Wells Fargo Bank, N.A. v. Carver
60 N.E.3d 473
Ohio Ct. App.2016Background
- In 1996 Tenealle Carver executed a promissory note and an open-end mortgage to purchase a Shaker Heights home; Carver was the sole borrower on the note, and Abdullah signed the mortgage but was not a borrower on the note.
- Wells Fargo filed a foreclosure complaint in 2012 alleging Carver defaulted and asserting it was entitled to enforce the note and mortgage.
- Wells Fargo submitted the original note (with endorsements and allonges tracing through Homeside, Washington Mutual, and an FDIC-as-receiver transfer to Wells Fargo) and an affidavit of Alisha Mulder attesting to custody and review of the loan records.
- The magistrate granted summary judgment for Wells Fargo; the trial court adopted and modified that decision and denied appellants’ objections (striking supplemental objections).
- Appellants raised four issues on appeal: Wells Fargo’s standing/holder status; lack of required notices to Abdullah; failure to hold a HUD-required face-to-face meeting; and whether Wells Fargo was a "debt collector" under the FDCPA.
- The Eighth District affirmed summary judgment, holding Wells Fargo was the holder entitled to enforce the note, Abdullah was not entitled to borrower notices, a face-to-face meeting was not required, and Wells Fargo was a creditor not a debt collector.
Issues
| Issue | Plaintiff's Argument (Wells Fargo) | Defendant's Argument (Carver/Abdullah) | Held |
|---|---|---|---|
| Standing / right to enforce note | Wells Fargo possessed the note (endorsed in blank) and produced assignments/allonges and custodian affidavit | Appellants disputing authenticity/chain of title and asserting assignments were invalid or fraudulent | Court: Wells Fargo established possession and holder status under R.C. Chapter 1303; summary judgment appropriate |
| Notice to Abdullah | Only the borrower (Carver) was entitled to mortgage notices; Abdullah was not a borrower on the note | Abdullah lacked required acceleration/foreclosure notices | Court: Abdullah was not a borrower on the note; no notice required to him |
| Face-to-face meeting (HUD req.) | No face-to-face meeting required because mortgagor (Carver) did not reside at property when suit filed; Abdullah not a mortgagor | Appellants contended HUD regs required a face-to-face meeting before foreclosure | Court: Issue not preserved for appeal; alternatively, 24 C.F.R. 203.604(c)(1) exempts meeting because mortgagor no longer resided at property; claim fails |
| FDCPA status (creditor vs. debt collector) | Wells Fargo began servicing loan before default and executed a 2009 modification that brought loan current; thus a creditor under FDCPA exclusion | Appellants claimed foreclosure is debt collection and Wells Fargo acted as a debt collector | Court: Under 15 U.S.C. 1692a(6)(F)(iii) Wells Fargo was a creditor (loan not in default when acquired/serviced); FDCPA does not apply |
Key Cases Cited
- Baiko v. Mays, 140 Ohio App.3d 1 (Ohio App. 8th Dist.) (standard of review for appellate de novo review of summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (movant’s and nonmovant’s burdens in summary judgment practice)
- State ex rel. Duganitz v. Ohio Adult Parole Auth., 77 Ohio St.3d 190 (Ohio 1996) (summary judgment standard and Civ.R. 56 principles)
- First Union Natl. Bank v. Hufford, 146 Ohio App.3d 673 (Ohio App. 3d Dist.) (plaintiff must establish current holder status to pursue foreclosure)
- Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355 (6th Cir.) (distinguishing creditor vs. debt collector under FDCPA based on default status at acquisition)
- Glazer v. Chase Home Fin., L.L.C., 704 F.3d 453 (6th Cir.) (foreclosure constitutes debt collection under FDCPA)
- FTC v. Check Investors, Inc., 502 F.3d 159 (3d Cir.) (a party cannot be both creditor and debt collector simultaneously)
- Schlosser v. Fairbanks Capital Corp., 323 F.3d 534 (7th Cir.) (FDCPA definitional analysis of creditor vs. debt collector)