The Georgia Supreme Court rendered a long-anticipated decision on May 20 related to foreclosure procedure in Georgia.  The case arose as a result of a recent split of authority in Georgia as to whether a party seeking to exercise the power of sale provision in a security deed must also hold or have a beneficial interest in the underlying promissory note underlying the security deed.  Borrowers had been making an argument commonly referred to as “produce the Note”, in which they argued that unless a holder of a security deed also held the underlying promissory note, they could not lawfully exercise the right to non-judicially foreclose on the property subject to the security deed. Continue reading →

In yet another case decided by the Alabama Court of Civil Appeals on August 24, 2012, the Court  rejected the common argument often made by borrowers that a foreclosing lender must produce the original promissory note.  In the case of Douglas v. Troy Bank & Trust Company, an ejectment action arose following a non-judicial foreclosure by the Bank.  The borrowers asserted that the Court did not have subject-matter jurisdiction because the Bank was not a “holder in due course” of the Note or the mortgage nor had the Bank produced the original “wet-ink signature” promissory note and mortgage.  The trial court entered judgment in favor of the Bank and the borrowers appealed to the Alabama Court of Civil Appeals.  In upholding the judgment of the trial court, the Court of Appeals details the findings of courts in other jurisdictions as to this issue in finding that these “show me the note” arguments lack merit under Alabama law.

The Superior Court of Gwinnett County, Georgia has recently ruled on another wrongful foreclosure case dealing with the assignment of a security deed by Mortgage Electronic Registration Systems (MERS) to the foreclosing secured party.  The Court held that Georgia law is clear that as the nominee of the originating lender, MERS had the ability and legal authority to transfer and assign the security deed.  The Court further held that the borrower lacked standing to challenge the assignment from MERS because he was not a party to the contract.  The case is Wendel C. White v. Citibank, N.A., et al., Superior Court of Gwinnett County, 11-A-10818-8.