Reese v. Provident Funding Associates, LLP
327 Ga. App. 266
Ga. Ct. App.2014Background
- Izell and Raven Reese obtained a $650,000 loan secured by a deed (Security Deed); Provident funded the loan and later sold the Note to Residential Funding Company, LLC while remaining the loan servicer.
- Provident, as servicer, retained the right to collect payments and perform mortgage servicing functions.
- The Reeses defaulted in January 2009; Provident sent a written default notice on Feb 13, 2009, and a foreclosure notice on June 3, 2009.
- Provident conducted a nonjudicial foreclosure sale on July 7, 2009, and purchased the property as the sole bidder.
- The Reeses sued for wrongful foreclosure, arguing Provident’s foreclosure notice failed to identify the secured creditor and that Provident did not comply with the Security Deed’s notice/acceleration terms.
- The trial court granted summary judgment for Provident; the court of appeals considered the case in light of You v. JP Morgan Chase Bank.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the foreclosure notice satisfied OCGA § 44-14-162.2 by identifying the party with full authority to negotiate/amend the mortgage | Reeses: Notice failed to properly identify the secured creditor and thus did not comply with the statute | Provident: As servicer, it had full authority to negotiate/amend and the notice identified Provident as such | Held: Provident, as servicer, had the required authority and the notice complied with OCGA § 44-14-162.2 (per You) |
| Whether Provident’s notices complied with the Security Deed’s acceleration/notice requirements | Reeses: February 13 notice and subsequent conduct failed to satisfy the Security Deed, making foreclosure wrongful | Provident: The Feb. 13 notice substantially complied with the Security Deed’s notice requirements | Held: Substantial compliance satisfied the Security Deed; notice was sufficient |
| Whether the foreclosure sale was wrongful or should be set aside for procedural or price inadequacy reasons | Reeses: Foreclosure was wrongful based on alleged notice defects and failure to follow deed terms | Provident: Sale complied with the instrument and was conducted in good faith; no fraud, ambiguity, or gross inadequacy alleged | Held: Reeses failed to show ambiguity, procedural defects, fraud, or gross inadequacy of price; wrongful foreclosure claim fails |
Key Cases Cited
- You v. JP Morgan Chase Bank, 293 Ga. 67 (Supreme Court of Ga.) (statutory notice need only identify the individual or entity with full authority to negotiate/amend mortgage)
- Campbell v. The Landings Assn., 289 Ga. 617 (Ga. 2011) (standard of review on appeal from summary judgment is de novo)
- Kennedy v. Gwinnett Commercial Bank, 155 Ga. App. 327 (Ga. Ct. App.) (foreclosing party must advertise and sell according to instrument and in good faith; sale set aside only for gross inadequacy plus fraud/mistake/etc.)
- Dennard v. Freeport Minerals Co., 250 Ga. 330 (Ga.) (contractual notice requirements are tested for substantial, not strict, compliance)
- Griffin Builders v. Synovus Bank, 320 Ga. App. 307 (Ga. Ct. App.) (reinforces requirements for foreclosure sale conformity with instrument)