Georgia’s Supreme Court yesterday held that a record mortgagee is a proper party to conduct a non-judicial foreclosure even if some other party holds the note. In You v. JP Morgan Chase Bank, N.A., Chase foreclosed on the mortgage it serviced, then conveyed the property to Fannie Mae, its investor. The borrower sued in federal court, which in turn certified questions to the Georgia Supreme Court.
First, the court held a record mortgagee by virtue of an assignment of the mortgage had the requisite authority to exercise the power of sale granted in the mortgage even if some other party was holding the note.
Second, the court analyzed whether investors need to be disclosed in the pre-foreclosure notices. The borrower argued the pre-foreclosure notices were deficient because they did not identify Fannie Mae. Georgia Statute 44-14-162.2(a) states the notice must include “the name, address, and telephone number of the individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage.” Legal blogs are reporting the court held investors can be omitted, but that’s too simple a read. The court offered almost no interpretation of the statute: “If that individual or entity is someone other than the deed holder or the note holder, such as an attorney or servicing agent, then that person or entity must be identified. The statute requires no more and no less.” The court did not attempt to define whether investors who restrict certain forms of modifications need to be listed. Federal courts in Georgia (where most foreclosure challenges are decided) will still have to deal with this issue going forward.
The “show me the note” argument, though, has been put to bed, at least in Georgia, with this decision.