Wells Fargo Bank, N.A. v. Lorson

Summary

The court held that compliance with applicable HUD servicing regulations is a contractual condition precedent to accelerating an FHA-insured mortgage debt and commencing foreclosure. It adopted a burden-shifting procedure under which the lender must generally plead compliance, the borrower must identify specific alleged noncompliance if disputed, and the lender must then prove compliance with those requirements. Because the trial court did not apply that procedure, the judgment was reversed and the case was remanded for a new trial limited to HUD compliance.