COA: Summary judgment wrong in foreclosure suit

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A mortgagee’s compliance with federal mortgage servicing responsibilities is a condition precedent that can be raised as an affirmative defense to the foreclosure of a Federal Housing Administration insured loan, the Indiana Court of Appeals ruled today for the first time.

Florence R. Lacy-McKinney bought a home in South Bend with an FHA-insured mortgage. She later refinanced her loan with Taylor Bean & Whitaker Mortgage Corp., which was still an FHA-insured loan subject to federal statutes and regulations of the U.S. Department of Housing and Urban Development.

Lacy-McKinney eventually fell three months behind on her payments and the mortgagee filed to foreclose on her home. Lacy-McKinney raised several affirmative defenses in her response, including that Taylor-Bean refused partial mortgage payments and did not have a face-to-face meeting with her before filing for foreclosure, both of which violate HUD regulations for FHA- and HUD-insured mortgages.

The parties were unable to reach a settlement, and the trial court granted Taylor-Bean’s motion for summary judgment.

Addressing the issue for the first time in Florence R. Lacy-McKinney v. Taylor Bean and Whitaker Mortgage Corp., No. 71A03-0912-CV-587, the Court of Appeals needed to determine of what legal significance are the HUD regulations as to the right of a mortgagee to foreclose on a HUD-insured mortgage. After delving into the background of HUD-insured mortgages and relying on rulings from other states, including Bankers Life Co. v. Denton, 458 N.E.2d 203 (Ill. App. Ct. 1983), the appellate court concluded that HUD servicing responsibilities may be raised as an affirmative defense in foreclosure actions even though the regulations don’t create a private right of action.

“To hold that compliance with these regulations is not an affirmative defense, as Taylor-Bean suggests, would circumvent the public policy of HUD,” wrote Judge James Kirsch.

Lacy-McKinney admitted she entered into the note and mortgage and had fallen behind on her payments but claimed there were issues that precluded summary judgment. The judges agreed that there were genuine issues of material fact as to whether Taylor-Bean complied with the requirement for a face-to-face meeting or made an effort to arrange a meeting before she was three months behind on her payments. They reversed summary judgment and remanded for further proceedings because the trial court erred in granting summary judgment without first determining that Taylor-Bean had complied with Subpart C of HUD servicing responsibilities, the conditions precedent to foreclosure.


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  1. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  2. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  3. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  4. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.

  5. (A)ll (C)riminals (L)ove (U)s is up to their old, "If it's honorable and pro-American, we're against it," nonsense. I'm not a big Pence fan but at least he's showing his patriotism which is something the left won't do.