[Cite as Wells Fargo Bank, N.A. v. Mears, 2019-Ohio-242.]




                            IN THE COURT OF APPEALS OF OHIO
                               SECOND APPELLATE DISTRICT
                                   MONTGOMERY COUNTY

 WELLS FARGO BANK, N.A.                               :
                                                      :
         Plaintiff-Appellee                           :     Appellate Case No. 27995
                                                      :
 v.                                                   :     Trial Court Case No. 2017-CV-1431
                                                      :
 JOYCE D. MEARS aka JOYCE                             :     (Civil Appeal from
 MEARS, et al.                                        :      Common Pleas Court)
                                                      :
         Defendant-Appellant                          :


                                              ...........

                                              OPINION

                          Rendered on the 25th day of January, 2019.

                                              ...........

JAMES W. SANDY, Atty. Reg. No. 0084246, 3401 Tuttle Road, Suite 200, Cleveland,
Ohio 44122
      Attorney for Plaintiff-Appellee

GABRIELLE R. NEAL, Atty. Reg. No. 0092770, 7925 Paragon Road, Dayton, Ohio 45459
     Attorney for Defendant-Appellant

                                            .............
                                                                                             -2-


FROELICH, J.

       {¶ 1} Joyce D. Mears appeals from a judgment and decree of foreclosure in favor

of Wells Fargo Bank, N.A. on its reverse mortgage foreclosure claim. Mears claims that

the trial court erred in granting summary judgment to Wells Fargo because Wells Fargo

failed to establish that it complied with all conditions precedent to filing its action. For the

following reasons, the trial court’s judgment will be reversed and the case remanded for

further proceedings.

                            I. Factual and Procedural History

       {¶ 2} On September 24, 2009, Mears executed a Home Equity Conversion Loan

Agreement (reverse mortgage agreement), which allowed Mears to borrow against the

equity in her home. Along with the agreement, Mears executed an adjustable rate note

for the amounts advanced by Wells Fargo; no specific amount was specified, as the

amount of the loan depended on the draws made by Mears on the account. The loan

was secured by a “reverse mortgage” on her residential property in Miamisburg, Ohio.

       {¶ 3} Under the terms of the note and mortgage, Wells Fargo was entitled to seek

immediate payment in full, upon approval by an authorized representative of the secretary

of Housing and Urban Development (HUD), if Mears defaulted on her obligations. The

mortgage required Wells Fargo to notify HUD and Mears when the loan became due and

payable.   It also provided that Wells Fargo “shall not have the right to commence

foreclosure until Borrower has had thirty (30) days after notice to * * * [c]orrect the matter

which resulted in the Security Instrument coming due and payable[.]”

       {¶ 4} Paragraph two of the Uniform Covenants in the mortgage required Mears to

pay “all property charges consisting of taxes, ground rents, flood and hazard insurance
                                                                                       -3-


premiums, and special assessments in a timely manner, and shall provide evidence of

payment to Lender, unless Lender pays property charges by withholding funds from

monthly payments due to the Borrower or by charging such payments to a line of credit

as provided for in the Loan Agreement.” Paragraph 2.10.1 of the loan agreement also

addressed payment of property charges, stating: “Borrower has elected to require Lender

to use Loan Advances to pay property charges consisting of taxes, hazard insurance

premiums, ground rents and special assessments if indicated on the attached payment

plan (Exhibit1). Borrower may change this election by notifying Lender and at that time

Lender shall pay to Borrower any amounts withheld from the Loan Advances to pay

property charges.” Mears’s loan agreement did not include an Exhibit 1 or any other

document showing that Mears had elected to require Wells Fargo to use loan advances

to pay property charges.

      {¶ 5} On January 23, 2017, Wells Fargo sent a notice of default letter, dated

January 20, 2017, to Mears by first-class mail. Wells Fargo informed Mears that it had

advanced funds in the amount of $4,873.18 for past due property charges (taxes) and

that the loan was now due and payable. The letter stated that Mears could bring her

reverse mortgage account current by paying the past due property charges of $4,873.18

by February 19, 2017.

      {¶ 6} On March 21, 2017, Wells Fargo filed a complaint in foreclosure, alleging that

it was entitled to enforce the note and mortgage, that grounds for acceleration had

occurred, that $220,681.13 was due and owing as of March 14, 2017, and that additional

amounts would accrue while the action was pending. Wells Fargo indicated that it was

not seeking a personal judgment on the note. Wells Fargo alleged that the mortgage
                                                                                         -4-


constituted a valid first lien on the property, that it had complied with all conditions

precedent, and that it was entitled to have the mortgage foreclosed.

       {¶ 7} Mears filed an answer. She denied that Wells Fargo had complied with all

conditions precedent and that Wells Fargo was entitled to foreclose on the mortgage.

Mears alleged, as affirmative defenses, that Wells Fargo failed to provide notice of default

under the note and notice to cure under the mortgage, which she described as conditions

precedent. She further alleged that Wells Fargo failed to comply with applicable FHA

servicing rules and guidelines, including by failing to arrange for a face-to-face meeting

with Mears and by failing to obtain approval of the secretary of HUD for immediate

repayment in full.

       {¶ 8} On August 17, 2017, Wells Fargo moved for summary judgment on its

foreclosure claim. Wells Fargo argued that it was the real party in interest, that Mears

defaulted by failing to pay taxes, that Wells Fargo sent Mears a notice of default, and that

the default was not cured. Further, Wells Fargo argued that Mears had no evidence to

support her affirmative defenses and that HUD regulations did not require a face-to-face

meeting. Wells Fargo supported its motion with an affidavit by Sherri W. McManus, Vice

President Loan Documentation for Wells Fargo, and supporting exhibits

       {¶ 9} Mears opposed Wells Fargo’s motion. She claimed that Wells Fargo failed

to obtain approval from HUD prior to seeking foreclosure and that it failed to provide her

30 days to cure the default. Mears further claimed that there was a genuine issue of

material fact regarding her obligation to pay taxes and, therefore, whether she had

breached the loan agreement.       Mears asked the trial court to deny Wells Fargo’s

summary judgment motion and to grant her summary judgment on its claim. Mears
                                                                                          -5-


relied on Wells Fargo’s evidentiary materials and did not provide any additional evidence.

       {¶ 10} In its reply memorandum, Wells Fargo claimed that it was not required to

establish that it obtained HUD approval, stating that no regulation or Ohio case law

required HUD approval prior to filing the foreclosure action. It further argued that it sent

the required notice of default and established that Mears breached the agreement.

Mears responded that both the loan documents and HUD regulations required HUD’s

approval prior to acceleration of the debt. She further reiterated that the notice of default

did not provide 30 days to cure the default.

       {¶ 11} On March 16, 2018, the trial court filed a decision holding in abeyance its

ruling on the motions for summary judgment, finding that evidence before it regarding

whether Wells Fargo obtained approval from HUD was insufficient for the court to grant

either motion for summary judgment. The court further found that “additional evidence

may allow the Court to grant one or the other of the motions.” (Emphasis sic.) The

court ordered the parties to submit supplemental memoranda and evidence solely on the

issue of whether Wells Fargo complied with the HUD approval requirements and, if it did

not, whether such non-compliance constituted failure of a condition precedent or an

equitable affirmative defense to foreclosure.

       {¶ 12} Wells Fargo provided a supplemental affidavit and a supporting document,

stating that it had received approval from HUD to proceed with the foreclosure action.

Mears filed a supplemental memorandum, arguing that Wells Fargo’s supplemental

evidence did not establish HUD approval. Mears also argued that the failure to obtain

HUD approval was a condition precedent.

       {¶ 13} On April 27, 2018, the trial court granted Wells Fargo’s motion for summary
                                                                                         -6-


judgment and denied Mears’s cross-motion for summary judgment.              The trial court

concluded that (1) Wells Fargo was the holder of the note and mortgage and was entitled

to enforce them, (2) Mears defaulted on her obligations by failing to pay taxes on the

property, and (3) Wells Fargo complied with the conditions precedent to filing the

foreclosure action, namely the requirements to notify and seek approval from HUD and

to provide Mears 30 days to cure the default. Finally, the trial court found that there were

no genuine issues of material fact as to the amount of principal and interest due to Wells

Fargo. The same day, the trial court entered a judgment and decree of foreclosure.

       {¶ 14} Mears appeals from the trial court’s judgment and decree of foreclosure,

claiming that the trial court erred in granting summary judgment to Wells Fargo. She

asserts that Wells Fargo failed to establish that it had HUD’s approval prior to filing its

foreclosure action and that it failed to provide 30 days to Mears to cure the default.

                           II. Summary Judgment Standard

       {¶ 15} Pursuant to Civ.R. 56(C), summary judgment is proper when (1) there is no

genuine issue as to any material fact, (2) the moving party is entitled to judgment as a

matter of law, and (3) reasonable minds, after construing the evidence most strongly in

favor of the nonmoving party, can only conclude adversely to that party. Zivich v. Mentor

Soccer Club, Inc., 82 Ohio St.3d 367, 369-370, 696 N.E.2d 201 (1998). The moving

party carries the initial burden of affirmatively demonstrating that no genuine issue of

material fact remains to be litigated. Mitseff v. Wheeler, 38 Ohio St.3d 112, 115, 526

N.E.2d 798 (1988). To this end, the movant must be able to point to evidentiary materials

of the type listed in Civ.R. 56(C) that a court is to consider in rendering summary

judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996).
                                                                                            -7-


       {¶ 16} Once the moving party satisfies its burden, the nonmoving party may not

rest upon the mere allegations or denials of the party’s pleadings. Dresher at 293; Civ.R.

56(E). Rather, the burden then shifts to the nonmoving party to respond, with affidavits

or as otherwise permitted by Civ.R. 56, setting forth specific facts that show that there is

a genuine issue of material fact for trial. Dresher at 293. Throughout, the evidence

must be construed in favor of the nonmoving party. Id.

       {¶ 17} We review the trial court’s ruling on a motion for summary judgment de

novo. Schroeder v. Henness, 2d Dist. Miami No. 2012 CA 18, 2013-Ohio-2767, ¶ 42.

De novo review means that this court uses the same standard that the trial court should

have used, and we examine the evidence, without deference to the trial court, to

determine whether, as a matter of law, no genuine issues exist for trial. Ward v. Bond,

2d Dist. Champaign No. 2015-CA-2, 2015-Ohio-4297, ¶ 8.

       {¶ 18} To prevail on a motion for summary judgment in a foreclosure action, the

plaintiff must prove: (1) it is the holder of the note and the mortgage, or is a party entitled

to enforce them; (2) if the plaintiff is not the original mortgagee, the chain of assignments

and transfers; (3) the mortgagor is in default; (4) all conditions precedent have been met;

and (5) the amount of principal and interest due. U.S. Home Ownership, LLC v. Young,

2018-Ohio-1059, 109 N.E.3d 681, ¶ 7 (2d Dist).

                              III. Evidence of HUD Approval

       {¶ 19} Part 206 of the Code of Federal Regulations, Title 24, concerns the Home

Equity Conversion Mortgage Insurance program, or reverse mortgages.                24 C.F.R.

206.27, which sets forth the required provisions of a reverse mortgage, includes

provisions about when the mortgage comes due and payable. Of relevance, 24 C.F.R.
                                                                                     -8-


206.27(c)(2) states:

      (2) The mortgage shall state that the outstanding loan balance shall be due

      and payable in full, upon approval of the [HUD] Commissioner, if any of the

      following occur:

      (i) The property ceases to be the principal residence of a borrower for

      reasons other than death and the property is not the principal residence of

      at least one other borrower;

      (ii) For a period of longer than 12 consecutive months, a borrower fails to

      occupy the property because of physical or mental illness and the property

      is not the principal residence of at least one other borrower;

      (iii) The borrower does not provide for the payment of property charges in

      accordance with § 206.205; or

      (iv) An obligation of the borrower under the mortgage is not performed.

(Emphasis added.) Mears’s note and mortgage contained provisions consistent with this

regulation. Further, 24 C.F.R. 206.125(a)(1) requires that the mortgagee, i.e., Wells

Fargo, “shall notify the Commissioner within 30 days when one of the conditions stated

in the mortgage, as required by § 206.27(C)(2), has occurred.”

      {¶ 20} In response to the trial court’s request for supplemental memoranda

regarding Wells Fargo’s receipt of approval from HUD to pursue foreclosure, Wells Fargo

submitted a supplemental affidavit from McManus. McManus stated:

      4. Joyce D. Mears defaulted under the terms of the Note, the Payment

      Plan, and the Mortgage securing the Note. Upon her default, Wells Fargo

      requested approval from the Department of Housing and Urban
                                                                                     -9-


      Development in order to file a foreclosure. Wells Fargo received approval

      from HUD on November 21, 2016.

McManus indicated that a “true and accurate” copy of the “HUD approval letter” was

attached as Exhibit B.

      {¶ 21} Exhibit B consisted of correspondence, dated November 21, 2016, from

NOVAD Management Consulting to Wells Fargo. The top of the correspondence had

an FHA Case Number, which had been redacted, and identified the borrower as Mears.

Below that information was a series of options: “Request APPROVED”, “Request

DENIED”, and “Request PENDING (see below)” for a menu of “backup documentation”

that was still needed.   The box beside “Request APPROVED” was selected.           The

bottom of the document had “Date of Default: 10/18/2016,” and the document was

“signed” with the typed name “Author Wigfall,” a “Default Loan Specialist.” Next to the

signature line was the typewritten date of November 21, 2016.

      {¶ 22} The trial court found that Wells Fargo’s evidence was sufficient to

demonstrate that Wells Fargo had received approval from HUD to demand payment in

full and that no genuine issue of material fact existed. The court reasoned:

      * * * As Mears points out, the Letter is on the letterhead of NOVAD

      Management Consulting and states “Request APPROVED”; it does not

      explicitly state that HUD has approved acceleration of the amount due

      under the Note and filing the foreclosure.       However, the Letter also

      includes an FHA Case #, which has been redacted, and the borrower’s

      name, which is Joyce D. Mears.       Further, while not checked here, the

      Letter includes several checkboxes for failure to provide the following
                                                                                          -10-


       documents, all of which relate to a mortgage. Finally, in her Supplemental

       Affidavit, McManus states that upon Mears’ default, “Wells Fargo requested

       approval from [HUD] in order to file a foreclosure. Wells Fargo received

       approval from HUD on November 21, 2016.” Significantly, Mears has not

       pointed to any facts showing that Wells Fargo did not obtain such approval.

(Footnote omitted.)

       {¶ 23} Mears argues on appeal, as she did in the trial court, that there is nothing

in the letter indicating what Wells Fargo had requested, nor was there any reference to

HUD.    Mears argues that neither Exhibit B nor McManus’s affidavit indicates what

relationship, if any, NOVAD had to Mears’s loan or to HUD.1 Mears thus asserts that

Exhibit B is insufficient to establish that Wells Fargo received approval from HUD to

demand payment in full. Mears further argues that, in inferring that NOVAD’s letter was

an authorization from HUD, the trial court improperly viewed the evidence in the light most

favorable to Wells Fargo, not to her.



1
 In her reply brief, Mears argues that the delegation of governmental authority must be
accomplished in accordance to law.               She refers us to the HUD website:
https://www.hud.gov/delegations-of-authority, and she cites to an announcement of a
delegation of the Secretary of HUD’s authority, reported in 80 Fed.Reg. 21756. Wells
Fargo has moved to strike the Federal Register attachment.
        In reviewing the trial court’s judgment, we are limited to the record before the trial
court. E.g., Kahler v. Eytcheson, 2d Dist. Montgomery No. 23523, 2012-Ohio-208, ¶ 23.
Accordingly, we cannot consider the information from the HUD website, which was not
presented to the trial court. We likewise will not consider the Federal Register
attachment. The Federal Register contains four types of documents: presidential
documents, rules, proposed rules, and notices; not all documents have legal effect and
general applicability to the public. Mears’s attachment indicates that it is from the
“Notices” section of the Federal Register, and it appears to be akin to an exhibit, which
we cannot consider for the first time on appeal, rather than a source of legal authority,
which we could consider. Because the notice was not submitted to the trial court, it is
not properly before us. Wells Fargo’s motion to strike is granted.
                                                                                        -11-


      {¶ 24} Viewing the evidence in the light most favorable to Mears, we agree with

her that genuine issues of material fact exist as to whether Wells Fargo received

authorization from HUD to require immediate repayment in full from Mears. McManus’s

affidavit states that, upon Mears’s default, Wells Fargo requested approval from HUD in

order to file a foreclosure action and received that approval on November 21, 2016.

McManus provided no documentation of Wells Fargo’s request for approval.              She

identified Exhibit B as documentation of HUD’s approval of Wells Fargo’s alleged request

to seek immediate repayment in full. However, there is nothing in Exhibit B that identifies

NOVAD as an authorized representative of HUD, either for purposes of approving a

demand for immediate repayment in full or for any other purpose. McManus’s affidavit

also fails to identify NOVAD’s association, if any, with HUD.

      {¶ 25} Wells Fargo argues, citing Wells Fargo Bank, N.A. v. Schindler, No. 3728

EDA 2015, 2017 WL 1078672 (Pa.Super. Mar. 22, 2017), that at least one other court

has affirmed a grant of summary judgment to Wells Fargo in a reverse mortgage

foreclosure action based on similar evidence. In Schindler, the superior court addressed

Wells Fargo’s notice to the borrower and HUD approval, stating:

      Upon review of the record, Wells Fargo provided the requisite notice to

      Appellant by letter dated May 15, 2013, which specifically highlighted the

      above-mentioned courses of action. [Wells Fargo Motion for Summary

      Judgment, 10/2/2014,] at Exhibit A.       Wells Fargo did not institute its

      foreclosure action until October 18, 2013, more than 30 days after providing

      notice on May 15, 2013. Moreover, Deval, LLC (Deval) was Wells Fargo’s

      loan servicing contractor through HUD. See id. at Exhibit M. Deval gave
                                                                                        -12-


       Wells Fargo approval for the reverse mortgage to become due and payable

       in a letter dated May 31, 2013. See id. at Exhibit H. There is no dispute

       that Appellant never corrected the damage that led him to end his residency

       in the mortgage property or paid the mortgage balance in full.

Schindler at * 5.

       {¶ 26} Schindler does not describe the exhibits provided by Wells Fargo in support

of its summary judgment motion. Nevertheless, the trial court was able to conclude,

based on Exhibit M, that Deval was a loan servicing contractor through HUD; we have no

evidence from which to make a similar conclusion regarding NOVAD. In addition, the

NOVAD letter did not indicate that its approval was for Mears’s loan to be immediately

due and payable. Without additional information about Exhibit H in Schindler, we cannot

evaluate whether the Pennsylvania court reached its conclusion based on a similarly

sparse letter or, instead, a more detailed approval letter. We therefore find Schindler to

be distinguishable and not persuasive.

       {¶ 27} Furthermore, we disagree with Wells Fargo’s suggestion that McManus’s

affidavit alone satisfies any burden it has to establish HUD’s approval.             Again,

McManus’s affidavit states that, after Mears’s default, Wells Fargo “requested approval

from the Department of Housing and Urban Development in order to file a foreclosure.

Wells Fargo received approval from HUD on November 21, 2016.” Even assuming that

those broad statements would be sufficient to meet Wells Fargo’s summary judgment

burden, McManus’s statements cannot be viewed in isolation, given that she cited to the

NOVAD correspondence to support her averment that HUD had approved Wells Fargo’s

request.   And, as stated above, we must construe the evidence in the light most
                                                                                       -13-


favorable to Mears, not to Wells Fargo.       Stated simply, the NOVAD letter raises

questions about whether Wells Fargo received approval from a representative of HUD

and what approval was received.

       {¶ 28} Even if we could infer that NOVAD was an approved representative of HUD,

it is unclear whether Wells Fargo received approval to pursue foreclosure based on the

property charge advancement of $4,873.18.        McManus did not identify the date of

Mears’s default in either affidavit.   The January 2017 notice of default, attached as

Exhibit E to McManus’s first affidavit, informed Mears that Wells Fargo had advanced

$4,873.18 for property charges, which resulted in a default.       Mears’s loan balance

history, attached as Exhibit D to McManus’s first affidavit, shows that Wells Fargo

advanced $4,873.18 on October 24, 2016. The NOVAD approval letter identified the

date of default as October 18, 2016; the loan balance history shows that Wells Fargo

advanced $1,010.80 on October 18, 2016. Stated simply, the amount advanced on

October 18, 2016 ($1,010.80), the apparent date of default, does not correspond to the

amount identified as the default amount in the January 2017 notice of default. There is

nothing in the notice of default to suggest that Mears was in default due to the $1,010.18

advancement or that HUD, through NOVAD or in any other fashion, had authorized

foreclosure based on the $1,010.80 advancement.

       {¶ 29} Finally, Mears asserted at oral argument that we should not apply our

statements in Wells Fargo Bank, N.A. v. Herman, 2d Dist. Montgomery No. 27854, 2018-

Ohio-3700, regarding the effect of HUD’s disclaimer of interest in real property contained

in its answer to a foreclosure complaint. In Herman, an appeal from a default judgment

against a homeowner in a reverse mortgage foreclosure action, the homeowner also
                                                                                         -14-


raised that the mortgagee had failed to obtain approval from HUD to accelerate her loan.

We held that the homeowner’s failure to file an answer constituted an admission that

Wells Fargo had complied with all conditions precedent to filing its action. We further

noted, citing Nationstar Mortgage, LLC v. Parish, 7th Dist. Mahoning No. 14 MA 0176,

2016-Ohio-6975, that HUD’s disclaimer of an interest in the property in its answer made

it “difficult to see how [Wells Fargo’s] failure to notify and seek permission from the

Secretary [of HUD] affected [the homeowner’s] substantive rights.” Herman at ¶ 21.

       {¶ 30} We decline to apply our statements regarding the effect of the disclaimer in

Herman for several reasons. First, given that the homeowner in Herman had failed to

file an answer, these statements were unnecessary to the outcome of the case and were,

consequently, dicta.   Second, Wells Fargo has not argued in this case that HUD’s

subsequent disclaimer obviated the requirement that it (Wells Fargo) seek approval prior

to demanding payment in full. Finally, in stating that HUD does not have an interest in

the Mears’s property, the government’s answer further states that “[t]he current balance

of Defendant Joyce D. Mears indebtedness to the United States is zero ($0.00).” Thus,

the disclaimer appears to relate to HUD’s financial interest in the property for purposes of

foreclosure and sale, not to its role as a regulatory agency regarding reverse mortgages.

The pre-acceleration approval requirement appears to be separate from whether HUD

has any financial interest in the property, which could occur, for example, if the lender

went defunct.

       {¶ 31} Accordingly, construing the evidence in Mears’s favor, as we are required

to do in reviewing Wells Fargo’s motion for summary judgment, there is a genuine issue

of material fact as to whether Wells Fargo sought and obtained approval from HUD to
                                                                                        -15-


seek immediate repayment in full based on the advancement of $4,873.18 on October

24, 2016 for property charges. With the evidence before us, the trial court thus erred in

finding that no genuine issues of material fact exist as to whether Wells Fargo sought and

obtained HUD’s approval prior to demanding immediate repayment of the loan from

Mears. Accordingly, the trial court erred in granting summary judgment to Wells Fargo

on its foreclosure claim.

                                   III. Notice of Default

       {¶ 32} The notification to be provided by the mortgagee to the borrower upon

default is set forth in 24 C.F.R. 206.125(a)(2). It states:

       After notifying and receiving approval of the Commissioner when needed,

       the mortgagee shall notify the borrower * * * within 30 days of the later of

       notifying the Commissioner or receiving approval, if needed, that the

       mortgage is due and payable. The mortgagee shall give the applicable

       party 30 days from the date of notice to engage in the following actions:

       ***

       (iv) Correct the condition which resulted in the mortgage coming due and

       payable for reasons other than the death of the last surviving borrower[.]

       {¶ 33} Mears’s mortgage similarly required Wells Fargo to notify HUD and Mears

when the loan became due and payable. It further stated that Wells Fargo “shall not

have the right to commence foreclosure until Borrower has had thirty (30) days after notice

to * * * [c]orrect the matter which resulted in the Security Instrument coming due and

payable[.]” (Uniform Covenants, ¶ 9(d).)

       {¶ 34} We have held that “[w]here prior notice of default and/or acceleration is
                                                                                       -16-


required by a provision in a note or mortgage instrument, the provision of notice is a

condition precedent.” Wells Fargo Bank, N.A. v. Scott, 2d Dist. Montgomery No. 26552,

2015-Ohio-3269, ¶ 19, quoting First Fin. Bank v. Doellman, 12th Dist. Butler No. CA2006-

02-09, 2007-Ohio-222, ¶ 20; see also Parish, 7th Dist. Mahoning No. 14 MA 0176, 2016-

Ohio-6975, ¶ 20.

      {¶ 35} McManus stated in her affidavit that a notice of default was sent by first-

class mail to Mears. The notice of default, dated January 20, 2017, was attached to

McManus’s affidavit, as was documentation regarding the mailing of the notice. The

documentation regarding the mailing of the notice indicated that the letter was mailed by

first-class mail on January 23, 2017.

      {¶ 36} The notice of default informed Mears that Wells Fargo had “advanced funds

to pay past due property charges on [her] behalf” and that, because Mears had not repaid

the funds, her reverse mortgage loan was due and payable. The letter indicated that, if

Mears wished to remain in her home, she had several options. One option was to bring

her reverse mortgage account current by repaying the past due property charges in the

amount of $4,873.18 by February 19, 2017. February 19, 2017 was thirty days after

January 20, 2017, the date of the notice.

      {¶ 37} Section 2 of the notice of default was titled, “What happens if you do not

respond within 30 days.” This section emphasized that Mears had 30 days to respond

to the notice. It stated that if Mears did not select a repayment option within 30 days of

the notice, HUD guidelines required that Wells Fargo begin the foreclosure process within

three months, but not less than one month. This section further indicated that Mears

could request an extension from HUD to repay the entire mortgage; the deadline to
                                                                                           -17-


request an extension was also February 19, 2017.

       {¶ 38} Mears argues that she did not receive 30 days to cure her default, because

the notice was not sent until January 23, 2017, and she was given only until February 19,

2017 (less than 30 days) to respond. The trial court rejected Mears’s argument, stating:

       There is no dispute that Wells Fargo filed the Complaint on March 21, 2017,

       fifty-seven days after the Notice was sent to Mears, via first-class mail, on

       January 23, 2017. While the Notice informed Mears that she had until

       February 19, 2017 (less than thirty days) to cure the default, the Notice was

       dated January 20, 2017 and stated in several places, in bold-face type, that

       Mears had thirty days to respond. Despite this, Mears failed to respond to

       the Note or cure the default for fifty-seven days. Significantly, Mears has

       not pointed to any facts showing that she was misled or confused by the

       Notice.

       {¶ 39} We agree with the trial court that Wells Fargo complied with the

requirements of the federal regulations and the loan documents. The notice of default

was dated January 20, 2017, and informed Mears that she had 30 days – until February

19, 2017 -- to take action to cure her default. The notice was not mailed until January

23, 2017, but Wells Fargo did not take any action against Mears within 30 days of January

23, 2017. Wells Fargo filed its foreclosure action on March 21, 2017, which was more

than 30 days after the mailing of the notice. Mears does not claim that she did not

receive the notice or that she attempted to cure the default within 30 days of its mailing

but was not permitted to do so. The trial court did not err in its determination of this issue.

                                       IV. Conclusion
                                                                                       -18-


      {¶ 40} In summary, the trial court did not err in its ruling regarding the notice of

default. However, genuine issues of material fact exist as to whether Wells Fargo sought

and obtained HUD’s approval, based on the non-payment of $4,873.18 in property

charges as claimed in the summary judgment motion, prior to demanding immediate

repayment of the loan from Mears. Accordingly, the trial court erred in granting summary

judgment to Wells Fargo on its foreclosure claim.

      {¶ 41} The trial court’s judgment will be reversed, and the matter will be remanded

for further proceedings.

                                    .............



DONOVAN, J., concurs.

HALL, J., dissenting:

      {¶ 42} I agree there is no genuine issue of material fact that Wells Fargo complied

with its obligation to provide 30 days’ notice of default before initiating foreclosure. I

disagree with the conclusion that a genuine issue of material fact exists as to whether

Wells Fargo had obtained HUD approval to foreclose on this undeniably delinquent

reverse mortgage. Wells Fargo provided an uncontested affidavit definitively indicating it

obtained HUD approval to foreclose, and criticism of a document attached to that affidavit

is pure speculation and conjecture that does not create a genuine issue of material fact.

The trial court’s grant of summary judgment should be affirmed.

      {¶ 43} “Upon [Joyce D. Mears’s] default, Wells Fargo requested approval from the

Department of Housing and Urban Development in order to file a foreclosure. Wells Fargo

received approval from HUD on November 21, 2016.” (McManus affidavit filed March 30,
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2018). That sworn averment, by itself, is sufficient to impose upon the defendant the

reciprocal burden to present some evidence to the contrary. Dresher, 75 Ohio St.3d 280,

293, 662 N.E.2d 264. The majority’s criticism that the lender did not provide

“documentation of Wells Fargo’s request for approval,” above at ¶ 24, turns the summary

judgment burden upside down. There was no requirement in this instance that

documentation be submitted.

       {¶ 44} The majority justifies its denial of summary judgment by speculating that the

document attached to the affidavit identified as “the HUD approval letter (Exhibit B)”

“raises questions” about the approval. First, I repeat, a document is not necessary when

the facts in an affidavit are not contested. But secondly, any questions are in the eye of

the beholder, not evidence or reasonable inference upon which to create a genuine issue.

The attachment is definitively a communication to Wells Fargo about an FHA case in the

name of Joyce D. Mears indicating “request approved.” The letter is on letterhead of

NOVAD Management Consulting, likely a vendor for HUD or a servicer of Wells Fargo.

Regardless of how, or from whom, Wells Fargo was notified of approval from HUD,

nothing suggests that the letter is anything other than a communication indicating HUD

had approved proceeding with the foreclosure. Most concerning, the criticism of the

document is without presentation of any affidavit or evidence from the nonmoving party.

       {¶ 45} Finally, the majority ignores our own previous observation that when HUD

is in fact a party to the foreclosure, and HUD has filed a disclaimer in the action (as in this

case), the borrower “could not have mounted a successful defense based on the alleged

lack of HUD approval.” Herman, 2d Dist. Montgomery No. 27854, 2018-Ohio-3700, ¶ 18.

The majority now refers to the Herman conclusion as “dicta” not to be followed. But that
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conclusion was based on the case we then cited, Parish, 7th Dist. Mahoning No. 14 MA

0176, 2016-Ohio-6975, which held “failure to notify and seek permission from the

Secretary [HUD] had no affect on any right Parish may have had and so, was

unnecessary in light of HUD’s disclaimer.” Id. at ¶ 23. Consequently, regardless of

whether our now-rejected observation in Herman is followed, Parish is persuasive

authority that HUD approval to foreclose the Mears loan was unnecessary.

      {¶ 46} I agree with the trial court and would affirm its decision.




Copies sent to:

James W. Sandy
Gabrielle R. Neal
Michele Phipps
Hon. Steven K. Dankof
