in securitization and chain of title analysis. This former mortgage industry insider is often called upon as an expert witness in foreclosure defense lawsuits. The email came from a document services provider working for large mortgage firms. The sender promises clients “peace of mind” that if documents are missing in a mortgage recording, their highly-trained researchers will locate and record these documents. In doing so, they create plausible deniability for fabrication of mortgage records.
The email to the former loan officer turned investigator requests a signature for an assignment of mortgage from the investigator. The investigator informed Dayden this isn’t the first time he’s been solicited for such a request. He theorizes that these companies are attempting a form of mutually assured destruction. If they can get him to sign on a forged record, it would indicate he is complicit in foreclosure fraud and tarnish his reputation and credibility as an expert defense witness. Alternatively, he posits that maybe they really did just need someone to help produce this mortgage assignment, and his name came up because he’d previously worked for the bank that needed it.
However, it’s likely worth noting that this same company was just fined $1.6 million in restitution and civil penalties by the Consumer Financial Protection Bureau for not honoring modifications for loans transferred to them by other servicers.
The investigator initially feigns ignorance. He asks for more information from the firm. The company responds by again indicating that an assignment is needed to show the bank assigned the loan over to the services firm. The “team lead” who had been communicating with the investigator attached a copy of the mortgage – which included confidential information that likely violated privacy laws.
The investigator then asks for a “prepared assignment,” which is a template from the company to fill out. Company responds with an attachment with blanks for investigator to fill in. It’s pre-signed and pre-notarized, with amounts that differ from the actual note (indicating the company wanted the document to appear as if it was first created in 2002).
Dayden characterizes this as “solicitation to commit a felony,” specifically, to fabricate a mortgage document. The investigator says that by “recreating chains of title,” they are dumping “garbage” into the courts daily.
Catching this kind of flaw in the chain of documentation requires the help of an attorney who is familiar with the intricacies of the foreclosure process and can spot irregularities. The firm of Doucet & Associates specializes in foreclosure defense. If you are facing foreclosure, call Doucet & Associates to schedule a consultation and let us help you save your home.
Defending Foreclosure: The Basics and How to Use Them
Receiving a court summons for foreclosure is frightening. You find yourself pondering questions you never thought you would encounter. Can you save your home? Will your credit report be affected? Where will your family live?
The bank is telling the court that it has a right under the mortgage to foreclose on you. However, keep in mind that you have rights too, and it is legal, ethical, and smart to assert all of your rights with the help of an attorney when facing foreclosure.
Efficient foreclosure defense can allow you to stay in your home while you litigate your case, and we help many of our clients to save their home. However, if you are looking at other options, we can also help you obtain a deficiency judgment waiver in the situation that you leave your home, such as in a foreclosure sale, short sale, or deed in lieu of foreclosure agreement. We also help many clients to apply for and obtain a loan modification that reduces their principal, interest rate, and monthly payment.
Some of the defenses that experienced foreclosure defense attorneys employ to delay or dismiss foreclosures are:
Failure of Condition Precedent
The terms of the Note, Mortgage, and federal guidelines generally require specific steps the bank has to take before it can begin a foreclosure. If the bank fails to comply with the requirement to serve the homeowner with notice of default or to conduct necessary meetings with the homeowner, the court may dismiss the foreclosure.
Lack of Standing
When foreclosure proceedings begin, a lawsuit must be filed and served against you. You become the defendant, and the bank is the plaintiff. The bank must demonstrate to the courts they are the party legally entitled to foreclose on you. This is the legal concept of “standing”. You can bring the plaintiff’s standing into question as a foreclosure defense, and they must prove that they have the standing to foreclose. As the news has shown over the last several years, ownership of a mortgage can be a complicated thing with most loans being securitized, bought and sold multiple times. The bank’s errors, improper or incomplete documentation, or fraud may cause them to have a hard time proving their standing. If they can’t prove it, the lawsuit may be dismissed.
Unfair Lending Practices
If your bank has been deceptive about your loan, acted unfairly, or failed to disclose required information, you may be able to challenge foreclosure based on these bad acts. The Truth In Lending Act (TILA) requires lenders to disclose a great deal of information, including the annual percentage rate, payment schedule, and other information about the loan. Lenders who do not give borrowers the correct information TILA requires have broken this law.
There are many other defenses that may be raised, such as unconscionable terms, foreclosing on an active service member, and failure to properly invoke the court’s subject matter jurisdiction. But a homeowner can’t use one of these foreclosure defenses if they don’t know the defense exists or how to properly raise it. There are federal and state laws intended to protect homeowners, and those defenses can delay or dismiss foreclosure proceedings.
If you find yourself facing a bank in a foreclosure lawsuit, you know they have their attorneys working to protect the bank. Your best option is to get an attorney on your side to review everything and protect your interests. Contact Doucet & Associates to help ensure that your rights are protected.
Watch Out for the Dotted Line!
This week, the Ohio Sixth District Appellate Court in Toledo dismissed a consumer’s appeal after he claimed he was convinced to sign a consent agreement with the property owner through fraud because he had entered into a contract that barred his case. The lesson to learn from the Sixth District is to be aware of what you sign and how it can affect you into the future.
Charles Hanson was living in a house when Flex Property Management purchased it at a sheriff’s sale. Flex Property gave notice to Mr. Hanson to leave the property, and was directed to vacate by the end of February 2015. Mr. Hanson, representing himself pro se, entered into settlement agreement with Flex Property outside the courtroom. In exchange for $1000 cash, receiving a pre-approval letter from the bank, and an appraisal on the home, Mr. Hanson was permitted to stay in the house and make an offer to purchase. Mr. Hanson signed a consent judgment in April 2015 that was sent along with a drafted purchase agreement for the property.
However, when the two sides returned to the court, Flex Property filed the consent judgment and, according to Mr. Hanson, this showed that Flex Property had no intention of allowing him to purchase the property. With the consent judgment duly filed, the court informed Mr. Hanson that he would be removed from the house on May 30, 2015. Mr. Hanson appealed the court’s order.
The Sixth District court dismissed Mr. Hanson’s appeal.
The key issue identified by the Appellate Court is that a consented judgment entry or settlement agreement is a binding contract between the parties. Generally, one cannot appeal a contract. Since Mr. Hanson did not expressly reserve the right to appeal in the terms of the consent agreement, he was barred from contesting the judgment in that fashion.
Since the fraud that Mr. Hanson alleged to Flex Property occurred outside the courts, there is no evidence of it on the record. As such, Mr. Hanson could not argue the fraudulent inducement claim in a direct appeal either. Instead, the Sixth District instructed that Mr. Hanson would have to petition the court to set aside the judgment under Ohio Rule of Civil Procedure 60(B) and make that case to the trial court. This is a more difficult process than a direct appeal.
Realize that when you sign something, you are likely forming a contract with the other party. Mr. Hanson represented himself and entered into two contracts with Flex Property: the settlement agreement & the consent judgment. Without realizing it, he had given up some of his rights and limited his options for the future.
A contract does not need to be a formal document that reads “Contract” at the top, or have “Wherefores” and “Therefores” sprinkled throughout. If the essential legal elements of a contract (offer, acceptance, and consideration) are met, the court will likely deem an agreement a legally binding contract.
Before you sign anything, ensure that you understand the consequences of each term and element. If you are across from a bank or property management company, you know they have had their attorneys make sure their rights and options are well protected. The best option is to get an attorney on your side to review everything and protect your interests. Contact Doucet & Associates to help ensure that your rights are protected.
Read the decision [Capital Income & Growth Fund, L.L.C. v. Hanson, 2016-Ohio-2973]
Defending Against Foreclosure: Notice Requirements & Certified Mail
If the bank wants to foreclose on a home, often if must send one or more letters via certified mail to the borrower. If the bank fails to do this, it can be a solid defense to foreclosure for the homeowner. Knowing if the bank is required and has not done so can help save your home and possibly get the foreclosure dismissed.
When a bank files for foreclosure, there are certain actions the bank has to have taken to comply with this contract formed by the mortgage and the note. These actions are known as “conditions precedent.” Specifically, a condition precedent is an event which has to occur before the title (or other right) to the property will actually be in the name of the party receiving title. That is to say, these are the actions the bank must take before they legally claim ownership of the property mortgaged.
One important condition precedent is the notice requirement. When the borrower misses a payment, the bank needs to inform the borrower that he is behind. Or when the bank wants to accelerate the loan and declare the outstanding balance due, the bank needs to tell the borrower that this has occurred. It is common that these notices are required to be sent and delivered by certified mail. One of the most critical parts of certified mail is the proof of delivery.
Every mortgage should contain a clause inside it that details when and how the bank needs to inform the borrower that they are in default. One example of a such a clause would be that notice is to be given “by mailing such notice by certified mail addressed to Borrower at the Property Address * * *. Any notice provided for in this Mortgage shall be deemed to have been given to Borrower or Lender when given in the manner designated herein.”
Therefore, the conditions precedent under the mortgage are that the bank must both provide notice to the borrower and that this notice must be sent by certified mail. In Childers, the court reversed a grant of summary judgment in favor of the homeowner when there was no evidence provided that the notice required by the mortgage had ever been mailed. Contimortgage Corp. v. Childers (May 4, 2001), Lucas App. No. L-00-1332.
In Ohio, the courts have found that the failure of the bank to satisfy the certified mail condition precedent requirement is a defense to the bank’s foreclosure:
- In 2004, the Ohio Ninth District Court of Appeals found that the bank failed when there was no evidence that the notice had been received, finding that “although [a] unsigned letter is labeled as “certified mail,” [the mortgagor] produced no certified mail receipt, acquisition of which is ordinarily the reason for sending a letter via certified mail.” Mortgage Elec. Registration Sys., Inc. v. Akpele, 2004-Ohio-3411, ¶ 12.
- In 2007, the Ohio Twelfth District held the same way in where a mortgage required notice to be sent by certified mail, and the bank said the notice was sent but could provide no evidence it was sent that way. First Financial Bank v. Doellman, 12th Dist. Butler No. CA2006–02–029, 2007-Ohio-222.
- In 2009, the Ohio Tenth District held that the mailing of a notice of default to a mortgagor by certified mail did not satisfy the condition precedent notice and delivery requirement when the certified mail envelope was returned unclaimed. “Notification that certified mail is being held for a recipient is undeniably distinct from delivery of the certified-mail contents.” Nat’l City Mortgage Co. v. Richards, 2009-Ohio-2556, ¶ 28, 182 Ohio App. 3d 534, 545, 913 N.E.2d 1007, 1015.
The final case is important in that it shows that the certified mail requirement means more than just the bank putting the letter in the post. Certified mail is a way of guaranteeing delivery and the bank cannot claim that the notice was received where it has knowledge that the borrower did not get the certified letter. The court turned to the dictionary and held that “delivery must presume the giving or yielding of possession or control to another. See Black’s Law Dictionary (7th Ed. 1999); Webster’s Encyclopedic Unabridged Dictionary (Random House 1997).” Richards, 913 N.E.2d at 1016.
So if there is a foreclosure action filed against you, pull out your mortgage documents and see if there is a certified mail notice requirement, or bring the paperwork into us and let us do the work for you. The notice and condition precedent rules can be powerful weapons against the bank. If we can show that the bank failed to perform according to their obligations, you might be able to save your home.
The Fair Housing Act: Conditions required prior to foreclosure
Doucet & Associates argued before the Fifth District that certain conditions must be met before foreclosing on a Fair Housing Act (FHA) loan. In Wells Fargo Bank, N.A. v. Gerst, 5th Dist. Delaware No. 13CAE-05-0042, 2014 WL 108788 (Jan. 9, 2014), The Fifth District reversed the trial’s court’s finding that HUD’s face-to-face meeting requirement was an affirmative defense, and not a condition precedent to the plaintiff-appellee’s foreclosure action. The court stated: “Appellee has failed to establish it complied with the regulation that it have a face-to-face interview with Appellants, or made a reasonable effort to arrange the interview, before bringing the foreclosure action. Further, the letters sent to Appellants . . . cannot be used to demonstrate even minimal compliance with Section 203.604, Title 24 C.F.R., because subsection (d) of that rule prescribes a certified letter as the minimum requirement for a reasonable effort to arrange a face-to-face meeting.”
National City Mortgage Company v. Richards: A case study in condition precedent as a foreclosure defense
National City Mortgage Company v. Richards: A case study in condition precedent as a foreclosure defense
Before your mortgage company can initiate foreclosure proceedings and accelerate your debt they must meet any condition precedents required in the original agreement. Most often these condition precedents come in the form of required prior notice of default and/or acceleration outlined by a provision in your note or mortgage instrument. So what does this mean for you? Basically it means that your mortgage company cannot take action against you without properly informing you of their intent to do so. National City Mortgage Company v. Richards illustrates the scenario well. In that case, Richards argued that she never received notice of her default through first class mail as was required in her original agreement with the mortgage company. Because of this oversight on the part of the mortgage company, Richards never had a reasonable opportunity to cure the problem. The Tenth District sided with Richards and the Mortgage Company’s cause was dismissed. If you believe you might have an issue with condition precedent or any other mortgage issue please do not hesitate to contact Doucet & Associates.
 By: Justin Potter, Of Counsel, Doucet & Associates Co., L.P.A.
 Nat’l City Mortgage Co. v. Richards, 2009-Ohio-2556, ¶ 1, 182 Ohio App. 3d 534
Brunner Dissent in Hazel May Add Foreclosure Defense for FHA Homeowners
Homeowners facing foreclosure would do well to read Judge Jennifer Brunner’s thorough dissent in Wells Fargo Bank, N.A. v. Hazel . Hazel defended an action in foreclosure in Franklin County by herself (pro se) and, though ultimately unsuccessful, might have marked a path to defending certain foreclosures for future defendants.
Hazel’s home loan was a Federal Housing Administration (FHA) loan. These loans are governed by the Department of Housing and Urban Development (HUD), and require lenders to follow very specific steps in order to properly foreclose on a home. The loan contract, also known as a promissory note, contained a vague reference to the HUD regulations:
If Borrower defaults by failing to pay in full any monthly payment, then Lender may, except as limited by regulations of the Secretary in the case of payment defaults, require immediate payment in full of the principal balance remaining due and all accrued interest * * * In many circumstances regulations issued by the Secretary will limit Lender’s rights to require immediate payment in full in the case of payment defaults. This Note does not authorize acceleration when not permitted by HUD regulations. As used in this Note, “Secretary” means the Secretary of Housing and Urban Development or his or her designee.
It is settled Law in Ohio that following HUD regulations prior to initiating foreclosure on FHA loan houses constitute “conditions precedent” under Ohio Civ.R. 9(C). However, Judge Brunner would rule that this vague reference to the HUD regulations actually requires lenders to attach the regulations to a Complaint for foreclosure to be in compliance with the pleading requirements of Ohio Civ.R 10(D). She writes:
Even if Wells Fargo were to assert that the conditions precedent were incorporated by reference to HUD regulations, in order to take advantage of Civ.R. 9(C), Wells Fargo would have needed first to comply with Civ.R. 10(D) and attach the documents that are the basis of its claim-including terms set down elsewhere that are incorporated by reference. In other words, Wells Fargo having made a “claim,” was required by Civ.R. 10(D)(1) to “attach to the pleading” a copy of the operative document.
Brunner’s analysis, and Hazel’s efforts, may have created another avenue to challenge the complaint by forcing lenders to attach the regulations to the complaint itself or be subject to dismissal. If nothing else, Homeowners who have FHA loans should be aware of HUD regulation 24 C.F.R. 201.50, know where to find it, and hold the lenders to it.
 Wells Fargo Bank, N.A. v. Hazel, 2016-Ohio-305, cause dismissed, 2016-Ohio-915, 145 Ohio St. 3d 1412, 46 N.E.3d 705, (10th Dist. 2016) (J. Brunner, dissenting).
 Id., at ¶14, emphasis added.
 See for example: BAC Home Loans Servicing, LP v. Taylor, 9th Dist. No. 26423, 2013-Ohio-355, 986 N.E.2d 1028, U.S. Bank, N.A. v. Detweiler, 5th Dist. No. 2010CA00064, 191 Ohio App.3d 464, 2010-Ohio-6408, 946 N.E.2d 777.
 Wells Fargo Bank, N.A. v. Hazel, at ¶36.