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Foreclosing FHA-Insured Mortgages in Ohio: Answers to Common Questions Posed in Contested Litigation
Dec. 11, 2019 — Maurice Wutscher attorney Kevin Hudspeth has written an article discussing the challenges lenders face when foreclosing FHA-insured mortgages in Ohio for the American Bar Association’s news magazine Business Law Today.
In “Foreclosing FHA-Insured Mortgages in Ohio: Answers to Common Questions Posed in Contested Litigation,“ Mr. Hudspeth writes, “Like most courts throughout the nation, Ohio courts treat HUD regulations as contractual terms incorporated into FHA-insured mortgage loan documents. As Ohio case law on this issue continues to evolve, confusion—and sometimes shock—can arise for out-of-state lenders unfamiliar with the state-specific intricacies of litigating contested foreclosures involving FHA-insured mortgage loans in Ohio.”
“FHA-insured mortgages incorporate HUD regulations as contract terms in the loan documents. Although the specific deadlines are aspirational, lenders must comply with the regulations before foreclosing. When litigating a contested foreclosure where the borrower alleges failure to comply with applicable HUD regulations, lenders should determine as early as possible whether they can demonstrate full compliance. If they cannot, then they should voluntarily dismiss their action without prejudice and take all reasonable steps to comply with the spirit and the letter of the regulations,” he writes.