Hernandez v. Home Sav. Ass'n of Dallas County, CA 3-74-818-C.
| Decision Date | 28 April 1976 |
| Docket Number | No. CA 3-74-818-C.,CA 3-74-818-C. |
| Citation | 411 F. Supp. 858 |
| Parties | Frank HERNANDEZ v. HOME SAVINGS ASSOCIATION OF DALLAS COUNTY v. James LYNN, Secretary of the Department of Housing & Urban Development. |
| Court | U.S. District Court — Northern District of Texas |
Ronald W. Kessler, Feather & Kessler, Dallas, Tex., for plaintiff.
Donald C. Templin, Haynes & Boone, Dallas, Tex., for defendant and third party plaintiff.
Michael P. Carnes, U. S. Atty., William F. Sanderson, Jr., Asst. U. S. Atty., Dallas, Tex., for third party defendant.
This case comes before the Court for decision on cross-motions for summary judgment filed by all parties to the suit. The controlling facts are uncontroverted, and the dispute can be resolved by the Court's construction of a certain provision of a Mortgagee's Certificate executed by Home Savings Association of Dallas County.
On November 19, 1970, Vista Hills Mobile Home Community executed and delivered a Deed of Trust Note to Home Savings in the amount of $821,100.00. This note was secured by a Deed of Trust and was to be issued by the Secretary of Housing and Urban Development pursuant to Section 207 of the National Housing Act and regulations thereunder. A Mortgagor's Certificate and a Mortgagee's Certificate were executed at the same time and were directed for compliance purposes to the Federal Housing Commissioner. Plaintiff is the assignee of the mortgagor Vista Hills Mobile Home Community, and stands in its shoes with respect to the rights and privileges articulated in the documents involved in this transaction.
Under separate provisions, the Mortgagee's Certificate requires that various charges be collected in cash. For example, Provision 5 required an FHA application and commitment fee, an initial service charge, costs for title and recording expense, and an FHA inspection fee. Provision 18, about which this dispute has arisen, stated that a firm commitment existed with the Federal National Mortgage Association to purchase the loan when fully disbursed and fully insured. Under the terms of this commitment $23,319.24, which represented the total dollar difference between the market interest rate and the FHA allowable interest rate at the time of the FHA commitment, was deposited by mortgagor with the mortgagee Home Savings. The language of Provision 18 regarding this sum reads as follows:
"Until final endorsement for insurance by the Commissioner, all funds collected pursuant to items (c), (d), or (e) above . . shall be held for the account of the mortgagor and shall be subject to your control and direction in the event of claim under the contract of insurance."
Final endorsement by the Commissioner was never made, since during the construction phase of the project, the mortgagor Vista Hills defaulted on its Deed of Trust Note and the mortgagee Home Savings foreclosed on the project.
On February 1, 1974, Plaintiff, as assignee of Vista Hills, made demand on Home Savings for payment of the funds in question, i. e., the $23,319.24 which was to be given to FNMA at the time of final closing of the project. Home Savings did not comply. At that time suit was pending in the 191st Judicial District Court, Dallas County, Texas, by Home Savings against Hernandez on an unrelated matter which has since been disposed of by the state court. On February 21, 1974, Hernandez filed a counterclaim upon Home Savings for the funds in question. After disposal of the other matter in that litigation on May 20, 1974, Home Savings filed a First Amended Answer and Counterclaim and Third Party Action for Interpleader on July 9, 1974, naming James Lynn, Secretary of the Department of Housing and Urban Development (HUD) as Third Party Defendant. Home Savings stated that since no "final endorsement" took place on that project, it is uncertain, because of the demands made by Plaintiff and by HUD, as to which party is entitled to this unused FNMA discount. At that time, Home Savings also tendered the funds in question to Bill Shaw, Clerk of the District Court of Dallas County, Texas.
Subsequently, HUD removed the suit to this Court. Upon order of the Court, the funds in question, now totalling approximately $27,971.65, were moved to the registry of this Court. Home Savings has at all times indicated its willingness to pay the funds according to the order of this Court, and has relinquished all claims on the funds in question.
The issue to be resolved by the Court is whether Plaintiff, as assignee of the mortgagor, or HUD is entitled to the funds deposited by the mortgagor to Home Savings to be held for the account...
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Hernandez v. Home Sav. Ass'n of Dallas County, s. 76-2794
...24 C.F.R. § 207.258(b)(4)(ii). The district court granted Hernandez motion for summary judgment. Hernandez v. Home Savings Association of Dallas County, 411 F.Supp. 858. The court concluded that under the Mortgagee's Certificate, the discount fee deposit was being "held for the account of t......
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Hernandez v. HOME SAV. ASS'N OF DALLAS COUNTY, CA 3-74-818-C.
...judgment pursuant to Rule 60(b) of the Federal Rules of Civil Procedure. The facts and history of this case are fully reported D. C., at 411 F.Supp. 858. Suffice it to note here that plaintiff Hernandez sued defendant Home Savings for the recovery of a permanent finance charge paid by Herna......