Flagstar Bank, FSB. v. Wampole, B.
1542 MDA 2015
| Pa. Super. Ct. | Oct 11, 2016Background
- In 2008 the Wampoles executed a mortgage with Flagstar Bank; they defaulted and Flagstar sued in 2010 for foreclosure.
- Flagstar moved for summary judgment; the trial court granted judgment in 2013 for the unpaid mortgage balance; the Superior Court affirmed that judgment on appeal.
- The property was listed and sold at sheriff’s sale on June 5, 2015; Flagstar’s attorney purchased the property and a sheriff’s deed was recorded July 1, 2015.
- The Wampoles filed a petition to set aside the sheriff’s sale, arguing Flagstar engaged in bad faith and deceptive servicing practices (pointing to a subsequent CFPB consent order against Flagstar) and that loss-mitigation promises misled them.
- The trial court denied the petition to set aside; the Superior Court affirmed, finding no new or substantial evidence to overcome the prior judgment and that equitable relief was not warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the sheriff’s sale should be set aside or equitable estoppel applied because Flagstar engaged in deceptive servicing practices (as reflected by a CFPB consent order) that affected the Wampoles’ ability to avoid foreclosure | The Wampoles: CFPB consent order and Flagstar’s alleged bad-faith servicing constitute equitable grounds to set aside the sale or estop enforcement | Flagstar: The prior summary-judgment and lack of new evidence foreclose equitable relief; CFPB action does not change the facts underlying default | Court: Denied relief—no substantial change in facts or controlling law, law-of-the-case applies, and petitioners failed to carry burden to show equitable grounds to set aside the sale |
Key Cases Cited
- Marks v. Tasman, 589 A.2d 205 (Pa. 1991) (standard for opposing summary judgment on foreclosure default)
- Merrill Lynch Mortgage Capital v. Steele, 859 A.2d 788 (Pa. Super. 2004) (petitioner bears burden to prove circumstances warranting equitable relief)
- Nationstar Mortgage, LLC v. Lark, 73 A.3d 1265 (Pa. Super. 2013) (setting aside sheriff’s sale governed by equitable considerations; abuse-of-discretion review)
- Silver v. Thompson, 26 A.3d 514 (Pa. Super. 2011) (abuse of discretion standard defined)
- Ario v. Reliance Ins. Co., 980 A.2d 588 (Pa. 2009) (law-of-the-case doctrine and exceptions)
- Bornman v. Gordon, 527 A.2d 109 (Pa. Super. 1987) (denial of setting aside sheriff’s sale when judgment debtor made no effort to satisfy judgment)