Phh Mortgage Corp. v. Barker

940 N.E.2d 662 (2010)

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Nature of the Case

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Facts

(Sorry but all of the facts are necessary). D executed a note and a mortgage in the sum of $34,200 with First Financial Bank. The note required D to pay First Financial 360 monthly payments of $227.53. On May 1, 2007, the Barkers failed to make the required monthly payment. D testified that she suffered from an illness during this time that prevented her from contacting First Financial about the missed payments until July 2007. D testified that she left several voicemail messages about the missed payments with different First Financial representatives, but none of her calls were returned. D drove to a First Financial branch and eventually got in contact with 'loss mitigation' and was informed that a package was on its way. On July 31, 2007, First Financial sent a letter to D notifying them that as of May 1, 2007, payment on their mortgage remained due and owing and offered assistance to Ds if they were experiencing difficulties maintaining their monthly payments. In early August 2007, D received a loss-mitigation packet from an entity called 'Mortgage Service Center,' which was affiliated with First Financial. D completed the materials in the loss-mitigation packet and mailed the packet to the Mortgage Service Center on August 17, 2007. On August 20, 2007, D was notified by letter that their mortgage was in default. The letter further demanded that the Barkers pay $1,288.64 in 30 days to avoid the initiation of foreclosure proceedings. On August 29, 2007, a second notice of default was sent. Ds then received a 'coupon book' in the mail that listed a new monthly payment on the mortgage in the amount of $312.06 if paid by the first of the month or a payment of $322.16 if made by the 16th of the month. The coupon book arrived by itself with no other correspondence to provide further explanation. D made a payment of $400 at the end of August 2007 and another payment in the same amount in September. D used the new coupon book to tender a payment of $400 to a local First Financial branch office. Every time D made a payment, she did so in person at the local branch and that she always either paid in cash or had the teller deduct the payment amount from her paycheck. The teller would accept the payment and give D a receipt for the transaction. D kept the receipts in the coupon book. On October 22, 2007, First Financial sent a letter to Ds with a check enclosed in the amount of $322.16. The letter informed D that the money was being returned because their mortgage remained in default and was pending review by the foreclosure department. On October 29, 2007, First Financial sent a second letter with a check for $477.84 enclosed informing D that the money was returned because the mortgage remained in default and foreclosure proceedings were still pending. Ds testified that they never received either the letters or the checks. On October 29, 2007, D made another payment in the amount of $800 using the coupon book. Again, the teller processed the payment and gave D a receipt for the transaction. On November 7, 2007, P filed a complaint in foreclosure against the Ds based on their default on the mortgage. D continued to have communications with the loss-mitigation department, who sent her another packet of paperwork to complete and return. D testified that on November 10, 2007, she mailed the second set of loss-mitigation materials. On November 14, 2007, P sent a letter with a check refunding a payment of $800. This letter indicated that the account had 'been referred to an attorney to handle the foreclosure process.' The letter further directed Ds to call the loss-mitigation department to learn about assistance programs to help bring the mortgage current. Ds testified that they did not receive this letter at this time. D testified that she received this refund check nearly five months later, in late February or early March of 2008. In December 2007 and January 2008, D continued to make payments on the mortgage and the teller processed the payment and gave her a receipt for the transaction. D made two additional payments in this manner each in the amount of $400 on December 11, 2007, and January 3, 2008. There was no attempt by anyone to return either of these payments. Finally, on February 4, 2008, the teller at the local branch refused to accept the payment, at the direction of P and gave D a Cleveland telephone number to call for further information on the matter. D called the number which belonged to an attorney who informed her that the account was in the process of foreclosure. Shortly thereafter Ds retained counsel. P filed a motion for summary judgment claiming a default on the mortgage. It was stayed because Ds filed for Chapter 7. The trial court overruled, and 'dismissed' P's motion for summary judgment finding the existence of a genuine issue of material fact in dispute. At trial, it was discovered that a formal assignment of the note and mortgage to P did not occur until November 2007. However, there was no evidence presented that Ds were informed of either the sale or the assignment of the note and mortgage to P. The court ordered that the mortgage and the note be reinstated at the amount owed as of October 1, 2007. P appealed.