Georgia District Court Offers New Authority on Issue of "Full
Authority" Under O.C.G.A. § 44-14-162.2
By Ashby K. Fox and Monika V. Scott
In the latest chapter of the Georgia courts' attempts to interpret Georgia's foreclosure notice statute,
O.C.G.A § 44-14-162.2, the U.S. District Court for the Northern District of Georgia issued an opinion
on February 25, 2014 granting the plaintiffs' motion for leave to file an amended complaint to assert
that the foreclosure notice that they received was deficient because it did not include "the name,
address and telephone number of the individual or entity who shall have the full authority to
negotiate, amend, and modify all terms of the mortgage." Chae Yi You and Chur K. Bak v. JP Morgan
Chase Bank, N.A. and Federal National Mortgage Association, No. 1:12-CV-202-JEC-AJB, slip op. (N.D.
Ga. February 25, 2014). Specifically, the Court found that the plaintiffs' amended complaint stated a
plausible claim for relief for wrongful foreclosure by alleging that the foreclosure notice was invalid
because, although the foreclosure notice identified the servicer of plaintiffs' loan, it failed to identify
Federal National Mortgage Association ("Fannie Mae"), who plaintiffs alleged was the entity with the
"full authority to negotiate, amend, and modify" the plaintiffs' loan by virtue of its servicing
guidelines. You at 6.
In You, the plaintiffs asserted a claim for wrongful foreclosure in their original complaint, alleging that
the foreclosure notice was deficient because it failed to identify the "secured creditor" of the loan.
You at 2. The defendants, Fannie Mae and JP Morgan Chase Bank, N.A. ("Chase"), moved to dismiss
the complaint. In ruling on the motion, the District Court certified several questions to the Georgia
Supreme Court, including the question of whether O.C.G.A § 44-14-162.2 requires that the secured
creditor be identified in the foreclosure notice. You at 2. The Georgia Supreme Court answered this
question in the negative, concluding that O.C.G.A § 44-14-162.2 requires only that the foreclosure
notice identify the individual or entity with the "full authority to negotiate, amend and modify" the
loan and does not require that the "secured creditor" be identified in the foreclosure notice. See You
v. JP Morgan Chase, 293 Ga. 67, 743 S.E.2d 428 (May 20, 2013). However, the Supreme Court did not
address the question of whether the servicer of a loan can have "full authority to negotiate, amend,
and modify" the loan when it is bound by servicing guidelines.
The plaintiffs in You responded to the Georgia Supreme Court's opinion with a motion for leave to
amend their complaint pursuant to Federal Rule 15(a). Although they conceded that their claims that
the foreclosure notice was deficient for failing to identify the "secured creditor" were no longer
viable, the plaintiffs sought to amend their complaint to allege that the foreclosure notice was
deficient because it did not identify the individual or entity with the "full authority" to negotiate "all
terms of the mortgage." You at 3. Specifically, the plaintiffs argued that the foreclosure notice,
which identified Chase as the entity with "full authority," did not comply with O.C.G.A § 44-14-162.2
because Chase's authority to modify the mortgage was limited by Fannie Mae's servicing guidelines
