Servicers Struggle With Ohio Foreclosures

A class action settlement that was reached in Ohio by Midland Funding LLC, Midland Credit Management Inc. and Encore Capital Group Inc. with borrowers who alleged robo-signing was approved by a federal judge. But eight borrowers objected to the settlement — claiming that the settlement was unfair, unreasonable, and inadequate — and appealed the approval of the settlement. The U.S. Court of Appeals, Sixth Circuit, reversed the district court ruling on Feb. 26 and vacated the judgment certifying the nationwide settlement class and the award of attorney fees.

Chase Home Finance LLC was sued by Lawrence Glazer, who claimed that Chase didn’t have title to the loan when it foreclosed on his property. The trial court ruled against him, and he appealed. The U.S. Court of Appeals, Sixth Circuit, reversed the portion dismissing Glazer’s Fair Debt Collection Practices Act claims against Reimer, Arnovitz, Chernek & Jeffrey Co. LPA. The portion dismissing Glazer’s state-law claims was vacated.

“We hold that mortgage foreclosure is debt collection under the act,” the decision stated. “Lawyers who meet the general definition of a ‘debt collector’ must comply with the FDCPA when engaged in mortgage foreclosure.”

HSBC Bank USA, N.A., as trustee for Home Equity Loan Trust Series ACE 2006-HE1, filed a complaint to foreclose on a mortgage executed by Robert and Johna Warner. The Warners moved to dismiss the action because, they claim, HSBC had failed to allege that it was both “owner” and “holder” of the note and mortgage. The Erie County Court of Common Pleas granted the dismissal.

HSBC filed an appeal with the Court of Appeals of Ohio, Sixth District, which said it had previously held that a plaintiff need not allege or establish that it is both the holder and owner of a promissory note to be considered the real party in interest entitled to enforce the note. The appeals court determined that the trial court erred in dismissing the complaint and reversed the decision.

Another decision out of the sixth district was the reversal of a foreclosure judgment in January because the lender’s affidavit failed to satisfy Ohio requirements. The foreclosure complaint was originally filed on Oct. 27, 2010, by CitiMortgage Inc. against Robert O. Brunner, Harriett L. Brunner, Michael B. Brunner and Anne M. Brunner. Fannie Mae was substituted as plaintiff in March 2011. An affidavit signed by Enan Del Rio in June 2011 was determined by the appellate court to be inadequate.

A Jan. 4 decision from the sixth district reversed a summary judgment in favor of U.S. Bank, N.A., because the appellants demonstrated the existence of a genuine issue of material fact. The borrowers had been on a trial loan modification plan but were delinquent in making the trial payments — leading to the denial of their modification. The foreclosure filing followed. The borrowers appealed the trial court decision on the basis that there was a question as to whether U.S. Bank held to note prior to filing the complaint.

The sixth district reversed a judgment in favor of OneWest Bank, FSB, against Matthew O. and Kathi Yevtich. The Court of Appeals of Ohio, Sixth District, noted in the decision that OneWest didn’t obtain a justiciable interest in this lawsuit until the mortgage was assigned to it in January 2010 and therefore lacked standing to invoke the subject-matter jurisdiction of the court when it filed its complaint in September 2009.

The Cuyahoga County Court of Common Pleas dismissed a foreclosure action filed on March 22, 2012, against Wilhelm G. Speigelberg II and Anna Marie Speigelberg by MidFirst Bank. In their motion to dismiss the $76,156 lawsuit for failure to state a claim upon which relief could be granted, the Speigelbergs’ sole basis for the motion was the assertion that MidFirst lacked standing to pursue the action because it had failed to register with the Ohio Secretary of State as a foreign corporation.

MidFirst appealed the dismissal, and the Court of Appeals of Ohio, Eighth District, reversed the trial court’s decision.

A foreclosure originally filed in September 2009 by BAC Home Loans Servicing against Dwayne R. Henderson was completed on April 15, 2010. But two days prior to the scheduled sheriff’s sale, Henderson filed a Chapter 13 petition for bankruptcy and the sale was withdrawn. Once the bankruptcy was dismissed, the property was again set for sheriff’s sale in June 2012. However, the second of two requests for mediation by Henderson was approved by the trial court, and BofA’s counsel missed the session — prompting the court to vacate the earlier foreclosure judgment and dismiss BofA’s claims without prejudice.

BofA appealed the decision, and the Court of Appeals of Ohio, Eighth District, reversed the decision and remanded the case.

The Court of Appeals of Ohio, Eighth District, determined on Dec. 27 that borrower Karen Rudolph’s arguments filed to demonstrate that Deutsche Bank National Trust Co. lacked standing to foreclosure against her. The trial court decision to grant her dismissal was reversed.

A complaint for foreclosure was filed against Thomas D. Parks in November 2005. After Parks didn’t answer the complaint, the house was sold at a sheriff’s sale in June 2006. But Parks filed a motion to vacate the judgment, and the sale was ordered in January 2007 to be vacated. Wells Fargo was substituted as plaintiff in April 2008 and obtained a summary judgment. Parks filed a motion for relief from judgment which was denied in February 2012. So he filed an appeal with the Court of Appeals of Ohio, Ninth District, and the summary judgment was overturned.

A judgment by the Summit County Court of Common Pleas in favor of Wells Fargo Bank, N.A., was reversed by Ohio’s ninth circuit court of appeals. After the $162,800 loan to James R. and Debra K. Burrows became delinquent, Wells Fargo filed an instant foreclosure action in December 2009. The Burrows moved to dismiss the case because Wells Fargo allegedly didn’t have standing. The appeals court agreed with the Burrows.