IN THE MATTER OF THE FORECLOSURE of a Deed of Trust executed by Michael James Garvey and Jane Holzer Godbrey a/k/a Emily J. Holzer a/k/a Jane Holzer and Jacqueline Holzer dated March 9, 2004, and recorded on April 14, 2004, in Book 311 at Page 347, Ashe County Registry; Substitute Trustee Services, Inc., Substitute Trustee
Heard in the Court of Appeals 6 November 2014.
This Decision is not final until expiration of the twenty-one day rehearing period. [North Carolina Rules of Appellate Procedure 32(b)]
Hutchens, Senter, Kellam & Pettit, P.A., by Lacey M. Moore, for petitioner-appellee.
Katherine S. Parker-Lowe for respondent-appellant.
GEER, Judge. Judges STEELMAN and STEPHENS concur.
Appeal by respondent from order entered 12 August 2013 by Judge Richard L. Doughton in Ashe County Superior Court,
No. 12 SP 98.
Respondent Michael J. Garvey appeals from an order allowing petitioner, Substitute Trustee Services, Inc., to proceed with foreclosure on certain real property that Mr. Garvey owned. On appeal, Mr. Garvey primarily argues that the superior court failed to conduct a de novo hearing as required by N.C. Gen. Stat. § 45-21.16(d1) (2013) and failed to make specific findings of ultimate fact and conclusions of law as required by Rule 52(a)(1) of the Rules of Civil Procedure. We agree that the superior court's order lacked sufficient findings of fact to comply with Rule 52(a)(1). Moreover, we cannot determine from the order or the transcript whether the superior court conducted a de novo hearing as required by statute, as opposed to essentially engaging in an appellate review of the order of the clerk of superior court. We, therefore, reverse and remand for a de novo hearing and entry of an order compliant with Rule 52(a)(1).
On 9 March 2004, Mr. Garvey executed a mortgage with Quicken Loans Inc. in the amount of $80,700.00. The mortgage included an Adjustable Rate Note (" ARN" ), a Second Home Rider, and an Adjustable Rate Rider. The mortgage was secured with property in West Jefferson, North Carolina by a deed of trust executed by Mr. Garvey, Jane Holzer Godbrey, and Jaqueline Holzer.
The ARN was endorsed by Quicken Loans to Countrywide Document Custody Services, then by Countrywide Document Custody Services to Countrywide Home Loans Inc., and then by Countrywide Home Loans in blank. At some point, Countrywide Home Loans changed its name to BAC Home Loans Servicing LP, which subsequently merged with Bank of America, N.A.
Mr. Garvey defaulted on the mortgage, and on 27 August 2012, Substitute Trustee Services filed " AMENDED NOTICE OF HEARING PRIOR TO FORECLOSURE OF DEED OF TRUST." This notice explained that petitioners intended to foreclose on the West Jefferson real property by power of sale. It further explained that petitioners
have the right to appear at the hearing and contest the evidence that the clerk is to consider under G.S. 45-21.16(d). To authorize the foreclosure the clerk must find the existence of (i) a valid debt of which the party seeking to foreclose is the holder, (ii) a default, (iii) a right to foreclose under the instrument, (iv) notice to those entitled to notice, and (v) that the underlying mortgage debt is not a home loan as defined in G.S. 45-101(1b), or if the loan is a home loan under G.S. 45-101(1b), that the pre-foreclosure notice under G.S. 45-102 was provided in all material ...