Federal National Mortgage Association v. TN Metro Holdings XII LLC et al

Federal National Mortgage Association (“FNMA”) initially brought this action for foreclosure and damages against a borrower,TN Metro Holdings XII LLC (“TN Metro XII”) alleging default by failure to make scheduled principal and interest payments, by improperly allowing liens against the mortgaged property in violation of the loan agreements and by misapplication of rents collected from leasing the mortgaged property. FNMA subsequently filed an amended complaint seeking relief in the nature of personal liability against Defendant Selim Zherka under the loan. The trial court granted FNMA summary judgment and held both the borrower and “Key Principal” liable for the deficiency following a foreclosure sale and for damages. We vacate the summary judgment, holding that (1) FNMA failed to provide written notice and a thirty-day period to cure the alleged defaults as required by the parties’ agreement; and (2) there are genuine issues of material fact making summary judgment improper regarding FNMA’s claim for damages resulting from the alleged misapplication of rents.