Foreclosure Confirmation Victory

Congratulations to the Bloom Sugarman Everett law firm for winning a foreclosure confirmation at trial and having the ruling affirmed by the Georgia Court of Appeals. Eagle GA | SPE LLC v. Atreus Communities of Fairburn Inc., A12A2344 (2/21/2013).

Atreus involved 13-developed lots, which were foreclosed for $155,000. As is typical in these type of cases, this confirmation hearing ended up being a battle of the appraisal experts. Here, the trial court found that $155,000 was less than the fair market value for the subject property and denied confirmation.

The trial court found that the lender’s appraiser failed to consider the sales comparison approach to value the property as required by the Uniform Standards of Professional Appraisal Practice (USPAP), wrongly calculated the tax liability of the property, and admitted the absorption period in his report was a “guestimate.” The trial court also found that the expert’s discounted cash flow model to be unreliable and unsupported.

On the other hand, the bulk sales comparison used by the borrower’s appraiser was found to be credible. This approach resulted in an appraisal of $228,000.

The Georgia Court of Appeals agreed with the trial court because the record showed the lender’s appraiser failed to support his opinions with reliable facts, and failed to consider the more reliable bulk sales comparison. The Court of Appeals noted that the trial court is entitled to weigh the evidence and judge the credibility of both experts. Because the record contained evidence to support the trial court’s ruling, the Court of Appeals was not in a position to second-guess the trial court.

Next, the lender contended that the trial court erred in not ordering a resale of the property under OCGA Sec. 44-14-161(c). The Court of Appeals found that a lender is not entitled to a resale simply because there may have been a flawed appraisal; and, moreover, the decision to order a resale is wholly at the discretion of the trial court.

At Gomez & Golomb LLC, we have handled many foreclosure confirmation hearings, both for the lender and for the borrower. If you have any questions, please call us at (404) 382-9994.

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