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Foreclosure Law Supreme Court Slip Opinion

by Zigadto, Janet

 

SC20194 - Wells Fargo Bank, N.A. v. Lorson (Foreclosure; special defenses; whether Appellate Court properly held that noncompliance with regulations promulgated by the federal Department of Housing and Urban Development is a special defense that a defendant must plead and prove: "The issue that we must resolve in this appeal is whether compliance with federal Department of Housing and Urban Development (HUD) regulatory requirements applicable to mortgage loans guaranteed or insured by the Federal Housing Administration (FHA) is a condition precedent to acceleration of the debt, enforcement of the note, and foreclosure of the mortgage, such that the burden is on mortgagees to plead and prove compliance. . . We conclude that compliance with applicable HUD regulations is a condition precedent to enforcement of the note and foreclosure of the mortgage, and must be pleaded and ultimately proved by the mortgagee. Because the trial court did not require the plaintiff to establish compliance with HUD regulations at trial, we further conclude that the case must be remanded to the trial court for a trial on that issue. Accordingly, we reverse the judgment of the Appellate Court affirming the trial court's judgment of strict foreclosure.")