Foreclosures For Sale Updated On: 03/18/10
Georgia Foreclosure Laws
Georgia Foreclosure Laws
Georgia is referred to as a title theory state wherein the title of the property stays with the lender till the borrower does not pay off the loan in full. A deed to secure debt, also known as a security deed, is the document that is used to secure the title of the property. A promissory note is the document where the borrower promises to pay off the loan.
Non-judicial foreclosure is the most commonly used process of Georgia foreclosures. If a deficiency is not sought, no court action is required. At the initial signing of the deed to secure debt, there is a provision to include a power of sale clause. This allows the property to be sold in case of delinquency to take care of the loan. The conventional deed of trust which has the trustee acting as the lenders representative and/or holding the deed of trust is not used by the State of Georgia. Courthouse auctions are the most common way for foreclosure sales to take place. This being a non-judicial alternative, very strict requirement for notices is in place, and the presence of the power of sale clause in the mortgage is necessary to follow this method of foreclosure.
Before a foreclosure in initiated, a demand letter which requests the past due amounts to be paid must be sent by the lender. The borrower then has ten days to take care of these payments, failing which, foreclosure proceedings begin. If the property owner can make the payments during this phase, attorney’s fees are not assessed.
A copy of the notice copy then has to be published in a general circulation newspaper within the county where the property is situated, for a period of four succeeding weeks prior to the sale. The notice must also be sent to the borrower by certified mail no later than 15 days prior to the scheduled sale’s date.
Foreclosure sales have to take place at the courthouse between 10:00am and 04:00pm on first Tuesday’s of every month. The property is auctioned at the steps of the courthouse by the trustee and goes to the highest bidder.
Lenders in Georgia can also opt for a judicial foreclosure which takes place through a court, and it is the court that states the final verdict on the foreclosure. The lender has to seek judicial foreclosure if the power of sale clause is not present in the deed of trust. The property then sells as part of a sale that has been publicly notified. A complaint, along with a lis pendens, needs to be filed in court. A lis pendens is a legal document which is used to issue a notice to the public about the property that is going to be foreclosed upon.
The documents are referred to as the deed to secure debt and promissory note, and in the case of a commercial transaction, a security agreement. The security agreement is, on occasion, combined with the mortgage document. A mortgage can also be filed to authenticate the loan in question and its repayment terms, which find a mention in the promissory note.
It generally takes about 60 to 90 days to bring into effect a non-judicial foreclosure that has gone uncontested; this does depend on the time necessary by various notices. If the action is contested in the court by the borrower, and if the sale is sought to be postponed or if the borrower files for bankruptcy, the process can be delayed.
Once a successful bidder receives a deed under power of sale at the auction, the statutory right of redemption does not exist in Georgia.
If a foreclosure property is sold for lesser than the amount that is remaining on the loan, a deficiency judgment can be obtained by the lender. A period of thirty days is available to the lender to get a deficiency judgment, this period starting after the foreclosure sale.
Foreclosures in Georgia are governed by laws that are part of the Georgia Code (O.C.G.A) O.C.G.A §44-14-162 et. seq. Actions to assert wrongful foreclosure for improper notice are referenced under O.C.G.A §9-11-65, and various notice requirements for Sheriff’s foreclosure sales are referenced under O.C.G.A. §9-13-140(a).
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