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Bullock v. National City Mortgage Co.

August 19, 1999

MICHAEL BULLOCK, APPELLANT,
v.
NATIONAL CITY MORTGAGE COMPANY, APPELLEE.



Before Steadman and Ruiz, Associate Judges, and Gallagher, Senior Judge.

The opinion of the court was delivered by: Ruiz, Associate Judge

Appeal from the Superior Court of the District of Columbia (Hon. Evelyn E.C. Queen, Trial Judge)

Argued October 28, 199

Appellant, Michael Bullock, brought a negligence action against appellee, National City Mortgage (NCM), claiming that it failed to timely submit certain information to the Department of Housing and Urban Development (HUD) necessary to obtain FHA insurance, that the absence of such insurance made Bullock ineligible for the HUD mortgage assistance program, *fn1 and that this failure resulted in the foreclosure of his home when he was unable to meet his mortgage payments. The trial court awarded summary judgment in favor of NCM on the ground that the only commitment Bullock had received from HUD was in 1991, prior to the purchase of his home. Bullock contends, and we agree, that the trial court improperly granted summary judgment because there are genuine issues of material fact as to whether he would have qualified for the HUD program and received a favorable repayment plan that would have avoided foreclosure but for NCM's negligence. Therefore, we reverse the trial court's grant of summary judgment and remand for further proceedings consistent with this opinion.

I.

On March 22, 1991, Bullock purchased a home located at 1209 Orren Street, N.E. in Washington, D.C. Appellant obtained a Home Purchase Assistance Program loan from the D.C. Local Development Corporation in the amount of $18,548.15, *fn2 and NCM was the mortgagee for the rest of the purchase price ($67,950) of the property. Pursuant to the mortgage agreement, Bullock was required to make monthly payments of $516.47. In the month prior to closing, NCM and Bullock signed a HUD/FHA application for mortgage insurance. *fn3 In addition, a Certificate of Commitment (for HUD-insured mortgage), listing NCM as the lender, was completed, *fn4 as well as a settlement statement (HUD Form-1) signed by Bullock, as purchaser, the selling homeowner, and a NCM representative. *fn5 These three items must be submitted to HUD by the mortgagee in order to obtain a mortgage insurance certificate. *fn6

Bullock began to default on his monthly mortgage payments in March 1992, one year after purchasing his home. On June 2, 1992, Inter-City Mortgage (ICM), who had bought the mortgage from NCM, notified Bullock that if he did not pay $2,305.80 in back payments and late charges, he risked foreclosure. This same notice also informed Bullock that if he had missed his mortgage payments through no fault of his own, he might be eligible for the HUD mortgage assistance program. After reviewing Bullock's case, ICM filed a request for HUD mortgage assistance on Bullock's behalf. *fn7 On September 30, 1993, HUD informed ICM that it would not accept assignment of appellant's mortgage because the property was not FHA-insured. Subsequently, ICM sold Bullock's mortgage back to NCM because NCM was unable to provide it with a mortgage insurance certificate.

On May 20, 1994, NCM submitted the required information to HUD to initiate a mortgage insurance review. On May 25, 1994, HUD declined to endorse Bullock's mortgage note because NCM did not submit a statement showing that Bullock's payments were current. NCM could not submit this statement, however, because Bullock was in default on his mortgage payments. On June 8, 1994, NCM informed Bullock that HUD would not insure his loan because he had been in continuous default since January 1992. NCM also initiated default negotiations with Bullock. On December 21, 1994, NCM outlined its understanding of the terms of the payment plan:

1. Monthly payments of $225.46 on the past-due amounts for the next 36 months beginning January 1, 1995.

2. $2,750 repayment assistance from D.C. Human Services, Emergency Services to be posted to the past-due account.

3. NCM discontinues its offer to obtain a mortgage insurance premium (MIP) refund from HUD on Bullock's behalf, but will apply for HUD/FHA mortgage insurance upon the successful completion of the repayment terms on the condition that Bullock provide six months of timely payments after the completion of the delinquency repayment. *fn8

4. Additional monthly payments in the amount of $542.89.

On January 31, 1995, NCM informed Bullock that it had not received the January payment, and that if it did not receive the January and February payments by February 3, 1995, it would initiate foreclosure. On February 7, 1995, NCM informed Bullock that he had defaulted under the note and the mortgage by not paying the monthly installment payments since March 3, 1992, and by not complying with the December 21, 1994 repayment ...


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