Perry v. Federal National Mortgage Ass'n
100 So. 3d 1090
Ala. Civ. App.2012Background
- Perry defaulted on a mortgage secured by EverHome/MERS after a work-related injury reduced his income.
- EverHome accelerated the loan and foreclosed; EverHome conveyed its interest to Fannie Mae via special warranty deed on July 2–15, 2009, and Foreclosure sale occurred August 4, 2009.
- Fannie Mae sued Perry to eject him, attaching EverHome’s foreclosure deed and its own deed; Perry answered challenging validity of notice and sale.
- EverHome had previously engaged in loss-mitigation discussions with Perry, suspending payments for a period, but ultimately pursued foreclosure.
- Discovery showed EverHome had acquired the note prior to foreclosing and that EverHome was holder entitled to exercise the power of sale; after-acquired-title doctrine applied to Fannie Mae.
- Perry challenged multiple facets—assignment timing, notice defects, loss-mitigation absence, and sale price—but trial court granted summary judgment for Fannie Mae.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether EverHome could foreclose as holder of the note | Perry contends EverHome lacked rights because not the mortgage assignee when foreclosing. | Fannie Mae argues EverHome was holder of the note and thus authorized to exercise the power of sale; after-acquired-title doctrine perfects title in Fannie Mae. | EverHome holder authorized; after-acquired-title doctrine applies; foreclose valid. |
| Whether note and mortgage separation voids lien | Note and mortgage separation renders lien unenforceable. | No, equitable transfer of debt transfers the mortgage; separation does not defeat foreclosure. | No enforceability defect from separation; lien valid through transfer of debt. |
| Whether notice and statutory requirements were satisfied | Notice to Perry about assignment, default and acceleration, and sale were defective under mortgage and § 35-10-13. | Not prejudicial errors; notices substantially complied; Perry had actual knowledge and continued communications. | Nonprejudicial notice errors do not void valid foreclosure; notices satisfied or not prejudicial. |
| Whether loss-mitigation evidence could defeat ejectment | HUD regs/act required loss-mitigation; failure to comply could render foreclosure premature. | Coleman controls; failure to comply with loss-mitigation cannot defeat ejectment when foreclosure nonjudicial. | Loss-mitigation compliance is not a defense to ejectment following nonjudicial foreclosure. |
Key Cases Cited
- Harton v. Little, 176 Ala. 267, 57 So. 851 (1911) (power of sale may be exercised by debt owner without mortgage assignment)
- Jett v. Lawyers Title Insurance Corp., 985 So.2d 434 (Ala.Civ.App.2007) (after-acquired title passes to vendee; rigid title rule)
- Mt. Carmel Estates, Inc. v. Regions Bank, 853 So.2d 160 (Ala.2002) (low bid at foreclosure must shock conscience to set aside sale)
- Presley v. B.I.C. Constr., Inc., 64 So.3d 610 (Ala.Civ.App.2009) (evidentiary value of tax assessor data; market value not controlling)
- Redman v. Federal Home Mortgage Corp., 765 So.2d 630 (Ala.1999) (evidence admissibility; burden on proving notice was not established)