Wells Fargo Bank, NA v. Burd
2016 Ohio 7706
Ohio Ct. App.2016Background
- In 2006 Burd took a mortgage loan from Centennial, which was indorsed/assigned to Wells Fargo; Burd later defaulted.
- Wells Fargo filed three foreclosure complaints (2009, 2012, 2014); a 2010 loan modification intervened and the first action was dismissed with prejudice.
- The second action resulted in mediation in August 2012 but summary judgment was granted for Burd for failure to comply with HUD servicing rules; Wells Fargo filed a third complaint based on the same default date (Sept. 1, 2011).
- Wells Fargo moved for summary judgment in the third action; the trial court denied it and granted summary judgment to Burd, holding Wells Fargo failed to comply with 24 C.F.R. §203.604’s face-to-face interview requirement (a condition precedent to foreclosure in the court’s view).
- Wells Fargo appealed; the appellate court affirmed summary judgment for Burd as to foreclosure but reversed as to Wells Fargo’s claim for a personal monetary judgment on the note, finding material factual disputes about reaffirmation and the loan modification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to comply with 24 C.F.R. §203.604(b) bars foreclosure | §203.604 contains timing but not a penalty; lender can cure noncompliance by arranging/holding the face-to-face meeting before filing foreclosure | Failure to comply with the regulation before filing foreclosure is a condition precedent and precludes foreclosure here | Affirmed for defendant: lender failed to comply with §203.604(b) for the same default date and summary judgment for defendant on foreclosure was proper |
| Whether a court‑sponsored mediation can satisfy §203.604(b) | Mediation may qualify as a face-to-face meeting that cures timing shortfall | Mediation alone, after prior foreclosure filing and without other attempts, does not satisfy the regulation’s purpose | Court assumed mediation could count for analysis but found overall compliance lacking; defendant wins on foreclosure claim |
| Whether §203.604 regulates recovery on the promissory note (personal judgment) | §203.604 applies to foreclosure only and does not bar a claim for monetary judgment on the note | Loan Modification (and alleged bankruptcy reaffirmation issues) eliminated or altered personal liability, barring a judgment on the note | Reversed for plaintiff on note claim: genuine issues of material fact exist about reaffirmation and the modification’s effect, so summary judgment for defendant on the note was improper |
| Whether prior litigation/mediation estops Wells Fargo from refiling foreclosure | Wells Fargo contends participation in mediation and later filing cures prior procedural defects | Defendant contends prior failure to comply deprived him of the opportunity to avoid foreclosure and bars revival based on same default | Court relied on the record that prior failures to comply with §203.604 in earlier action meant foreclosure could not proceed here (limited to facts presented) |
Key Cases Cited
- Capella III, L.L.C. v. Wilcox, 190 Ohio App.3d 133 (Ohio App. 2010) (summary-judgment standard and de novo review explained)
- Andersen v. Highland House Co., 93 Ohio St.3d 547 (Ohio 2001) (standard for appellate de novo review of summary judgment)
- Gilbert v. Summit County, 104 Ohio St.3d 660 (Ohio 2004) (Ohio summary judgment three-part test)