Federal Home Loan Mortgage Corp. v. Taylor

George Taylor (defendant) held a mortgage from Federal Home Loan Mortgage Corporation (FHLMC) (plaintiff) with a late-charge provision and an acceleration clause that made the entire debt due if a payment stayed unpaid past the following month's due date. Taylor, an Air Force servicemember stationed in the Philippines where mail took 7 to 18 days each way, made timely payments for three years before falling behind around the time he had to fly his daughter to Texas for medical treatment. FHLMC had accepted a prior late cure, but the next time Taylor tried to cure a default he omitted the correct late-charge amount; by the time FHLMC's mailed rejection reached him in the Philippines, the following month's payment was already due, and FHLMC accelerated and began foreclosure. The trial court denied foreclosure, and FHLMC appealed.