Anderson v. Barclay's Capital Real Estate, Inc.
136 Ohio St. 3d 31
| Ohio | 2013Background
- Ohio court addresses whether the Ohio CSPA applies to servicing of residential mortgage loans, certified by a federal court for Ohio law questions.
- Mortgage servicer HomEq Servicing engages in loan payment processing, default options, loss mitigation, and borrower interactions on behalf of the note holder.
- Servicing is performed under contract with the financial institution that owns the mortgage, not directly with borrowers.
- CSPA defines consumer transaction broadly but excludes most pure land/real estate transactions; servicing is argued to be collateral to a real estate transaction.
- Legislative history shows amendments extending CSPA to certain mortgage-industry actors (loan officers, brokers, nonbank lenders) but not explicitly mortgage servicers; proposed bills to cover servicers were not enacted.
- Court concludes mortgage servicing is not a consumer transaction and servicers are not suppliers under the CSPA; both certified questions answered in the negative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does mortgage servicing of residential loans qualify as a consumer transaction under RC 1345.01(A)? | Anderson argues servicer provides consumer services to borrowers. | HomEq contends servicing is a collateral real-estate service for the lender, not a consumer transaction. | No; servicing is not a consumer transaction under RC 1345.01(A). |
| Is a mortgage servicer a ‘supplier’ under RC 1345.01(C)? | Anderson argues servicers effect or solicit consumer transactions with borrowers. | HomEq does not initiate or enter into consumer transactions with borrowers. | No; mortgage servicers are not ‘suppliers’ under the CSPA. |
Key Cases Cited
- Brown v. Liberty Clubs, Inc., 45 Ohio St.3d 191 (1989) (real estate transactions excluded from CSPA)
- Heritage Hills, Ltd. v. Deacon, 49 Ohio St.3d 80 (1990) (landlord-tenant/real estate regulation supports exclusion from CSPA)
- Gionis v. Javitch, Block & Rathbone, 405 F.Supp.2d 856 (S.D. Ohio 2005) (early federal view on consumer-transactions focus on entity, not underlying loan)
- Lee v. Javitch, Block & Rathbone, 522 F.Supp.2d 945 (S.D. Ohio 2007) (debt collectors and exemptions framework relevant to CSPA)
- Celebrezze v. United Research, Inc., 19 Ohio App.3d 49 (1984) (debt collection/consumer protection lineage under CSPA)