Federal National Mortgage Association v. Hafer

The Federal National Mortgage Association (“FNMA”) purchased Russell Hafer’s home at a non-judicial foreclosure sale. FNMA filed an eviction suit when Russell and his wife, Sandra, refused to vacate. The Hafers claimed that the foreclosure sale was invalid because their loan servicer, American Home Mortgage Services, Inc.(now known as Homeward Residential, Inc.), agreed to modify the terms of Russell’s loan just prior to instituting foreclosure proceedings. They claimed that Russell was therefore not in default at the time of the sale. The Hafers filed a third-party complaint against Homeward, stating eleven causes of action and asking the district court to quiet title in Russell. FNMA and Homeward filed a joint motion for summary judgment, arguing that there was no agreement to modify the loan terms because Russell did not sign and return a permanent loan modification agreement to Homeward by the specified deadline. The district court granted the motion in favor of FNMA and partially granted the motion in favor of Homeward, holding that there was no agreement between Homeward and Russell modifying Russell’s loan because no Homeward representative signed an agreement. The Hafers appealed, arguing: (1) the district court erred in considering the question whether an agreement had to be signed by a Homeward representative when that issue was not raised in the joint motion for summary judgment; and (2) that the district court erred substantively in concluding that there was no agreement to modify Russell’s loan absent a signature from a Homeward representative. Upon review, the Supreme Court concluded that the district court erred in dismissing the Hafers' first, third, and fourth causes of action against Homeward, as well as granting FNMA's claim for possession. The case was remanded for further proceedings. View "Federal National Mortgage Association v. Hafer" on Justia Law