Courtesy of helpful reminder to lenders – if you’re going to foreclose, read the note and mortgage and do what they say. In a recent Ohio Court of Appeals case, the bank failed to follow these instructions and was rewarded by having its foreclosure complaint dismissed. 

The borrower missed a payment on her mortgage and the bank sent a default notice via certified mail. When the past due amount was left unpaid, the bank foreclosed. Seems like a run-of-the-mill foreclosure case, right? Not quite, because the subject Note contained the following language: “Any notice that must be given to me under this Note will be given by delivering it or by mailing it by first class mail to me at the Property Address.” The borrower denied that she received the notice and, in fact, the certified mail envelope was returned to the bank as “unclaimed.”


Based on the express language of the Note (the Mortgage contained similar language), the Court rejected the bank’s arguments that it satisfied the notice requirements. The Note gave two options – delivery or mailing first class. There was no evidence the notice was actually delivered, and any presumption of delivery never arose because there was evidence, i.e. the returned envelope, that the notice was not delivered. The bank never mailed the notice by first class mail. The fundamental step of choosing the best mail service method could have saved the complaint. 


This example continues a trend toward more rigorous review of lenders’ methods in foreclosure cases. From requiring proof of note ownership, to mandating alternative dispute resolution and dismissing cases under a res judicata analysis, courts have become a more borrower-friendly environment as the foreclosure crisis has progressed. As judges cast an increasingly skeptical eye upon each foreclosure action that appears on the docket, it is critical that lenders pay attention to the smallest, seemingly insignificant details of the process.