Lenders Battle Delinquent Borrowers in Ohio Courts

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MORTGAGE EXPERT
1 · 06 · 12

Ohio’s Court of Appeals of Ohio, Sixth District, recently overturned two trial court decisions in a victory for mortgage servicers. But other state courts and a federal court recently ruled in favor of delinquent borrowers.

A foreclosure complaint was filed by U.S. Bank, N.A., against Johnnie Turner on April 14, 2010. Turner’s loan balance was $68,660. The trial court granted a motion for a dismissal filed in March 2011 by Turner who claimed that U.S. Bank need to prove it owned the note.

U.S. Bank appealed the decision to the Court of Appeals of Ohio, Sixth District, which reversed the dismissal.

The same Erie County appeals court reversed a decision against Bank of America, N.A., on July 27. In that case, a foreclosure was filed in September 2009 on a $103,748 loan originally made by LaSalle Bank, N.A., to Birdia L. Edmon. In her counterclaim, Edmon alleged BofA violated the Fair Debt Collections Practices Act, the Truth in Lending Act and the Home Ownership and Equity Protection Act as well as committing “civil conspiracy.” A subsequent motion to dismiss from the borrower was granted by the Erie County Court of Common Pleas in March 2011, and BofA successfully appealed.

Yolanda Haydu appealed a summary judgment form the Summit County Court of Common Pleas in favor of Third Federal Savings & Loan Association. Haydu alleged that Third Federal had failed to state a claim on which relief could be granted and that it was not the real party in interest. The Court of Appeals of Ohio, Ninth District, ruled in favor of Haydu and reversed the judgment.

It was a similar outcome for Wells Fargo Bank in its foreclosure against Keith and Catherine Calvert. That action was originally filed in August 2008 by Huntington National Bank on a defaulted $435,000 mortgage. Before the sheriff’s sale, Steven and Melissa Cox negotiated a short sale on the Calvert’s property. While Wells Fargo, which had been substituted as the trustee, agreed to the short-sale deal through an agent, the Coxes reportedly failed to meet all the conditions of the transaction and the foreclosure completed.

The Coxes appealed the decision, and the Court of Appeals of Ohio, Ninth District, reversed the judgment and remanded the case.

Fannie Mae obtained a default judgment on Oct. 26, 2011, in a foreclosure action against Richard C. and Melissa A. Slavin. But the Court of Appeals of Ohio, Tenth District, determined that the trial court erred because the proceedings did not comply with Loc.R. 55.01 of the Franklin County Court of Common Pleas. The judgment was reversed, and the case was remanded.

Washington Mutual acquired a loan to Betty Wallace in April 2008 from Wells Fargo. But before it received an assignment and transfer of the promissory note and the delinquent home mortgage and before recording it — WaMu foreclosed. The borrower appealed the foreclosure, and the U.S. Court of Appeals, Sixth Circuit, overturned the foreclosure judgment.

On July 23, Lender Processing Services Inc., LPS Default Solutions and DOCX LLC were among eight defendants sued by nine borrowers. Fidelity National Information Services Inc, American Home Mortgage Servicing Inc. and three law firms were also named as defendants in the complaint filed in the Cuyahoga County Court of Common Pleas.

The defendants allegedly committed fraud by preparing, executing and notarizing fraudulent court documents used in the process of foreclosure. They are also accused of violating the Ohio Consumer Sales Practices Act. Class action certification is sought.

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