Opinion ID: 1036719
Heading Depth: 2
Heading Rank: 3

Heading: Other Specific Loans

Text: Residential demanded Terrace repurchase a loan made to Lawrence and Sandra Altmeyer due to undisclosed debts on their mortgage application. Failure to fully disclose pre-existing debts is an Event of Default and breaches the Client Guide. Appellant's App. 356, 463. To substantiate its demand, Residential relied on four prior mortgage agreements bearing the Altmeyers' names. Terrace argues, as it did before the district court, that these mortgage agreements do not show the balance of the debts on the day the Altmeyers applied for the loan presently at issue. Because it is possible the Altmeyers paid off their mortgage debt, Terrace claims, Residential's demand is based on pure speculation. Appellee's Br. 15. We cannot review this argument. It is undisputed Residential determined an Event of Default existed and properly notified Terrace of the Event. Terrace did not independently investigate Residential's claim, Shortridge Dep. 233:17-21, Appellee's App. 59, and has not repurchased the loan. To inquire further by reviewing the validity of Residential's Event of Default determination is to contradict unambiguous contract language. Minnesota law does allow such an inquiry. Travertine Corp., 683 N.W.2d at 271.
Residential demanded Terrace repurchase two loans issued to finance two separate pieces of property because the original appraisals improperly inflated the value of the properties, in violation of the Client Guide. Appellant's App. 347, 356, 492. Residential employed the services of Meredith Herring, a professional appraiser, who reviewed the initial appraisals and concluded they overvalued the properties. Terrace takes issue with several aspects of Herring's testimony, including (1) she was -13- paid to testify; (2) she begins with the premise there is a problem with an initial appraisal when reviewing that appraisal; (3) she had no knowledge of the interior of each property she reviewed; and (4) she spent insufficient time evaluating one of the properties. Terrace also contends Residential did not comply with the requirements of Georgia law when it attempted to recover a deficiency following the foreclosure of the two property interests. Terrace's objection to Herring's testimony ultimately concerns the validity of Residential's determination an Event of Default had occurred, and therefore, we again decline to review it. As for its claim regarding the deficiency, Terrace identifies nothing in the Client Guide which requires Residential to comply with local law when pursuing a deficiency, nor does it identify any provision stating non-compliance with local law terminates Residential's right to demand repurchase. Terrace's arguments are of no moment.