Flagstar Bank, FSB v. Moore, 2010 – Ohio – 375 Ohio Appeals Court Rejects “Rubber Stamp Method” In Adjudicating Foreclosure

From The Home Equity Theft Reporter

Ohio Appeals Court Rejects “Rubber Stamp Method” In Adjudicating Foreclosure; “Servicer Switch” Caused Payment Posting Screw-Up, Says Homeowner

The following facts have been extracted from a recent ruling of an Ohio appeals court involving a residential foreclosure action:

  • Flagstar Bank files a complaint commencing a foreclosure action against homeowners Moore and Braxton, alleging a default in the loan payments.
  • Homeowners file an answer to the complaint, asserting the following affirmative defenses: (1) failure to state a claim; (2) plaintiff was not the real party in interest; and (3) payment.
  • In connection with the “payment” defense, Moore averred in court papers to have made his monthly payments to Flagstar Bank and continued to do so through December 2006.
  • Moore averred in court papers that after he sent his December 2006 payment to Flagstar Bank, he received a letter dated December 26, 2006, advising that the note had been assigned to Countrywide Mortgage and was no longer serviced by Flagstar Bank; Moore’s December payment was returned.
  • According to Moore, at no time prior to the December 26 letter was he advised that the note had been assigned and/or that he was to direct payment other than to Flagstar Bank.
  • Moore further averred in court papers that after receiving the December 26 letter, he called Flagstar Bank and Countrywide Mortgage and both claimed the note was in default and that no payment on it would be accepted.
  • According to Moore, none of the payments made on the note from August 2006 through November 2006 were returned to him. Moore submitted copies of the checks (and postage receipts) sent to Flagstar Bank from June 2006 through November 2006.
  • Moore also averred in court papers that he never received notice of being in default on the note.

  • Flagstar Bank did not file a reply brief in the trial court addressing any of Moore’s contentions.

Despite the bank’s failure to reply to any the homeowners’ contentions, the magistrate found that no genuine issues of material fact existed and the bank was entitled to judgment as a matter of law. Moore and Braxton filed objections to the magistrate’s decision. The trial court overruled the objections and rubber-stamped the bank’s motion for summary judgment.

On appeal, Moore and Braxton contended that the trial court erred in granting the bank’s summary judgment motion. The bank did not filed a brief on appeal.

The Ohio appeals court reversed the summary judgment granted in favor of the bank.

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Flagstar Bank, FSB v. Moore, 2010-Ohio-375

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