BAC Home Loans Servicing, LP. v. Taylor
2013 Ohio 355
Ohio Ct. App.2013Background
- Taylors defaulted on a promissory note secured by a mortgage on property in Summit County, Ohio, leading BAC Home Loans (now Bank of America, N.A.) to sue for foreclosure.
- BAC filed with copies of the note, mortgage, and an assignment from the lender showing ownership, and moved for summary judgment supported by an affidavit row by Audrea M. King claiming BAC’s possession and standing.
- Taylors argued BAC lacked admissible evidence of standing and that HUD/Regulatory requirements governing face-to-face meetings before foreclosure were not satisfied.
- The loan documents incorporate HUD regulations, including a mandatory face-to-face meeting prerequisite under 24 C.F.R. 203.604, with no applicable exceptions in this case.
- Trial court granted summary judgment; Taylors appealed challenging both standing and HUD regulatory compliance as defenses.
- Court held that there is a genuine issue of material fact about whether BAC satisfied the HUD face-to-face requirement and reversed for further proceedings; standing evidence was adequate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| HUD compliance as a defense to foreclosure | Taylor asserts HUD regulation 24 C.F.R. 203.604 requires face-to-face meeting before foreclosure; BAC failed to show compliance. | BAC contends HUD rules do not create private rights or conditions precedent; post-filing mediation suffices and no strict prefiling meet required. | Sustained; genuine issue of material fact on whether BAC satisfied face-to-face requirement before filing. |
| Standing and real party in interest | Taylor argues BAC lacked standing at summary judgment because note ownership allegedly with Bank of America, not BAC. | BAC contends merger to Bank of America, N.A. renders it holder with standing; evidence supports merger and assignment. | Overruled; sufficient evidence of merger and no mandatory substitution necessary post-filing; standing established. |
Key Cases Cited
- Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (2012-Ohio-5017) (recognizes tendered records and standing in foreclosure)
- Washington Mut. Bank v. Mahaffey, 154 Ohio App.3d 44 (2003-Ohio-4422) (face-to-face meeting requirement governs foreclosure timing)
- LaSalle Bank, N.A. v. Kelly, 2010-Ohio-2668 (9th Dist. No. 09CA0067-M) (Civ.R. 56 burden on proving compliance with conditions precedent)
- Wells Fargo Bank, N.A. v. Isaacs, 2010-Ohio-5811 (1st Dist. No. C-100111) (HUD face-to-face requirement before foreclosure; compliance essential)
- Wells Fargo v. Phillabaum, 2011-Ohio-1311 (4th Dist.) (failure to show compliance with HUD requirements defeats summary judgment)
- U.S. Bank, N.A. v. Stewart, 2007-Ohio-5669 (2d Dist. No. 21775) (HUD regulations governing foreclosure prerequisites discussed)
- Detweiler, 191 Ohio App.3d 464 (2010-Ohio-6408) (foreclosure defenses based on HUD regulations discussed)
- LeCrone, Federal Nat. Mortgage Ass’n v. LeCrone, 868 F.2d 190 (6th Cir. 1989) (private right of action under HUD policies not implied)
- United States v. Neustadt, 366 U.S. 696 (Supreme Court 1961) (HUD appraisals not warranty of value; limits on redress)