## Facts

- In 2003, Andrew Ramsey purchased rental property and executed a promissory note and mortgage in favor of Coldwell Banker Mortgage (later held by PHH Mortgage Corporation).  
- Ramsey later deeded the property to Precision Real Estate Group, LLC, while the loan obligation and mortgage enforcement issues remained in dispute between PHH and the defendants.  
- For approximately six years, Ramsey made his monthly mortgage payments electronically using PHH’s website “pay now” feature, commonly referred to as “Speedpay.” PHH permitted and encouraged mortgagors to use this online payment channel.  
- Ramsey occasionally received website error messages when attempting to pay online; when that occurred, he would try again later, and the payment would go through. PHH did not reject his payments based on this method during that period.  
- In August 2009, Ramsey attempted to make the monthly payment through Speedpay and received repeated error messages. After multiple attempts, the payment still was not processed.  
- Ramsey called PHH’s help line, reported the problem, and was told the payment would be processed. Despite those assurances, PHH did not process the payment.  
- Ramsey also mailed PHH a check for the late August payment with a letter explaining the online payment problems; PHH neither cashed the check nor returned it.  
- In September 2009, Ramsey attempted again to make payment (including attempts online and in person at a PHH office), but the September payment also went unprocessed.  
- PHH treated the loan as in default and filed a foreclosure complaint in the Franklin County Court of Common Pleas.  
- After trial proceedings before a magistrate, the trial court entered judgment for Ramsey and Precision, finding no default and concluding PHH had waived any claim that payment could not be made electronically given the parties’ long practice. PHH appealed.

## Issues

1. Whether PHH proved an uncured default when Ramsey repeatedly attempted to make the August and September 2009 payments through PHH’s online payment system that PHH had long accepted, but the payments were not processed or credited.  
2. Whether PHH’s six-year course of accepting (and encouraging) online payments constituted a waiver that prevented PHH from insisting on a different payment method as a basis for declaring default and foreclosing.

## Decision

- The Tenth District Court of Appeals affirmed the trial court’s judgment in favor of Ramsey and Precision.  
- The appellate court agreed with the trial court’s findings that Ramsey was not in default under the circumstances shown at trial.  
- The court accepted that Ramsey made good-faith efforts to tender payment through PHH’s established online channel and followed up with PHH when the system failed, including mailing a check that PHH did not cash or return.  
- The court upheld the conclusion that PHH’s long practice of accepting online payments meant PHH could not successfully claim that electronic payment was not an acceptable method and then base foreclosure on the resulting non-crediting of those attempted payments.  
- The court deferred to the trial court’s factual determinations supported by the record and sustained the judgment denying foreclosure.

## Legal Principles

- A lender’s course of conduct in consistently accepting a particular method of payment over time can operate as a waiver of the lender’s ability to later reject that method as unauthorized, especially where the borrower reasonably relies on the established practice.  
- In a foreclosure action grounded on alleged nonpayment, the lender must prove default; evidence that the borrower timely attempted to tender payment through the lender’s accepted payment channel can defeat a claim of default when the failure to process or credit payment is attributable to the lender’s payment arrangements.  
- When a lender provides and encourages a payment mechanism and has long accepted payments through it, the lender may be bound by that practice in determining whether the borrower properly tendered payment.  
- On appeal from a judgment following a bench trial (including proceedings involving a magistrate adopted by the trial court), the reviewing court generally will not reweigh credibility determinations and will affirm factual findings supported by competent evidence.

## Conclusion

PHH Mortgage Corp. v. Ramsey held that PHH was not entitled to foreclose where the borrower had long paid through PHH’s online system, made repeated good-faith attempts to tender the August and September 2009 payments through that system, and even mailed a check that PHH neither negotiated nor returned; PHH’s extended acceptance of online payments supported waiver, and the appellate court affirmed the judgment for the borrower and transferee owner.


PHH Mortgage Corp. v. Ramsey, 17 N.E.3d 629 (2014)