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.
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.
Mobile Home and Manufactured Rights
Rental agreement laws are put in place to protect tenants who lease a mobile or manufactured home. Lawyers at Doucet & Associates Co., L.P.A. can offer legal assistance to tenants whose park operators fail to comply with these laws.
A mobile and manufactured home parks rental agreement or lease must abide by certain requirements and include specific policies. Leases must be signed and completed by tenant and landlord before to moving in. The landlord must offer a minimum length of stay of one year and must offer renewal for when the term ends. The property owners name and address must be provided to the tenant and all rules associated with the park must be listed. A landlord must also state all fees and charges including monthly, extras, and for damages the tenant may cause.
A tenant is not required to purchase the rental property at the end of the lease. The agreement cannot modify the tenant rights or remove the landlord from liabilities or obligations. Landlords are obligated to keep the property sanitary and habitable and repair appliances and utilities. Landlords also have to give tenants a 24 hour notice before entering a leased property. A violation of these tenant rights may result in a lawsuit where damages are recovered and attorney fees are paid by the landlord. Contact Doucet & Associates Co., L.P.A. today at (614)944-5219 to verify if your tenant rights are being violated.
A Mortgage Servicer Must Show Compliance with Housing and Urban Development Regulations Prior to Initiating Foreclosure Action
In Wells Fargo, N.A., vs. Awadallah, 41 N.E.3d 481 (2015), the Ninth District held that where a note and mortgage requires compliance with HUD regulations, such compliance is a condition precedent to bringing a foreclosure action. A condition precedent is something that must occur before something else will or can occur. Ms. Awadallah’s promissory note and mortgage were prepared on Federal Housing Administration forms and required that the bank, as a condition of receiving federal money, meet all HUD requirements prior to filing a foreclosure action. Under HUD, Wells Fargo was required to have a face-to-face interview with Ms. Awadallah, or make a reasonable effort to arrange such. At minimum, Wells Fargo was required to send a certified letter to Ms. Awadallah and make at least one trip to see her at the mortgaged property. It failed to do so.
Wells Fargo failed to present evidence to the Ninth District regarding their reasonable effort to make a visit to Ms. Awadallah’s home, which is expressly required under her note and mortgage and federal regulation. Wells Fargo argued that they didn’t need to meet that requirement because after the foreclosure action was filed, the parties attempted to settle the case in mediation. Wells Fargo argued that the purpose of the in-person meeting, as required under HUD, is to consider loss mitigation and that court-sponsored mediation serves the same purpose. The Ninth District disagreed, stating that mediation after the foreclosure action has been initiated does not show compliance with the federal regulation. Wells Fargo failed to strictly comply with standard regulations set forth to protect consumers. Thus, Wells Fargo did not satisfy the conditions precedent to filing a foreclosure action against Ms. Awadallah. Therefore, Wells Fargo was not entitled to succeed on its motion for summary judgment. The Ninth District reversed the judgment and sent the case back for further proceedings.
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.
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.
Loss Mitigation Options for Families Facing Foreclosure
Federal law requires mortgage companies to offer loss mitigation options to homeowners who are facing foreclosure. Loss mitigation options include:
- Loan Modification – The lender and borrower agree to extend the life of the loan for a reduction in interest.
- Deed in Lieu – The borrower offers collateral in exchange for a release from the mortgage.
- Pre-foreclosure Sale – The borrower sells the property and uses the money to pay off the mortgage.
- Short Sale – The lender accepts a payoff less than the mortgage is worth. This only applies if the mortgage is more than the value of the property.
- Cash for Keys Deal – The lender pays the family to leave in order to avoid the cost of eviction.
- Forbearance – The lender accepts reduced or no payments for a short time in exchange for a later repayment.
- Partial Claim – The lender advances the fees necessary to bring the mortgage current to the borrower under the condition that they are paid back at a later date.
Which options are available depend on the mortgage servicer and the circumstances surrounding the loss mitigation application. The mortgage servicer will be able to present you with information regarding loss mitigation and what is required to file an application. After submitting an application for loss mitigation:
- Your servicer must respond to loss mitigation application in five business days with the application status:
- Either complete or incomplete.
- If incomplete, the servicer must state what is required to complete the application.
- Your servicer must provide you with an evaluation or complete list of options within thirty business days of receiving the application.
- If you are denied, you must be provided with an opportunity to appeal.
Once you submit a loss mitigation application, before responding to your request the mortgage servicer cannot:
- File a foreclosure lawsuit.
- Move forward with the sale of a property.
This is known as dual tracking and it is illegal. Doucet & Associates deals with banks and mortgage servicers on a regular basis. If you are having trouble getting a loan modification processed, or if you would like assistance in filing one calls us at (614)-944-5219.
Columbus Resident Victim of Bed Bugs
Doucet & Associates have filed a lawsuit on behalf of a Columbus resident who suffered physical injury, emotional distress, and economic loss due to the false assurance that the home she was about to move into was not infested with bed bugs.
R.S. Perry, LLC, and Peak Property Group, LLC, are the alleged owner and manager respectively of the property Doucet’s client leased in June of 2013. Before she moved into the premises, Doucet’s client was allegedly informed by a neighbor that the property was infested with bedbugs. The resident contacted the property’s owners to see if this were true; she was allegedly assured that there were no bedbugs on the premises.
As a result, Doucet’s client began to move into the residence. The firm’s client awoke the next morning to find she had suffered numerous bed bug bites during her first night on the property. According to the lawsuit, she immediately moved all of her belongings out of the residence and the Department of Health had to destroy her furniture. She then had to call into work to let her employer about the bed bug infestation — a call that put her job on the line.
R.S. Perry and Peak Property’s (or their predecessors) alleged inability to keep their property safe and inhabitable resulted in physical injury for Doucet’s client, as well as embarrassment, anxiety, and the loss of her belongings. She is suing on counts of breach of warranty of habitability, negligence, negligence per se, nuisance, constructive eviction, breach of contract, and battery. She is seeking statutory, economic and noneconomic, actual and emotional, general, punitive, and other damages in addition to attorney fees and the costs of the litigation.
Doucet & Associates is dedicated to fighting for the rights of consumers, protecting their interests and offering legal assistance to those who would otherwise be unable to afford it. If you feel that a company is taking advantage of consumers, the law firm welcomes your call at (614) 944-5219.
Why Assumable Loans Are Great
If you are refinancing or modifying your loan, then I recommend doing what you can to ensure that it is assumable. An assumable loan means someone else can acquire your mortgage (and make payments on it) when you sell the home.
Assumable loan clauses are standard in VA and FHA mortgages, so if you are considering making a change, take a very close look at those programs.
Why look for an assumable loan? Because interest rates are not going to get any lower. In this author’s mind, inflation is just a few short years away, bringing with it higher interest rates. Higher interest rates mean loans are more expensive, and people are not able to buy the size of home they could if rates were lower. You know that your payments are less if your rate is 4% versus 8%. Someone looking to buy your home will be looking at it a lot differently if they have to pay 4% or 8% interest. The difference on a $100,000, 30-Year loan is $403.66 per month. That’s a lot of money.
Getting an assumable loan now at market rates means you can lock in that savings for someone looking to buy your home later, when rates are higher. Because someone assuming your 4% loan will save $403.66 more to spend each month than he would getting a market rate, he should be willing to pay a premium for your home. After all, he’s saving $4,843 per year by taking over your mortgage, or $48,439 over ten years. That means your home is worth more than the next guy who did not think to secure an assumable loan while rates were low.
Spouse on Deed But Not Mortgage?
If a spouse is on the deed but not on the mortgage, your lender has serious problems! Seek a real estate lawyer immediately!!
The deed is the document that transfers interest in a property from one party to another (different from a deed of trust). A deed usually provides that each person who owns the property has an undivided interest in it (two people each own half the property, but a line isn’t cut down the center of it). Thus, if one spouse is on the deed but the spouse’s interest isn’t encumbered by the mortgage, then they likely own their half free and clear of the mortgage. Assuming they are not on the loan, the lender will probably half to fork over half the proceeds to the spouse who didn’t sign the mortgage but is on the deed.