Georgia Foreclosure Overview

In this overview:

In General

Virtually all foreclosures in Georgia are through the exercise of the private power of sale contained in the security instrument, which, in Georgia, is known as a Security Deed. The procedure is entirely non-judicial and often takes less than 2 months.

In most instances the lender has the right to accelerate the debt and commence foreclosure upon any material breach of the Security Deed or Note, which it secures. Once the debt is accelerated, the borrower has no right to prevent foreclosure by merely paying missed mortgage payments, unless the security deed provides otherwise. Most security deed forms (the conventional FNMA/FHLMC security deed) do provide the borrower the right to cure the default after acceleration.

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Publication of Notice and Notice to Interested Parties

Foreclosure is commenced by submitting a foreclosure advertisement to the official county newspaper for publication once a week during each of the four consecutive weeks prior to the sale date. The sale date is always on the first Tuesday of each month (unless that day is New Year’s Day or the Fourth of July, in which case foreclosures will be held on the Wednesday of that week). The advertisement must contain the following:

  • Description of the security deed
  • A legal description of the property and property address
  • Date and place of the sale
  • Other requirements dictated by the Security Deed

The purpose of the publication is to notify the public of the sale and encourage competitive bidding. Anything in the advertisement tending to discourage competitive bidding may provide a basis for enjoining the sale.

If the borrower’s residence is involved, Georgia law further requires that the lender notify the borrower of the pending foreclosure by mailing a notice at least 30 days before the sale date by certified mail, return receipt requested. Unless the borrower has provided a different mailing address, the notice is sent to the property address and is deemed given on the date it is postmarked. The notice consists of either a copy of the foreclosure advertisement as published, or the advertisement as submitted to the newspaper for publication. A foreclosure of a residence is not valid unless this notification is timely mailed to the borrower.

Georgia law does not require that junior mortgagees or other junior lien holders be notified of the pending foreclosure. However, lenders often choose to send notice for practical reasons. If a junior mortgage is foreclosed subject to a senior mortgage, there is no requirement that the senior mortgagee be notified.

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Foreclosure Sale

After the foreclosure advertisement is duly published in the county newspaper and the borrower has been provided with the 30-day notice of sale, the foreclosure sale can take place on the first Tuesday of the following month (except those rare cases when the sale will be on the following Wednesday, as explained above). The sale takes place before the door, on the court steps of the superior court for the county in which the land is situated, at the place where the sheriff’s sales are conducted. The sale must take place between the hours of 10:00 a.m. and 4:00 p.m. Consistent with the published advertisement, the sale is a public auction of the property, generally conducted by the lender’s attorney. If the security deed so permits (and it usually does) the lender is entitled to bid at its own foreclosure sale. The lender’s attorney conducting the sale may, and generally does, make bids on behalf of the lender. The property is sold to the highest bidder, who must either pay in cash or certified funds at the time of the sale.

Generally, Georgia law does not require that property in foreclosure be sold at market value or at any particular amount. The sale is valid even if it only brings a nominal amount. Where the lender does not intend to pursue a deficiency judgment, it is customary to bid in the property for debt plus costs. However, where the lender intends to pursue a deficiency judgment, then it is essential that the land be appraised before the sale and that the lender bid no less than FULL FAIR MARKET VALUE of the land. As explained below, a deficiency judgment will not be allowed if the property forecloses at anything less than full fair market value.

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Effects of the Foreclosure

Unlike many states, Georgia gives the borrower no right to redeem the property after the sale. If properly conducted, the foreclosure sale divests the borrower of all rights in the property and eliminates all junior liens (other than certain tax liens and liens held by the United States government). A junior federal tax lien encumbers the property and gives the United States 120 days after the sale to redeem the property. This assumes that the IRS has been given proper notice of the foreclosure sale at least 25 days before the sale. If not, the federal tax lien will survive the foreclosure sale. Also, if the United States or any agency thereof has a junior lien, it may claim a one-year right to redeem.

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Foreclosure Deed

The Deed Under Power conveys the property to the successful bidder at the foreclosure sale. The holder of the Security Deed executes the deed as “attorney-in-fact” for the borrower. The Deed Under Power vests in the purchaser the same right, title, and interest in the property as the borrower had. No payment of transfer tax is required on a foreclosure.

If the foreclosed property is to be conveyed to an insuring governmental agency, it is customary for the lender to take title in its own name through the Deed Under Power, and then transfer title to the agency through a separate special warranty deed.

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