Legal News Reporter
Published: October 9, 2015
Wells Fargo Bank did not prove compliance with a federal regulation requiring contact with the mortgagor before foreclosing on a Summit County widow, according to a recent 9th District Court of Appeals ruling.
Appellant Samira Awadallah appealed a foreclosure decree in Summit County Common Pleas Court.
Case summary indicates Awadallah and her husband signed a promissory note and mortgage from First Merit Mortgage Corp. in 2002. The note and mortgage were prepared on Federal Housing Administration forms and stated that acceleration and foreclosure are not authorized unless allowed by Housing and Urban Development regulations.
Wells Fargo later became the holder of the note and mortgage.
Awadallah defaulted on the loan after her husband died in 2008.
In 2009, she agreed to a loan modification with the bank. Two years later, Wells Fargo gave her a second loan modification and she again defaulted.
The bank filed foreclosure action after sending Awadallah a letter with a deadline of when she needed to bring the account current. Wells Fargo also sent her a certified letter asking to meet in person for possible solutions to bring the loan current before filing the action.
In her answer and counterclaim, Awadallah argued Wells Fargo breached its contract because employees never gave her a face-to-face interview or made reasonable efforts to do so.
Mediation was not successful, and summary judgment was granted on Wells Fargo’s complaint and the counterclaim.
Awadallah said Wells Fargo failed to comply with 24 C.F.R. 203.604, which states, “A reasonable effort to arrange a face-to-face meeting with the mortgagor shall consist at a minimum of one letter sent to the mortgagor certified by the Postal Service as having been dispatched. Such a reasonable effort to arrange a face-to-face meeting shall also include at least one trip to see the mortgagor at the mortgaged property.”
Awadallah claimed that Wells Fargo did not make reasonable efforts to visit her home.
Unless an exception applies, 24 C.F.R. 203.604(d) requires both a certified letter and at least one trip to the mortgaged property, 9th District Judge Beth Whitmore wrote in her 3-0 opinion.
“Wells Fargo’s argument that foreclosure is not complete until the filing of the confirmation of sale is also unpersuasive,” Whitmore stated. “The regulations specify that HUD servicing requirements are to be met before initiating foreclosure. … Wells Fargo did not present any evidence that the two loan modifications with Ms. Awadallah were arranged during a personal interview or that any other exception applied.”
Appellate judges Jennifer Hensal and Julie Schafer agreed Wells Fargo was not entitled so summary judgment, so the case was reversed and remanded.
Wells Fargo Bank, N.A. v. Awadallah is cited 2015-Ohio-3753.