Harris v. U.S. Bank Nat'l Ass'n

Decision Date10 March 2017
Docket NumberCASE NO. 1D15–2022
Citation223 So.3d 1030
Parties Sarah J. HARRIS and Bradley C. Harris, Appellants, v. U.S. BANK NATIONAL ASSOCIATION, as Trustee for the Certificate Holders of the LXS 2007–16N Trust Fund, Appellee.
CourtFlorida District Court of Appeals

Mark P. Stopa of Stopa Law Firm, Tampa, for Appellants.

Shaib Y. Rios of Brock & Scott, PLLC, Fort Lauderdale, for Appellee.

PER CURIAM.

In granting final judgment on U.S. Bank National's foreclosure complaint against Sarah and Bradley Harris (whom we'll call "the Borrowers"), the trial court held that a HUD regulation was a condition precedent to foreclosure, but that the Borrowers failed to raise the issue and timely challenge the Bank's noncompliance with the regulation. We affirm.

I.

The Bank sought to foreclose a mortgage secured by a promissory note issued to the Borrowers. As an FHA loan, the note contained the following provision:

If Borrower defaults by failing to pay in full any monthly payment, then Lender may, except as limited by regulations of the Secretary in case of payment defaults , require immediate payment in full of the principal balance remaining due and all accrued interest. ... In many circumstances regulations issued by the Secretary will limit Lender's rights to require immediate payment in full in the case of payment defaults. This note does not authorize acceleration when not permitted by HUD regulations .

(Emphasis added). The mortgage established the Bank's remedies upon default by the Borrowers, including limitations subject to HUD regulations:

Grounds for Acceleration of Debt.
(a) Default. Lender may, except as limited by regulations issued by the Secretary, in the case of payment defaults, require immediate payment in full of all sums secured by this Security Instrument if:
...
(d) Regulations of HUD Secretary. In many circumstances regulations issued by the Secretary will limit Lender's rights, in the case of payment defaults, to require immediate payment in full and foreclose if not paid. This Security Instrument does not authorize acceleration or foreclosure if not permitted by regulations of the Secretary.

(Emphasis added). The regulation at issue in this case provides for a face-to-face interview with a mortgagor under certain scenarios:

(b) The mortgagee must have a face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full monthly installments due on the mortgage are unpaid. ...
(c) A face-to-face meeting is not required if:
(1) The mortgagor does not reside in the mortgaged property,
(2)The mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either ,
(3) The mortgagor has clearly indicated that he will not cooperate in the interview,
(4) A repayment plan consistent with the mortgagor's circumstances is entered into to bring the mortgagor's account current thus making a meeting unnecessary, and payments thereunder are current, or
(5) A reasonable effort to arrange a meeting is unsuccessful.
(d) 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, unless the mortgaged property is more than 200 miles from the mortgagee, its servicer, or a branch office of either, or it is known that the mortgagor is not residing in the mortgaged property.

24 C.F.R. § 203.604 (emphasis added).

The Bank's complaint did not allege compliance with this HUD regulation or any others, but the Borrowers neither moved to dismiss for the Bank's non-compliance nor asserted non-compliance as an affirmative defense. For its part, the Bank took the position that—even if the Borrowers' other affirmative defenses could be construed to include non-compliance with HUD regulations—such regulations are not conditions precedent to a foreclosure action.

The trial lasted less than two hours, the only witness being the Bank's litigation analyst, Mr. Huff. On cross-examination, he testified he was without knowledge as to whether a Bank representative went to the property to speak to the Borrowers regarding the default. On re-direct, however, he said no attempt was made to have a face-to-face meeting with the Borrowers because that HUD requirement applied only when a Bank servicing branch is within 200 miles of the property, which is not the case here. He expressed his confidence "that we have followed all servicing guidelines and procedures pursuant to this foreclosure action." This was the extent of testimony about compliance with HUD regulations.

During closing arguments, the Borrowers raised for the first time the Bank's argument that HUD regulations did not apply, arguing that non-compliance with HUD regulations is a defense. The Bank countered that the "face-to-face meeting" did not apply because no branch existed within 200 miles of the property. The trial court ruled in favor of the Bank...

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4 cases
  • Derouin v. Universal Am. Mortg. Co.
    • United States
    • Florida District Court of Appeals
    • 22 Agosto 2018
    ...complaint." (citing McIntosh v. Wells Fargo Bank, N.A., 226 So.3d 377, 379 (Fla. 5th DCA 2017) ) ); Harris v. U.S. Bank Nat'l Ass'n, 223 So.3d 1030, 1032 (Fla. 1st DCA 2017) (holding that compliance with face-to-face meeting requirement was a condition precedent to initiating foreclosure ac......
  • Lakeview Loan Servicing, LLC v. Walcott-Barr
    • United States
    • Florida District Court of Appeals
    • 14 Octubre 2020
    ...incorporation renders compliance with the regulation a condition precedent to foreclosure. See, e.g. , Harris v. U.S. Bank Nat'l Ass'n , 223 So. 3d 1030, 1032 (Fla. 1st DCA 2017) ; Palma v. JPMorgan Chase Bank , 208 So. 3d 771, 774–75 (Fla. 5th DCA 2016) ; Diaz v. Wells Fargo Bank, N.A. , 1......
  • Chrzuszcz v. Wells Fargo Bank, N.A.
    • United States
    • Florida District Court of Appeals
    • 28 Junio 2018
    ...the party asserting the existence of the conditions precedent to establish their applicability."In Harris v. United States Bank National Association , 223 So.3d 1030, 1032 (Fla. 1st DCA 2017), this Court recognized "[t]his case turns on whether a HUD regulation, the face-to-face counseling ......
  • Russell v. Wells Fargo Bank, N.A.
    • United States
    • Florida District Court of Appeals
    • 22 Junio 2020
    ...in the answer but with the defendant if raised instead as an affirmative defense in the answer); see also Harris v. U.S. Bank Nat'l Ass'n , 223 So. 3d 1030, 1031–32 (Fla. 1st DCA 2017) (explaining that a defending party's assertion that a plaintiff has failed to satisfy conditions precedent......
5 books & journal articles
  • Chapter 2-2 Notice of Default and Opportunity to Cure
    • United States
    • Full Court Press Florida Foreclosure Law 2022 Chapter 2 Default and Acceleration
    • Invalid date
    ...conflict by contrasting Palma v. JPMorgan Chase Bank, NA, 208 So. 3d 771, 774 (Fla. 5th DCA 2016) with Harris v. U.S. Bank Nat'l Ass'n, 223 So. 3d 1030, 1032 (Fla. 1st DCA 2017). However, that comparison discounted the First District's 2018 Chrzuszcz v. Wells Fargo Bank, N.A. opinion, in wh......
  • Contract cases
    • United States
    • James Publishing Practical Law Books Florida Causes of Action
    • 1 Abril 2022
    ...pleading and persuasion. See Diaz v. Wells Fargo Bank, N.A. , 189 So. 3d 279, 284 (Fla. 5th DCA 2016); Harris v. U.S. Bank Nat’l Ass’n, 223 So.3d 1030, 1033 (Fla. 1st DCA 2017). 20. Unconscionability: Unconscionability is an affirmative defense which must be raised by proper pleading. Barak......
  • Chapter 2-2 Notice of Default and Opportunity to Cure
    • United States
    • Full Court Press Florida Foreclosure Law 2020 Title Chapter 2 Default and Acceleration
    • Invalid date
    ...conflict by contrasting Palma v. JPMorgan Chase Bank, NA, 208 So. 3d 771, 774 (Fla. 5th DCA 2016) with Harris v. U.S. Bank Nat'l Ass'n, 223 So. 3d 1030, 1032 (Fla. 1st DCA 2017). However, that comparison discounted the First District's 2018 Chrzuszcz v. Wells Fargo Bank, N.A. opinion, in wh......
  • Chapter 7-2 Motions to Dismiss
    • United States
    • Full Court Press Florida Foreclosure Law 2020 Title Chapter 7 Responses to Foreclosure Complaints
    • Invalid date
    ...631 So. 2d 319, 320-21 (Fla. 4th DCA 1994); Ashley v. Lamar, 468 So. 2d 433, 434 (Fla. 5th DCA 1985).[18] Harris v. U.S. Bank, N.A., 223 So. 3d 1030, 1032-33 (Fla. 1st DCA 2017).[19] Trucap Grantor Trust 2010-1 v. Pelt, 84 So. 3d 369, 372 (Fla. 2d DCA 2012). Florida Rule of Civil Procedure ......
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