Servicers Win in Ohio Ruling

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MORTGAGE EXPERT
1 · 06 · 14

Mortgage servicers with loans in Ohio are likely to be pleased with a recent appellate court decision on foreclosures.

The dismissal of a putative class against Chase Home Finance LLC was affirmed last month by the Ohio Court of Appeals.

Chase was accused of violating the Ohio Consumer Sales Practices Act by foreclosing on a mortgage even though the note was still held by Fannie Me.

The plaintiffs claimed that the defendants were “suppliers” under the act and made material misrepresentations in a residential loan transaction. Chase also allegedly engaged in unfair and deceptive debt collection practices.

But the appeals court disagreed, according to case summary from BakerHostetler.

“The court rejected this argument, relying on the Ohio Supreme Court’s recent decision in Anderson v. Barclay’s Capital Real Estate, Inc., 136 Ohio St.3d 31, 2013-Ohio-1933, 989 N.E.2d 997, that residential mortgage servicers are not covered by the CSPA,” the summary stated. “While the plaintiff attempted to distinguish Anderson, reasoning that Anderson focused on ‘primary mortgages’ rather than mortgages that had gone into default or foreclosure, the Eighth District rejected that distinction because Anderson expressly held the ‘management of loans in default’ was not covered.

“As a result, the court found the foreclosure-related actions were not ‘consumer transactions’ and dismissed the plaintiff’s CSPA claim for lack of standing.”

The court also determined that mortgage servicers were not “suppliers” subject to CSPA.

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Mortgage Daily Staff

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