Fed. Nat'l Mortg. Ass'n v. Herren
2017 Ohio 8401
Ohio Ct. App.2017Background
- Sandra and Thomas Herren executed a mortgage and promissory note in 2001; the note bears multiple endorsements/allonges including an endorsement in blank by Ohio Savings and an allonge purporting to endorse from Metropolitan to Ohio Savings.
- The note was earlier the subject of a 2011 foreclosure by Citi (dismissed without prejudice); the note later was held/possessed by Federal National Mortgage Association (Fannie Mae), which filed a second foreclosure in 2014.
- Fannie Mae moved for summary judgment; the magistrate and trial court granted it. The Herrens appealed.
- Central factual disputes concern the validity/timing of endorsements (Metropolitan → Ohio Savings), the provenance of the allonge, and whether Fannie Mae is a holder or a nonholder entitled to enforce.
- Additional issues: apparent breaks/mismatches between the chain of endorsements on the note and the chain of mortgage assignments, and whether conditions precedent (notice/acceleration, amount due) were satisfied.
Issues
| Issue | Plaintiff's Argument (Fannie Mae) | Defendant's Argument (Herrens) | Held |
|---|---|---|---|
| 1. Standing / entitlement to enforce the note (holder status) | Fannie Mae possesses the original note endorsed in blank and thus is a holder (or at least a nonholder with rights) entitled to enforce. | Endorsements/allonge are irregular and unexplained; Fannie Mae has not proved valid negotiation to make it a holder. | Reversed: material factual disputes about endorsements/allonge; Fannie Mae did not prove holder status as a matter of law. |
| 2. Validity/timing of the Metropolitan → Ohio Savings endorsement (allonge) | The allonge is authentic and the endorsements operate to make the note bearer paper; successor records show Huntington succeeded Metropolitan. | The allonge was undated/retroactive; witness testimony raises questions about who signed and when; provenance is unclear. | Reversed: unresolved genuine issues about the allonge and endorsement timing that preclude summary judgment. |
| 3. Nonholder in possession / use of mortgage assignments to prove enforcement rights | Even if not a holder, Fannie Mae is a nonholder in possession entitled to enforce based on mortgage assignments and possession of the note. | Assignments of mortgage do not track the endorsements on the note; gaps and inconsistencies undermine intent to transfer enforcement rights. | Reversed: assignments and endorsements conflict; material questions remain whether Fannie Mae obtained enforcement rights. |
| 4. Conditions precedent (notice/acceleration/amount due) | Proper notice of default and acceleration was sent (2010 letter by Citi); Abeln affidavit and account history establish default and amount due. | Fannie Mae failed to follow internal policies, allegedly defective default notices, and only provided partial payment history. | Partially adverse to Herrens: Fannie Mae satisfied notice/acceleration and amount‑due showing for summary judgment purposes, but unresolved title/chain issues were dispositive. |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (Ohio 1996) (summary judgment standard)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (party moving for summary judgment bears initial burden)
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (Ohio 2012) (standing requires real interest at the outset)
- Deutsche Bank Natl. Trust Co. v. Holden, 147 Ohio St.3d 85 (Ohio 2016) (discusses separate mortgage foreclosure rights)
- Acordia of Ohio, L.L.C. v. Fishel, 133 Ohio St.3d 345 (Ohio 2012) (successor-in-interest analysis for corporate successors)