Wells Fargo Bank, N.A. v. Cook
31 N.E.3d 1125
Mass. App. Ct.2015Background
- Nancy and Abena Cook refinanced their Mattapan property in March 2008 with an FHA‑insured mortgage that incorporated HUD regulations limiting the lender’s right to accelerate and foreclose.
- Wells Fargo acquired servicing rights April 10, 2008; the Cooks missed payments June–August 2008. Mortgage payments were due on the first of each month and had a 15‑day contractual grace period.
- On August 12, 2008 the Cooks attended a large Wells Fargo event at Gillette Stadium, spoke ~15 minutes with a Wells Fargo representative, and attempted to tender payment (which Wells Fargo says it has no record of receiving).
- Wells Fargo later sent a Special Forbearance Agreement; the Cooks made several payments but Wells Fargo rejected a later payment, declared default, accelerated the loan, and conducted a foreclosure sale (Wells Fargo purchased at auction April 16, 2012).
- Wells Fargo sued in summary process for possession; the Housing Court granted Wells Fargo summary judgment. The Cooks appealed, arguing Wells Fargo failed to comply with HUD’s face‑to‑face interview requirement incorporated into the mortgage and seeking to revive a G. L. c. 93A counterclaim.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Cooks) | Held |
|---|---|---|---|
| Whether the trial judge should have considered the HUD Handbook when construing 24 C.F.R. § 203.604(b) | Handbook is not binding and need not be considered | Handbook is persuasive interpretive guidance and should inform construction of HUD regs | The court held the handbook is persuasive guidance and the judge erred by not considering it |
| Whether the Gillette Stadium meeting was timely under § 203.604(b) (meeting must occur before three full monthly installments are unpaid) | Meeting was within grace period and therefore timely | Meeting was after regulatory deadline and thus untimely | The court held the meeting was untimely (should have occurred by Aug 3, 2008) |
| Whether the stadium meeting satisfied the substantive face‑to‑face requirements (personalized interview; rep authority to propose/accept plans) | Meeting and subsequent forbearance show compliance; any dispute is immaterial | The rep lacked authority to accept payments or negotiate; meeting was not personalized; material factual disputes exist | The court held material disputed facts exist about the representative’s authority and the meeting’s substance, so summary judgment was improper |
| Whether failure to strictly comply with the HUD face‑to‑face rule precludes foreclosure as a condition precedent to power of sale | Less than strict compliance should suffice; missed deadline does not automatically void sale | HUD regulations incorporated into mortgage are condition precedent; failure to comply can void foreclosure | The court held HUD regulations incorporated into the mortgage are conditions precedent; strict compliance matters and factual disputes preclude summary judgment |
Key Cases Cited
- DiPietro v. Sipex Corp., 69 Mass. App. Ct. 29 (summary judgment review standard)
- Global NAPs, Inc. v. Awiszus, 457 Mass. 489 (HUD handbook is persuasive guidance, not binding)
- Bank of New York v. Bailey, 460 Mass. 327 (title may be challenged in summary process; foreclosure must follow power of sale terms)
- U.S. Bank Natl. Assn. v. Schumacher, 467 Mass. 421 (distinguishing statutes not incorporated into mortgage from terms of the mortgage)
- U.S. Bank Natl. Assn. v. Ibanez, 458 Mass. 637 (strict compliance with power of sale terms required)
- Kolbe v. BAC Home Loans Servicing, LP, 738 F.3d 432 (First Circuit considered HUD handbook as interpretive material)