Freedom Mtge. Corp. v. Vitale
2014 Ohio 1549
Ohio Ct. App.2014Background
- Vitale executed a promissory note for $279,125 payable to Freedom Home Mortgage on November 23, 2009; the note was indorsed in blank.
- Vitale also executed a mortgage on the Sugarcreek property securing the note, with MERS listed as mortgagee and nominee for Lender.
- The mortgage was recorded December 9, 2009; MERS as nominee assigned the mortgage to Freedom Mortgage Corporation on August 12, 2010.
- Freedom Mortgage filed foreclosure May 22, 2012 alleging nonpayment since February 1, 2010; plaintiff claimed possession of note and mortgage.
- Appellants filed Chapter 7 bankruptcy; discharge granted March 2011; Freedom pursued foreclosure post-discharge.
- Garrett (LoanCare VP) affidavit asserted Freedom Mortgage held the note and mortgage and possessed original documents; records kept in ordinary course; custodians held documents when not in possession.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/real party in interest to foreclose | Freedom Mortgage held the note and mortgage; in possession or via custodians. | Possession/authority to foreclose questioned due to bankruptcy discharge. | Appellee shown as real party in interest with standing. |
| Indorsement and transfer of note | Note indorsed in blank; possession suffices to enforce; assignment supported transfer of note. | Questioned inconsistency with note version in other case; indorsement validity contested. | No genuine issue; blank indorsement and mortgage assignment sufficient to transfer note. |
| Effect of mortgage assignment on note | Assignment of mortgage transfers both mortgage and note where the parties intended to transfer both. | If assignment only mortgaged, note transfer may be unclear. | Assignment of mortgage sufficient to transfer both note and mortgage; intent shown. |
| Evidence and admissibility of the affidavit | Garrett’s affidavit meets Rule 56 and business records requirements. | Affidavit lacked custodian authentication for copies. | Garrett’s affidavit properly admissible; no Civil Rule 56(E) deficiency. |
| Face-to-face meeting requirement under 24 C.F.R. 203.604 | Defendant failed to cooperate; a meeting was attempted; regulation satisfied. | Compliance insufficient; no reasonable effort to arrange meeting. | Foreclosure proper; requirements of 24 C.F.R. 203.604 met. |
Key Cases Cited
- Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 2012-Ohio-5017 (Ohio 2012) (standing requires interest in note/mortgage at filing)
- U.S. Bank Nat’l. Assn v. Marcino, 181 Ohio App.3d 328 (Ohio Ct. App. 2009) (real party in interest; current holder entitled to enforce)
- Bank of New York v. Dobbs, 2009-Ohio-4742 (Ohio 2009) (note and mortgage transfer where assignment reflects intent)
- Wachovia Bank, N.A. v. Jackson, 2011-Ohio-3202 (Ohio Ct. App. 2011) (business records; proper affidavit requirements under Rule 56)
- Daniely v. Accredited Home Lenders, 2013-Ohio-4373 (Ohio Ct. App. 2013) (MERS authority to assign mortgage as nominee)
- Citimortgage, Inc. v. Cathcart, 2014-Ohio-620 (Ohio Ct. App. 2014) (business records qualification under Rule 803(6))
- Fannie Mae v. Trahey, 2013-Ohio-3071 (Ohio Ct. App. 2013) (note indorsement variations; distinguishable from present case)
- Well Fargo Bank, N.A. v. Elliott, 2013-Ohio-3690 (Ohio Ct. App. 2013) (MERS authority to assign mortgage)