DEBORAH LAWS, APPELLANT,
v.
WELLS FARGO BANK, N.A., APPELLEE
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Deborah Laws appealed a foreclosure judgment entered against her on summary judgment by Wells Fargo Bank. The court reversed because Wells Fargo failed to provide the written notice of intent to accelerate required by HUD regulations expressly incorporated in the FHA note, creating a valid affirmative defense that precluded summary judgment.
Summary judgment was improper because Laws had a valid affirmative defense based on noncompliance with HUD regulations expressly incorporated in the note. When a note expressly incorporates HUD regulations requiring notice of acceleration, failure to provide such notice is a valid equitable defense to foreclosure, and the case must proceed to trial.
[1] A promissory note may expressly incorporate HUD regulations, making compliance with those regulations a condition precedent to acceleration and foreclosure.
[2] Failure to provide a written notice of intent to accelerate, as required by an expressly incorporated HUD regulation, constitutes a valid defense to foreclosure.
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Join FLexlaw to unlock all legal intelligence“This note does not authorize acceleration when not permitted by HUD regulations.”
The express language of the FHA note incorporating HUD regulations as a limitation on acceleration authority
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Join FLexlaw to unlock all legal intelligenceLaws had an FHA note and mortgage with Wells Fargo containing language in Paragraph 6(B) stating the note does not authorize acceleration when not per…
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Deborah Laws appeals a final judgment of foreclosure entered in favor of Wells Fargo Bank, N.A., on Wells Fargo’s motion for summary judgment below. She makes various arguments for reversal, but the only one that has merit is her affirmative defense of failure to give the required notice of intent to accelerate.
Laws points to Paragraph 6(B) of her note, which provides, “This note does not authorize acceleration when not permitted by HUD regulations.” Wells Fargo does not dispute that the contracts at issue were a standard FHA note and mortgage, to which HUD and FHA statutes, guidelines, rules and regulations apply, but counters with an argument that HUD regulations are not generally considered to be conditions precedent to foreclosure.
However, the issue in this case is not whether Wells Fargo met all of the conditions necessary to initiate a foreclosure action, but whether it was proper to enter a summary judgment in the face of Laws’s affirmative defense. Because the note contains language specifically and expressly incorporating HUD regulations that require a written notice of acceleration, Laws was entitled to raise failure to comply'with these regulations as a valid defense to foreclosure. See Real Estate Mortg. Network, Inc. v. Knight, 149 So.3d 121 (Fla. 4th DCA 2014) (holding that a valid defense of noncompliance with HUD regulations that require a notice of acceleration existed, where the subject mortgage expressly provided that it “does not authorize acceleration or foreclosure if not permitted by regulations of the [HUD] Secretary.”) (citing Cross v. Federal National Mortgage Ass’n, 859 So.2d 464, 465 (Fla. 4th DCA 1978) (holding that noncompliance with HUD regulations may be asserted as an equitable defense in mortgage foreclosure proceedings)).
Wells Fargo has not denied that it failed to send Laws a written notice of default and intent to accelerate. Nor was any such notice entered into evidence below. Therefore, we reverse the summary judgment entered below in favor of Wells Fargo and remand for the case to proceed to trial.
Reversed and remanded.
PADOVANO, MARSTILLER, and OSTERHAUS, JJ., Concur.
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Citator
Cited By
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Richard Derouin & KIM Derouin v. Universal Am. Mortg. Co., LLC, 254 So. 3d 595 (Fla. 2d DCA 2018)
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Harris v. U.S. Bank Nat'l Ass'n for the Certificate Holders of the LXS 2007-16N Tr. Fund, 223 So. 3d 1030 (Fla. 1st DCA 2017)…explaining that when the bank alleges compliance with conditions precedent, “the burden fell to the [borrowers] to first frame that issue [of noncompliance], specifically and with particularity, in their answer”); see Laws v. Wells Fargo Bank, N.A., 159 So. 3d 918, 919 (Fla. 1st DCA 2015) (“Because the note contains language specifically and expressly incorporating HUD regulations that require a written notice of acceleration, Laws was entitled to raise failure to comply with these regulations as a valid defe…
Authorities Cited
- Real Est. Mortg. Network, Inc. v. Knight, 149 So. 3d 121 (Fla. 4th DCA 2014)