Opinion
CV146049727
06-29-2018
FEDERAL NATIONAL MORTGAGE v. James J. DOODY, III et al.
UNPUBLISHED OPINION
OPINION
James W. Abrams, Judge
The plaintiff lender filed this foreclosure action by Complaint dated September 3, 2014 against the defendant James J. Doody, III individually and in his capacity as Trustee of the Mary Y. Doody Memorial Trust based on an alleged default on a note. Trial of this matter was held on August 3, 2017, September 29, 2017 and October 27, 2017. The parties subsequently filed post-trial briefs.
Findings of Fact
1) In exchange for payment of $200,000.00, the defendant James J. Doody, III executed a promissory note and a mortgage deed with the original lender, Bank of America, N.A., dated May 1, 2013 on premises located at 60 Harding Avenue in Branford, Connecticut.
2) The mortgage was immediately assigned by Bank of America to Federal National Mortgage Association.
3) The plaintiff lender is currently the owner of the note and mortgage.
4) The property is currently owned by the defendant in his capacity as Trustee, as he recorded a transfer of the property from himself in his individual capacity to himself as Trustee by quitclaim deed not long after the execution of the note and mortgage.
5) From December 2013 through June 2014, the defendant did not make the $969.30 monthly payments on the mortgage due to a period of unemployment.
6) By Notice dated January 15, 2014, Bank of America, which continued to service the loan after the aforementioned assignment to Federal National Mortgage Association, sent the defendant a Notice of Intent to Accelerate. There is some issue regarding whether the defendant received this Notice.
7) In July 2014, the defendant went back to work and began making monthly payments again.
8) This action was filed in September 2014.
9) In January 2015, the defendant entered into a workout plan with Bank of America pursuant to which he paid an increased monthly amount of $1,542.77.
10) On June 9, 2015, Bank of America sent a letter to defendant acknowledging his June 5, 2015 payment of $1,542.77 and indicating that "[t]he full contractual monthly payment for your home loan is $969.30 ..."
11) On July 10, 2015, the defendant sent Bank of America a letter enclosing two signed copies of a loan modification agreement, the agreement containing a monthly payment amount of $1,555.24. The defendant altered to the amount in the loan modification agreement to read "$969.30," citing the amount stated in Bank of America’s June 9, 2015 letter.
12) At this point, the defendant lowered his monthly payments to $969.30, in apparent reliance on the amount contained in the letter. There is no evidence that the loan modification agreement was ever recorded on the land records.
13) Seterus took over the servicing of the loan from Bank of America in July 2015.
14) Seterus accepted the defendant’s monthly payments of $969.30 until January 8, 2016, when it began rejecting them, apparently based on its contention that they were partial payments. While there was testimony involving a possible telephone.
15) The defendant made payments each month from July 2014, two months prior to this action being filed, until Seterus began rejecting them in January 2016.
Discussion
"To make out its prima facie case, [the mortgagee has] to prove by a preponderance of the evidence that it was the owner of the note and mortgage and that [the mortgagor has] defaulted on the note." (Internal quotation marks omitted.) Ocwen Federal Bank, FSB v. Charles, 95 Conn.App. 315, 319, n.5, cert. denied, 279 Conn. 909, 902 A.2d 1069 (2006). This case suffers from a lack of documentation, presumably due to the transfer of the servicing of the loan from Bank of America to Seterus in July 2015. This deficit is particularly acute as it relates to the dealings between Bank of America and the defendant during 2015, when a workout plan was apparently agreed to and the defendant made the increased payments. To believe that the defendant and Bank of America had no agreement in place, one would have to accept the premise that the defendant arbitrarily and unilaterally began making payments of $1,542.77, only to return to the $969.30 figure over half a year later. While it can be argued that the defendant adopted an extremely liberal interpretation of Bank of America’s June 9, 2015 letter in reducing his monthly payment, the plaintiff had, at a minimum, an obligation to inform the defendant in writing that it considered the reduced payments inadequate. Instead, it accepted the reduced payments for five months before rejecting them. The defendant was owed more.
The plaintiff brought this action and assumes the burden to prove that a default existed by a preponderance of the evidence. The evidence supports the conclusion that this matter went to trial due to a lack of communication between Bank of America and Seterus at the time the servicing of the loan was transferred and Seterus’s failure to communicate with the defendant. This conclusion is buttressed by the fact that Seterus accepted the payments it later deemed inadequate for a period of months prior to refusing them.
The plaintiff has failed to demonstrate the defendant’s default by a preponderance of the evidence. Judgment shall enter in favor of the defendant.