Wednesday, September 28, 2011

How to Determine Whether A Borrower can Stop a Foreclosure based on the Lack of a Proper Assignment

My firm seems to answer the following question, again and again:  Can I (borrower) stop my foreclosure in a Georgia Superior Court (generally, the County in which the house or property is located) by filing some action against the foreclosing lender?  
Well that action would be a Motion for a Temporary Restraining Order (OCGA § 9-11-65(b)) [1] or a Motion for a Permanent Injunction -- which must be filed shortly after the TRO, if granted, anyway.   TRO’s only last for thirty (30) days by law and then expire.  
The first thing we look for is whether the Security Deep upon which the lender if foreclosing is recorded as the last assignment.
For Example:   Assume you (borrower) borrowed $250,000.00 from Wells Fargo (original lender) in 2004.   Wells Fargo then sold the Note and Security Deed to Bank of New York/Mellon in 2007.   Then assume, Bank of New York/Mellon sold the Noted and Security Deed to Bank of America in 2009.
To determine whether you (borrower) have any chance of obtaining a Georgia TRO, examine the last Assignment of Record.   I will ignore the Mortgage Electronic Registration System (MERS) in this analysis, since the Georgia Supreme Court has yet to issue an opinion prohibiting nominee assignments by MERS.  
To determine whether you (borrower) have any chance of blocking the foreclosure sale on lack of a proper corporate assignment, conduct the following search.
Examine the Notice of Sale that was mailed to you by the lender and determine which lender is publishing the foreclosure.   It should read the last lender of record – or, in the above case, Bank of America.     If you cannot find it, search on-line for it at:

Then you will need to search online for the last filed assignment.

The last filed assignment should be available online at:

Unfortunately, you will have to pay money to see your own assignment.  Unless you have a monthly account with GSCCCA, they will require you to purchase the viewing or printing of it with a credit card (sorry about that).

When on GSCCCA, using the search routine for your county, search to see if the last assignment is of record.   In the above example, it should be something like:   Bank of New York/Mellon to Bank of America.  However, it could be MERS to Bank of America.   Also, it could be something strange like Wells Fargo and MERS to Bank of America (with the Bank of New York/Mellon not visible because it went through MERS).   The last assignment needs to be to Bank of America, since that is the lender that is publishing the foreclosure.   [2]

Thus, in the above example is to the Bank of America, you probably will not be able to make out any claims associated with the Assignment.

If however there is no assignment of record and/or the last assignment is to the First National Bank of Willacoochee, you (borrower) may have a shot at stopping the sale.  [3]

Thus, if you (borrower) cannot stop the sale based on a faulty assignment or no assignment, you may need to consider looking to stop the sale with a Chapter 13 or Chapter 7 filing in bankruptcy.   A Chapter 7 will, in the long run, require the surrender (or allow the foreclosure of) the property.  [4]

Hugh Wood, Esq.
Wood & Meredith, LLP
3756 LaVista Road
Suite 250
Atlanta (Tucker), GA 30084
twitter: USALawyer_
Phone: 404-633-4100
Fax: 404-633-0068

OCGA § 9-11-65. Injunctions And Restraining Orders

(a) Interlocutory injunction.

(1) Notice. No interlocutory injunction shall be issued without notice to the adverse party.

(2) Consolidation of hearing with trial on merits. Before or after the commencement of the hearing of an application for an interlocutory injunction, the court may order the trial of the action on the merits to be advanced and consolidated with the hearing of the application. Even when this consolidation is not ordered, any evidence received upon an application for an interlocutory injunction which would be admissible upon the trial on the merits shall become a part of the record on the trial and need not be repeated upon the trial. This paragraph shall be construed and applied so as to save any rights of the parties which they may have to trial by jury.

(b) Temporary restraining order; when granted without notice; duration; hearing; application to dissolve or modify. A temporary restraining order may be granted without written or oral notice to the adverse party or his attorney only if:

(1) It clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or his attorney can be heard in opposition; and

(2) The applicant's attorney certifies to the court, in writing, the efforts, if any, which have been made to give the notice and the reasons supporting the party's claim that notice should not be required.

Every temporary restraining order granted without notice shall be endorsed with the date and hour of issuance, shall be filed forthwith in the clerk's office and entered of record, and shall expire by its terms within such time after entry, not to exceed 30 days, as the court fixes, unless the party against whom the order is directed consents that it may be extended for a longer period. In case a temporary restraining order is granted without notice, the motion for an interlocutory injunction shall be set down for hearing at the earliest possible time and shall take precedence over all matters except older matters of the same character; when the motion comes on for hearing, the party who obtained the temporary restraining order shall proceed with the application for an interlocutory injunction; and, if he does not do so, the court shall dissolve the temporary restraining order. On two days' notice to the party who obtained the temporary restraining order without notice or on such shorter notice to that party as the court may prescribe, the adverse party may appear and move its dissolution or modification; and in that event the court shall proceed to hear and determine the motion as expeditiously as the ends of justice require.

(c) Security. As a prerequisite to the issuance of a restraining order or an interlocutory injunction, the court may require the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been enjoined or restrained wrongfully. A surety upon a bond or undertaking under this Code section submits himself to the jurisdiction of the court and irrevocably appoints the clerk of the court as his agent upon whom any papers affecting his liability on the bond or undertaking may be served. His liability may be enforced on motion without the necessity of an independent action. The motion and such notice of the motion as the court prescribes may be served on the clerk of the court, who shall forthwith mail copies to the persons giving the security if their addresses are known.

(d) Form and scope of injunction or restraining order. Every order granting an injunction and every restraining order shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; and is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive notice of the order by personal service or otherwise.

(e) When inapplicable. This Code section is not applicable to actions for divorce, alimony, separate maintenance, or custody of children. In such actions, the court may make prohibitive or mandatory orders, with or without notice or bond, and upon such terms and conditions as the court may deem just.

And for you diehards who persist in the “show me the Note,” challenge and/or look for the assignment of the Note, there is no public database (that is available to the public) to visualize the assignment of the Note.   As far as the author is aware (and I invite caselaw from anyone to the contrary – and I will post it) there is no body of law in Georgia that will stop a state foreclosure, based on a mere “show me the Note” challenge to the lender prior to foreclosure.
But do not be surprised if the lender produces the proper assignment on the Monday before the Tuesday sale.   Can the lender do that?  Yes.
And be prepared for the Judge’s first question if you do file something (except in bankruptcy).   “Why didn’t you just pay the mortgage?”

1 comment:

Unknown said...

When Facing Foreclosure first think to remember is to contact your lender if they did not take action then claim to lender to
Stop Foreclosure