Suwanee foreclosure case goes to Supreme Court

SUWANEE -- An appeal of a foreclosure case of a home on Crescent Walk Lane in Suwanee will be heard by the Supreme Court of Georgia next week.

The case involves Chae Yi You and Chur K. Back, who purchased the home in 2003 through a loan from Excel Home Loans. But the home was listed for sale at a foreclosure auction in August, 2011 by Chase Manhattan Mortgage Corporation, after it was assigned the security deed from Excel, and later merged with JPMorgan Chase Bank.

In a notice of sale, the principal amount of the home was listed at $185,000.

Chase then transferred its interests in the property to the Federal National Mortgage Association, also known as "Fannie Mae."

Fannie Mae then started "dispossessory" proceedings against You and Back, and they were evicted from the property in November, 2011 by the Gwinnett County Marshall's Department.

This is the third case involving parties from Gwinnett to be heard by the state's high court in the last four months. Attorneys for the city of Suwanee and Settles Bridge Farm, LLC made arguments in October, and in November, arguments about Gwinnett's controversial trash plan were heard by the justices.

At issue in the foreclosure case, according to three certified questions from the federal district court, is "can the holder of a security deed be considered a secured creditor who may initiate foreclosure proceedings" even if it doesn't hold a note on the property. And does state law require that a secured creditor be identified in a foreclosure notice.

The district court also cited a lack of any "clear controlling precedents."

David Ates, the attorney for You and Back, has argued that the holder of a security deed who does not have interest in debt obligation cannot be a secured creditor, and therefore lacks the authority to conduct non-judicial foreclosures.

You and Back contend that the foreclosure was invalid because Chase didn't hold the promissory note on the property during the foreclosure.

The attorneys for Chase disagree, and said every district court judge in the 11th Circuit except one agrees with that position.