Georgia Foreclosure Laws

Georgia foreclosure laws are the legal procedures by which a lender repossesses collateral for a loan which is in default. These laws are normally applied when one fails to meet repayments for a mortgage. The lender therefore obtains legal right to sell off the property due to non payment by the owner.

Georgia is a title theory state where the property is held in trust until full payment of the underlying loan is made. A deed in lieu of foreclosure form is a secure debt, a security deed or promissory note document is used to secure title to a property. The document contains a power of sale clause which allows the lender to sell property in case of default on payments.

Georgia Non Judicial Foreclosure

The primary method used for foreclosure in this state is known as non-judicial foreclosure because of the power of sale provision in the deed document. This provision allows for foreclosure upon default on mortgage premiums in order to satisfy the underlying loan.

When dealing with a non judicial foreclosure, very strict notice requirements and legal documents that contain the power of sale language are required.

The notice requirements are:

• The lender is required to send a demand letter of all outstanding mortgage premiums requiring the borrower to pay all arrears within 10 days or face foreclosure.
• If payment is not made, the lender publishes a notice of foreclosure in a local newspaper that circulates the county where property is located for 4 weeks before the intended auction. The same notice must be sent my registered mail to the borrower at least 15 day prior to the intended auction.
• Foreclosure auctions take place on the first Tuesday of the month between 10 am and 4 pm. The property is auction at the court house to the highest bidder by the trustee.

Georgia Judicial Foreclosure

In this state, a judicial foreclosure is also allowed where the lender obtains a final judgment of foreclosure from court. This happens when the trust deed does not contain the power of sale clause. A complaint and a lis pendens is filed in court. A lis pendens is a public notice document that informs the public that a property has a pending suit on it. The property is the auctioned as part of a public sale.

Process Period

When a foreclosure is uncontested, it can take a period of 60-90 days depending on the time take to process the required documents. The process can be delayed if the borrower contests the sale in court and seeks to delay or postpone the auction or files for bankruptcy.

Notice of Sale

A notice of intended auction must be published in the newspaper for the 4 weeks before sale. The same notice must be sent to the borrower at least 30 days before the intended sale date. The notice must include location, date, time, description of the property, mortgage information, name of lender and the borrower.

Redemption

The state of Georgia does not allow for a post sale statutory right of redemption after a foreclosure is concluded. A deed under power of sale is normally issued to the highest bidder. Once this happen, the owner cannot redeem the property.

Deficiency judgment

The state of Georgia allows for the court to issue a deficiency judgment when property is sold at a public auction for less that the loan amount secured by the trust deed. The lender must seek a deficiency judgment 30 days after foreclosure.

Foreclosure laws may change from time to time in any state. It is therefore important to seek legal counsel to obtain up to date details on foreclosure laws in Georgia.