Georgia District Court Offers New Authority On Issue Of "Full Authority" Under O.C.G.A. § 44-14-162.2


In the latest chapter of the Georgia courts' attempts to interpret Georgia's foreclosure notice statute, O.C.G.A § 44-14-162.2, the U.S. District Court for the Northern District of Georgia issued an opinion on February 25, 2014 granting the plaintiffs' motion for leave to file an amended complaint to assert that the foreclosure notice that they received was deficient because it did not include "the name, address and telephone number of the individual or entity who shall have the full authority to negotiate, amend, and modify all terms of the mortgage." Chae Yi You and Chur K. Bak v. JP Morgan Chase Bank, N.A. and Federal National Mortgage Association, No. 1:12-CV-202-JEC-AJB, slip op. (N.D. Ga. February 25, 2014). Specifically, the Court found that the plaintiffs' amended complaint stated a plausible claim for relief for wrongful foreclosure by alleging that the foreclosure notice was invalid because, although the foreclosure notice identified the servicer of plaintiffs' loan, it failed to identify Federal National Mortgage Association ("Fannie Mae"), who plaintiffs alleged was the entity with the "full authority to negotiate, amend, and modify" the plaintiffs' loan by virtue of its servicing guidelines. You at 6.

In You, the plaintiffs asserted a claim for wrongful foreclosure in their original complaint, alleging that the foreclosure notice was deficient because it failed to identify the "secured creditor" of the loan. You at 2. The defendants, Fannie Mae and JP Morgan Chase Bank, N.A. ("Chase"), moved to dismiss the complaint. In ruling on the motion, the District Court certified several questions to the Georgia Supreme Court, including the question of whether O.C.G.A § 44-14-162.2 requires that the secured creditor be identified in the foreclosure notice. You at 2. The Georgia Supreme Court answered this question in the negative, concluding that O.C.G.A § 44-14-162.2 requires only that the foreclosure notice identify the individual or entity with the "full authority to negotiate, amend and modify" the loan and does not require that the "secured creditor" be identified in the foreclosure notice. See You v. JP Morgan Chase, 293 Ga. 67, 743 S.E.2d 428 (May 20, 2013). However, the Supreme Court did not address the question of whether the servicer of a loan can have "full authority to negotiate, amend, and modify" the loan when it is bound by servicing guidelines.

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