Wednesday, November 10, 2010

Pre and Post Foreclosure Litigation in Georgia

By: Hugh C. Wood, Esq.
Wood & Meredith, LLP
Atlanta, GA

Georgia is a non-judicial foreclosure state. As a title theory state, the lender owns the title in the security deed as opposed to having mere lien on title. Once these rapid fire foreclosures get started in Georgia, they are hard to stop. [1]

If the borrower does not pay according to the terms of the security deed, the lender then proceeds to sell the borrower’s real property in a non-judicial sale on the courthouse steps. Pursuant to the terms of most standard Fannie Mae and Freddie Mac security deeds, the lender will send a ten (10) day default and acceleration letter to the borrower and allow the borrower ten (10) days in which to pay all sums then due to avoid the imposition of attorney’s fees in foreclosure. [2]

If and to the extent the borrower does not cure the default, the lender will proceed to notice the property for sale on the courthouse steps. If the property is residential (the rules are relaxed for a purely commercial foreclosure), then the lender must publish for four (4) consecutive weeks in the legal organ of the county where the property is located and provide the borrower with thirty (30) days written notice prior to sale. The rule used to be fifteen (15) days written notice. [3]

For a borrower to raise issues in court in Georgia, the borrower must “get into a Georgia courtroom.” Getting into court in a non-judicial foreclosure proceeding is not an easy task. This article will review the four (4) possible methods of raising claims about a foreclosure in a Georgia (including federal) courtroom: 1) the pre-foreclosure injunction hearing, 2) the pre-foreclosure adversary proceeding bankruptcy hearing, 3) the post-foreclosure wrongful foreclosure suit, and 4) the post-foreclosure deficiency judgment hearing.

1. The Pre-Foreclosure Injunction Filing

Once a property gets listed for a foreclosure sale in Georgia, it becomes extremely difficult to stop the foreclosure sale. For some reason, television perhaps, borrowers think that the lender must sue them prior to foreclosure. While that is true in a pure judicial foreclosure state, for example, Ohio, New York, Florida, there is no such requirement in Georgia. All the borrower will receive in a non-judicial Georgia foreclosure is the notice of default and acceleration and the notice of publication in the legal organ.

Stopping a Georgia foreclosure is not easy. First, though they rarely realize it, the borrower must have some cogent reason to stop the sale – other than mere nonpayment. Mere non-payment standing alone will not stop the foreclosure. A borrower must be able to show that the lender is foreclosing on the wrong parcel, or that the lender is foreclosing on too many parcels or that only one is pledged for the debt. Or, the borrower must show that the lender has received a partial payoff of the debt and the noticed debt is now incorrect, or (and this is currently vogue) that the lender is not the proper party to bring the action because there is a missing assignment or lost assignment. [4] Or, the borrower shows, based on facts, that the lender does not have “standing” to proceed with a non-judicial foreclosure. That is fancy language for a statement that the lender does not own the debt at the time it published the foreclosure. Id.

Assuming that the borrower has a legal reason to stop the foreclosure, then and in that event, the borrower may file a Petition (in equity) for a Temporary Restraining Order (TRO). [5] It is important to note that, because Georgia has a confusing name for its lower court of unlimited jurisdiction, the “state court,” an injunction suit must be filed in the plenary court, the “superior court.” Only the superior court has jurisdiction in equity to stop foreclosure. By the time this error is spotted, the sale will have passed.

In an injunction lawsuit, the borrower must allege the promissory note and the security deed. The borrower must fully describe the real property with a valid legal description, he must assert that he is in the correct court and he must allege that he as the Petitioner will suffer immediate and irreparable harm if the foreclosure sale is not immediately enjoined. He must allege and meet the Georgia TRO standard. [6] The immediate threat is that the property will be wrongfully sold to a third party. While the court will have jurisdiction over the lender based on the TRO suit and the suggested filing of a Lis Pendens on the land records, no such jurisdiction will be had over a third party purchaser. The third party may become a bona fide purchaser for value, if the sale is not enjoined.

The notice standard to the lender is quite strict. The borrower must give the lender notice of the emergency hearing on the TRO and provide it with an opportunity to oppose the TRO. Two or three days notice is not unusual. Almost no hearings are granted ex parte. Not only must the borrower make out his claim for relief, but he must show at the TRO hearing that there is a substantial likelihood that he will prevail against the lender at a full trial on the matter. This proof is always a challenge with no discovery at this stage of the proceedings. The best attacks are that the lender has no valid assignment, or no standing, or that lender is foreclosing on the wrong loan. Or, that borrower’s loan has been reinstated. The new and novel claim is that the lender has entered into a written modification of the loan, but no one at lender’s office told foreclosure counsel to stop the pending foreclosure.

Assuming that borrower wins the TRO hearing, the battle is not over. By law, the TRO expires within thirty (30) days. A superior court cannot issue a TRO for longer than thirty (30) days. Thus, for borrower to seek complete relief under this equitable statute, he must proceed to obtain a hearing on a permanent injunction within the next 30 days. The permanent injunction may or may not end the matter.

Generally, if the permanent injunction is granted in a later hearing it is only good through a trial on the matter, which may occur within a year or two. If borrower does obtain a permanent injunction the cases almost invariably settle, resolve or deteriorate into fights over who as the legal authority or standing to foreclosure. These suits are expensive and do not always prevail. If they fail, they expose the borrower and the borrowers’ lawyer to an adverse award of attorney’s fees. [7] That said, they are the most powerful tool at the state level to stop a pending foreclosure.

2. The Pre-Foreclosure Bankruptcy Filing

A federal bankruptcy filing pre-foreclosure will absolutely stop the foreclosure. Once bankruptcy is filed, the automatic stay granted all debtors automatically stops a Georgia foreclosure. [8]

The technical aspects of bankruptcy are beyond the scope of this article. However, if a borrower considers the potential of filing an Adversary Proceeding suit in bankruptcy prior to a Georgia non-judicial foreclosure, he will be able to “get into” a Georgia courtroom prior to the foreclosure.

There are only four (4) relevant bankruptcy chapters under which a debtor may stop a foreclosure. They are, generally, Chapter 7 (complete liquidation), Chapter 12 (small farmers and small fishermen), Chapter 13 (wage earner plans) and Chapter 11 (business reorganization). The focus of this analysis is not bankruptcy, but whether the borrower (now debtor) can get into a courtroom pre-foreclosure and assert claims against a lender in Georgia prior to the exercise by the lender of the non-judicial foreclosure. An Adversary Proceeding is a lawsuit filed inside the confines of the bankruptcy court, either by the lender against the borrower or by the borrower (debtor) against the lender (creditor).

The issue of whether a borrower may stop the foreclosure, 11 U.S.C. § 362, and then proceed with an affirmative lawsuit against the lender turns on who owns the debtor’s claim. If the borrower files a complete liquidation Chapter 7, the Chapter 7 Trustee owns the estate and the borrower has no power to compel the Chapter 7 Trustee to bring an Adversary Proceeding against the lender. It is possible that the Chapter 7 trustee will abandon the claim to the debtor, but since debtor has filed for a complete liquidation, it is most likely a useless event. [9]

A Chapter 13 functions like a pseudo Debtor In Possession (DIP) case. So, in a Chapter 13 (and the more rare small farmer Chapter 12), a borrower (debtor) may be able to bring an Adversary Proceeding against the lender. The Chapter 13 debtor must make regular payments while the claim is pending. Since debtors are in bankruptcy because they do not possess liquid funds, the debtor may run of money and time before the bankruptcy court resolves the Adversary Proceeding. Yet, the Chapter 13 is a method of pulling the lender into a forum of litigation prior to the non-judicial foreclosure.

Chapter 11 in a real estate setting almost always turns on a Single Asset Real Estate (SARE) filing. [10] A SARE bankruptcy filing will be dismissed within 90 days, or shortly thereafter, if the debtor fails to pay the interest due on the scheduled real property note. Thus, most of the SARE filings are dismissed and the real estate is thereafter foreclosed upon. However, again, it is a powerful method to obtain a court hearing prior to the foreclosure. [11]

3. The Post-Foreclosure Wrongful Foreclosure Suit

Once the foreclosure has occurred in Georgia, the borrower’s options become substantially limited. There is no right of redemption in Georgia as such right exists in a handful of other states. When the foreclosure is final, the title to the property becomes vested in the lender (or a third party purchaser) and title is no longer found in the borrower.

A wrongful foreclosure case is a tort case filed against the lender. A tort is a civil wrong that is cured by damages awarded against the lender. Most generally a post foreclosure tort requires the following minimal elements: 1) a duty owed by the lender to the borrower, [12] 2) a breach of that duty by the lender, 3) a showing that the breach proximally caused damages to the borrower, and 4) a showing that the borrower suffered identifiable money damages. [13]

The Georgia Court of Appeals has stated on numerous occasions, “Georgia recognizes the tort of wrongful foreclosure. As [we have] noted, "[t]here exists a statutory duty ... to exercise fairly and in good faith the power of sale in a deed to secure debt [,and] breach of this duty is a tort compensable at law." [14]

One avenue of “redress” that a wronged borrower has “after the foreclosure,” is to sue the lender for wrongful foreclosure. It is important to note that a wrongful foreclosure suit may not recover the property. A wrongful foreclosure suit (unless settled by a return of the property – which requires no intervening third party purchaser) will only produce money damages. The reason that the wrongful foreclosure action may not produce the return of the real property is that the property may have been conveyed to a third party on the courthouse steps. Or the lender, acting well within its legal rights, may have conveyed the property to a purchaser that is not tainted by the allegations of the wrongful foreclosure claim.

What types of breach of duty rise to wrongful foreclosure? They are legion. Consider the following:

The reinstatement of the loan prior to the foreclosure, yet the foreclosure matures to sale.
A written loan modification agreement between the lender and borrower. The lender proceeds with the foreclosure on the borrower, because its lawyers are unaware of the foreclosure. [15]
A foreclosure by a lender that does not hold a proper or valid assignment.
A foreclosure that is a clear violation of a signed forbearance agreement.
A failure to comply with the statutory duty to provide notice of sale to the debtor in accordance with OCGA § 44-14-162.
Foreclosing on a cancelled security deed.
Foreclosing on a security deed barred by the passage of time.
Foreclosing on a defective security deed.

What types of damages may be recovered? Damages in wrongful foreclosure clearly include the value of the real estate wrongfully foreclosed. If the debtor elects to sue for damages, the recovery allowed is “the full difference between the fair market value of the property at the time of the sale and the indebtedness to the seller if the fair market value exceeded the amount of the indebtedness." [16]

The other damages are so variant as to go beyond the scope of this article. [17]

The time to bring this action may be as short as two (2) years from the date of the foreclosures. In some instances, it may be even shorter.

The tort suit of wrongful foreclosure is a powerful remedy to keep lender’s conduct in check. However, borrowers must be careful in asserting such claims. The claims must be non-frivolous, have a good faith basis in law and fact and not be interposed for delay. If they are not, the borrower may find himself saddled with lenders attorney’s fees. [18]

4. The Post Foreclosure Deficiency Judgment

Once the borrower loses his real property on the courthouse steps, that may not end the matter of collection. All security deeds in Georgia are underpinned by a promissory note. That is, the debtor really owes the money to the lender or the secured party via the promissory note.

If the foreclosure generates enough money to pay off the debt then and in that event the loan, security deed and promissory note are all extinguished by the sale and the lender is made whole by the sale. This almost never happens.

If the lender were always made whole at foreclosure, then all loans would need to be called “non-recourse,” loans. The secured property would stand for the debt and there would be no other promise – whether promissory note, co-signor note, personal guarantee, etc. A lender’s foreclosure would end the debtor/creditor relationship without regard to how much the property brought at foreclosure sale.

Since lenders are generally not “made whole,” by the courthouse steps sale, many pursue their right to seek a monetary judgment against the borrower. To proceed with this claim, the lender must file a direct action in the superior court of the County where the real property is located within thirty (30) days of the date of the foreclosure. If the lender misses the thirty (30) day deadline, the lender loses its right to seek a deficiency judgment. Any collection on amounts owed after that date by that lender are thereafter wrongful.

A borrower may engage in discovery, but the borrower has to be exceptionally vigilant and prompt. The statute, [19] only requires that the lender give the borrower five (5) days notice of the hearing. If the borrower can get ahead of the power curve or get the cooperation of lender’s counsel (many times lenders will cooperate. They want the judgment and do not want the court viewing their tactics as obstructionist), Borrower may serve a [20] subpoena for the person most knowledgeable about the loan at the bank and/or the person most knowledgeable about the bank’s appraisals. If a borrower cannot get the lender to cooperate with a discovery notice, a borrower may resort to trial subpoenas. Thus, if the borrower desires to proceed with any form of discovery it must use Notice to Produce Subpoenas commanding the lender to produce documents at the deficiency summary proceeding. [21]

There are two (2) bank appraisals that the borrower needs to review. They are, the appraisal that the bank obtained when it made the loan (under a special Georgia statute, the bank may use its own internal officer as an appraiser) and the appraisal it obtained shortly before it foreclosed on the property, if any. If the borrower desires to fight the deficiency judgment, he should obtain a borrower’s appraisal prior to the court hearing. This is a daunting task for most borrowers, given that they have just lost their property in foreclosure and are now facing a deficiency lawsuit. However, a borrower’s appraisal is almost mandatory to show that the sale did not bring the “true market value.” The term “true market value,” is found almost nowhere else, except the Georgia statute and we are not sure exactly what it means. It is, we suppose, akin to “fair market value,” on the day of the foreclosure sale. It may be that if a third party purchased the property on the courthouse steps, then and in that event, the court will look to see if the sale was fair, conducted according to statute and the sale price was “fair,” on the day of sale. Since lenders purchase the great bulk of all foreclosures sales (they buy the property they are selling for the debt), the court will look to see if the bank bid the “true market value” on the day of sale. [22]

When the bank buys the property for the debt it becomes much more important for a borrower to examine the numbers bid at the sale. For example, if the debt on the property is $500,000.00, but the bank only bids $50,000.00, the borrower will be facing a deficiency of $450,000.00 to be paid out of the borrowers personal assets. In such a scenario, the court will scrutinize the foreclosure sale to determine whether the amount bid by the lender on the courthouse steps constituted “true market value.” The hearing really comes down to a battle of the experts – the bank’s appraiser versus the borrower’s appraiser. The owner of the property may, legally, give his or her opinion of the value of the property. [23] However, the better practice is to have a licensed appraiser.

If the lender is successful, it obtains a judgment for the deficiency against the borrower and may pursue it like another judgment. If the borrower is successful, he obtains a resale. While that resale may or may not generate the same outcome, we have found that some type of settlement, generally, comes out of that second sale. While not pure law, the borrower’s odds of a better outcome (if not a pure no-recourse loan) improve substantially if the borrower wins at the deficiency judgment hearing.


In this article it has been shown that Georgia is primarily a non-judicial foreclosure state. It has been shown that lenders need only provide minimal notice to borrowers to proceed with a non-judicial foreclosure of secured real property in Georgia.

Because lenders are not required to file their action in court prior to foreclosure, there is no convenient method for borrowers to raise challenges to a pending foreclosure. It has been shown that there are at least four (4) methods by which a Georgia borrower can raise issues in a courtroom against a lender foreclosing in Georgia. They are: 1) a pre-foreclosure injunction hearing, 2) a pre-foreclosure adversary proceeding bankruptcy hearing, 3) a post-foreclosure wrongful foreclosure suit, and 4) a post-foreclosure deficiency judgment hearing.

Georgia’s waters are choppy for borrowers. However with careful planning and the use of expert witnesses and expert appraisals, borrowers can level the playing field and require lenders to prove each and every claim in Georgia prior to proceeding to foreclosure or obtaining a deficiency judgment.

Hugh Wood, Esq.
Wood & Meredith, LLP
3756 LaVista Road
Suite 250
Atlanta (Tucker), GA 30084
twitter: USALawyer_
Phone: 404-633-4100
Fax: 404-633-0068



Georgia allows for the use of a mortgage, a security deed, and a pledge for title, but 99% of all lending conveyances are by way of the Georgia security deed. In a standard security deed transfer, the lender lends money to the borrower and takes back a promissory note and a full conveyance of the title to the property by security deed. The borrower then is left only with the promissory note (being a contractual requirement to pay the lender) and the equitable right of redemption with regard to the security deed. That is, the borrower no longer owns the property, but has only a mere right to reclaim the property by “paying off,” the promissory note and canceling the security deed.


OCGA § 13-1-11. Validity And Enforcement Of Obligations To Pay Attorney's Fees Upon Notes Or Other Evidence Of Indebtedness
(a) Obligations to pay attorney's fees upon any note or other evidence of indebtedness, in addition to the rate of interest specified therein, shall be valid and enforceable and collectable as a part of such debt if such note or other evidence of indebtedness is collected by or through an attorney after maturity, subject to the following provisions:
(1) If such note or other evidence of indebtedness provides for attorney's fees in some specific percent of the principal and interest owing thereon, such provision and obligation shall be valid and enforceable up to but not in excess of 15 percent of the principal and interest owing on said note or other evidence of indebtedness;
(2) If such note or other evidence of indebtedness provides for the payment of reasonable attorney's fees without specifying any specific percent, such provision shall be construed to mean 15 percent of the first $500.00 of principal and interest owing on such note or other evidence of indebtedness and 10 percent of the amount of principal and interest owing thereon in excess of $500.00; and
(3) The holder of the note or other evidence of indebtedness or his or her attorney at law shall, after maturity of the obligation, notify in writing the maker, endorser, or party sought to be held on said obligation that the provisions relative to payment of attorney's fees in addition to the principal and interest shall be enforced and that such maker, endorser, or party sought to be held on said obligation has ten days from the receipt of such notice to pay the principal and interest without the attorney's fees. If the maker, endorser, or party sought to be held on any such obligation shall pay the principal and interest in full before the expiration of such time, then the obligation to pay the attorney's fees shall be void and no court shall enforce the agreement. The refusal of a debtor to accept delivery of the notice specified in this paragraph shall be the equivalent of such notice.
(b) Obligations to pay attorney's fees contained in security deeds and bills of sale to secure debt shall be subject to this Code section where applicable.


OCGA § 44-14-162.2. Sales Made On Foreclosure Under Power Of Sale - Mailing Of Notice To Debtor - Procedure For Mailing Notice
(a) Notice of the initiation of proceedings to exercise a power of sale in a mortgage, security deed, or other lien contract shall be given to the debtor by the secured creditor no later than 30 days before the date of the proposed foreclosure. Such notice shall be in writing, shall include the name, address, and telephone number of the individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor, and shall be sent by registered or certified mail or statutory overnight delivery, return receipt requested, to the property address or to such other address as the debtor may designate by written notice to the secured creditor. The notice required by this Code section shall be deemed given on the official postmark day or day on which it is received for delivery by a commercial delivery firm. Nothing in this subsection shall be construed to require a secured creditor to negotiate, amend, or modify the terms of a mortgage instrument.
(b) The notice required by subsection (a) of this Code section shall be given by mailing or delivering to the debtor a copy of the notice of sale to be submitted to the publisher.
History. Amended by 2008 Ga. Laws 576, §2, eff. 5/13/2008.
Amended by 2001 Ga. Laws 370, §6, eff. 7/1/2001.


OCGA § 9-11-19.


OCGA § 9-11-65. Injunctions And Restraining Orders
(a) Interlocutory injunction.
(1) Notice. No interlocutory injunction shall be issued without notice to the adverse party.
(2) Consolidation of hearing with trial on merits. Before or after the commencement of the hearing of an application for an interlocutory injunction, the court may order the trial of the action on the merits to be advanced and consolidated with the hearing of the application. Even when this consolidation is not ordered, any evidence received upon an application for an interlocutory injunction which would be admissible upon the trial on the merits shall become a part of the record on the trial and need not be repeated upon the trial. This paragraph shall be construed and applied so as to save any rights of the parties which they may have to trial by jury.
(b) Temporary restraining order; when granted without notice; duration; hearing; application to dissolve or modify. A temporary restraining order may be granted without written or oral notice to the adverse party or his attorney only if:
(1) It clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or his attorney can be heard in opposition; and
(2) The applicant's attorney certifies to the court, in writing, the efforts, if any, which have been made to give the notice and the reasons supporting the party's claim that notice should not be required.
Every temporary restraining order granted without notice shall be endorsed with the date and hour of issuance, shall be filed forthwith in the clerk's office and entered of record, and shall expire by its terms within such time after entry, not to exceed 30 days, as the court fixes, unless the party against whom the order is directed consents that it may be extended for a longer period. In case a temporary restraining order is granted without notice, the motion for an interlocutory injunction shall be set down for hearing at the earliest possible time and shall take precedence over all matters except older matters of the same character; when the motion comes on for hearing, the party who obtained the temporary restraining order shall proceed with the application for an interlocutory injunction; and, if he does not do so, the court shall dissolve the temporary restraining order. On two days' notice to the party who obtained the temporary restraining order without notice or on such shorter notice to that party as the court may prescribe, the adverse party may appear and move its dissolution or modification; and in that event the court shall proceed to hear and determine the motion as expeditiously as the ends of justice require.
(c) Security. As a prerequisite to the issuance of a restraining order or an interlocutory injunction, the court may require the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been enjoined or restrained wrongfully. A surety upon a bond or undertaking under this Code section submits himself to the jurisdiction of the court and irrevocably appoints the clerk of the court as his agent upon whom any papers affecting his liability on the bond or undertaking may be served. His liability may be enforced on motion without the necessity of an independent action. The motion and such notice of the motion as the court prescribes may be served on the clerk of the court, who shall forthwith mail copies to the persons giving the security if their addresses are known.
(d) Form and scope of injunction or restraining order. Every order granting an injunction and every restraining order shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; and is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive notice of the order by personal service or otherwise.
(e) When inapplicable. This Code section is not applicable to actions for divorce, alimony, separate maintenance, or custody of children. In such actions, the court may make prohibitive or mandatory orders, with or without notice or bond, and upon such terms and conditions as the court may deem just.


The TRO Standard in Georgia: To obtain a TRO under OCGA § 9-11-65, Plaintiffs must show that: 1) the imminent activities of the Defendants, unless stopped, will cause them immediate and irreparable harm, 2) that Plaintiffs have some legal action, whether at law or equity, concerning why the harm should be stayed, 3) that Plaintiffs can show that there is a substantial likelihood that they will prevail on the merits in a trial upon their claims and that 4) Plaintiffs claims are not mere law claims (which can be satisfied by a mere money judgment for damages or otherwise), but the immediate harm demands the plenary and equity power of the Court to maintain the status quo to stop the immediate harm pending the outcome of the legal proceedings.


OCGA § 9-15-14.


11 USC § 362.


While the Chapter 7 Trustee was reversed at the 11th Circuit, In Re: Hong Ju Kim, Debtor, 571 F.3rd 1342 (11th 2009) is a strong reminder that a Chapter 7 Trustee has “stong-arm” powers and substantial additional powers to challenge any lender activity he may deem inappropriate with regard to the debtor’s estate.


11 U.S.C. § 101(51B).


A borrower we represented recently settled substantial claim with a lender when our borrower threatened an Adversary Proceeding in a Chapter 11 setting. It was a multimillion dollar proposed foreclosure. The borrower had substantial “fraud” based claims against the lender (it was a private lender), but he did not believe that a Superior Court TRO action would be granted. When he confronted the lender with his ability file a SARE Chapter 11 and then immediately raise “fraud” claims in a bankruptcy Adversary Proceeding, the lender came to the table and negotiated a settlement. We are convinced that the lender agreed to negotiations because our borrower could raise the fraud claim pre-foreclosure in a bankruptcy Adversary Proceeding, whereas the lender thought that the borrower was only holding a tort based foreclosure card.


In such a tort, recovery of damages is allowed [only] to the holder of the equity of redemption. Kennedy v. Gwinnett Comm. Bank, 155 Ga.App. 327, 328-329(1), 270 S.E.2d 867 (1980). Tower Financial Services, Inc., et al. v. Smith, et al., 204 Ga.App. 910, 423 S.E.2d 257 (1992).


OCGA § 51-1-1 (Torts); see also, OCGA §§ 51-9-1 to 51-9-11 (Injuries to Real Property).


Boaz, et al. v. Latson, 260 Ga.App. 752, 757, 580 S.E.2d 572 (2003).


Be aware that a lender may unilaterally rescind a foreclosure in Georgia for thirty (30) days. OCGA § 9-13-172.1. [Rescission].
(a) As used in this Code section, 'eligible sale' means a judicial or nonjudicial sale that was conducted in the usual manner of a sheriff´s sale and that was rescinded by the seller within 30 days after the sale but before the deed or deed under power has been delivered to the purchaser.
(b) Upon recision of an eligible sale, the seller shall return to the purchaser, within five days of the recision, all bid funds paid by the purchaser.
(c) Where the eligible sale was rescinded due to an automatic stay pursuant to the filing of bankruptcy by a person with an interest in the property, the damages that may be awarded to the purchaser in any civil action shall be limited to the amount of the bid funds tendered at the sale.
(d) Where the eligible sale was rescinded due to:
(1) The statutory requirements for the sale not being fulfilled;
(2) The default leading to the sale being cured prior to the sale; or
(3) The plaintiff in execution and the defendant in execution having agreed prior to the sale to cancel the sale based upon an enforceable promise by the defendant to cure the default, the damages that may be awarded to the purchaser in any civil action shall be limited solely to the amount of the bid funds tendered at the sale plus interest on the funds at the rate of 18 percent annually, calculated daily. Notwithstanding any other provision of law, specific performance shall not be a remedy available under this Code section.
History. Added by 2003 Ga. Laws 173, § 1, eff. 7/1/


Roylston v. Bank of America, N.A. et al., 290 Ga.App. 556, 660 S.E.2d 412 (2008).


In a wrongful foreclosure action, an injured party may seek damages for mental anguish in addition to cancellation of the foreclosure. Clark v. West, 196 Ga.App. 456, 457, 395 S.E.2d 884 (1990). Blanton v. Wanda Duru, 247 Ga.App. 175, 543 S.E.2d 448 (2000).


OCGA § 9-15-14; OCGA § 13-6-11; OCGA § 51-7-80, et seq.


OCGA § 44-14-161.


OCGA § 9-11-30(b)(6). One of the difficulties of this civil practice act is that the hearing may occur before the 30 days granted under this subpoena run.


OCGA § 24-10-20. Subpoena For Attendance Of Witnesses - Form; Issuance; Subpoena In Blank
(a) Every subpoena shall be issued by the clerk under the seal of the court, shall state the name of the court and the title of the action, and shall command each person to whom it is directed to attend and give testimony at a time and place therein specified.
(b) The clerk shall issue a subpoena, or a subpoena for the production of documentary evidence, signed and sealed but otherwise in blank, to a party requesting it, who shall fill it in before service.

OCGA § 24-10-21. Subpoena For Attendance Of Witnesses - Attendance At Hearing Or Trial; Where Served
At the request of any party, subpoenas for attendance at a hearing or trial shall be issued by the clerk of the court in which the hearing or trial is held. A subpoena requiring the attendance of a witness at a hearing or trial may be served at any place within the state.

OCGA § 24-10-22. Subpoena For Production Of Documentary Evidence; Motion To Quash Or Modify; Denial On Condition
(a) A subpoena may also command the person to whom it is directed to produce the books, papers, documents, or tangible things designated therein.
(b) The court, upon written motion made promptly and in any event at or before the time specified in the subpoena for compliance therewith, may:
(1) Quash or modify the subpoena if it is unreasonable and oppressive; or
(2) Condition denial of the motion upon the advancement by the person in whose behalf the subpoena is issued of the reasonable cost of producing the books, papers, documents, or tangible things.

OCGA § 24-10-23. Service Of Subpoenas
A subpoena may be served by any sheriff, by his deputy, or by any other person not less than 18 years of age. Proof may be shown by return or certificate endorsed on a copy of the subpoena. Subpoenas may also be served by registered or certified mail or statutory overnight delivery, and the return receipt shall constitute prima-facie proof of service. Service upon a party may be made by serving his counsel of record.

OCGA § 24-10-24. Fees And Mileage; When Tender Required
The witness fee shall be $25.00 per diem, and execution shall be issued by the clerk upon affidavit of the witness to enforce payment thereof. The payment of fees shall not be demanded as a condition precedent to attendance; but, when a witness resides outside the county where the testimony is to be given, service of the subpoena, to be valid, must be accompanied by tender of the fee for one day's attendance plus mileage of 20¢ per mile for traveling expenses for going from and returning to his or her place of residence by the nearest practical route. Tender of fees and mileage may be made by United States currency, postal money order, cashier's check, certified check, or the check of an attorney or law firm. When the subpoena is issued on behalf of the state, or an officer, agency, or political subdivision thereof, or a defendant in a criminal case, fees and mileage need not be tendered.

OCGA § 24-10-25. Enforcement Of Subpoenas; Continuance; Secondary Evidence Of Books, Papers, Or Documents
(a) Subpoenas may be enforced by attachment for contempt and by a fine not exceeding $300.00 and imprisonment not exceeding 20 days.
In all cases under this Code section, the court shall consider whether under the circumstances of each case the subpoena was served within a reasonable time, but in any event not less than 24 hours prior to the time that appearance thereunder was required.
(b) The court may also in appropriate cases grant continuance of the cause. Where subpoenas were issued in blank, no continuance shall be granted because of failure to respond thereto when the party obtaining them fails to present to the clerk the name and address of the witness so subpoenaed at least six hours before appearance is required.
(c) When books, papers, or documents are unsuccessfully sought, secondary evidence thereof shall be admissible.

OCGA § 24-10-26. Notice To Produce
Where a party desires to compel production of books, writings, or other documents or tangible things in the possession, custody, or control of another party, in lieu of serving a subpoena under this article, the party desiring the production may serve a notice to produce upon counsel for the other party. Service may be perfected in accordance with Code Section 24-10-23, but no fees or mileage shall be allowed therefor. Such notices may be enforced in the manner prescribed by Code Section 24-10-25, and Code Section 24-10-22 shall also apply to such notices. The notice shall be in writing, signed by the party seeking production of the evidence, or his attorney, and shall be directed to the opposite party or his attorney.


Cartersville Developers, LLC v. Georgia Bank & Trust, LLC, 292 Ga.App. 375, 664 S.E2d 783 (2008).


OCGA § 24-9-66. See also, The Community Bank v. Handy Auto Parts, Inc., 173 Ga.App. 532, 327 S.E.2d 761 (1985).



Taylor said...

Would a request to "produce the note" ( should it go the atty. or Bank or both?) be sufficient to require the Bank Atty. to pull a notice of sale under power and stop the foreclosing sale until it is produced? How many days should I give the bank atty. to provide me notice of their decision?


Anonymous said...

Thank you for all your information Mr. Wood, you are really appreciated. My question is what is the GA statute of limitations for the lender to tranfer title to the new buyer after the foreclosure and if it is not changed over after that time passes, what actions can a borrower take?

Hugh Wood said...

Hmm. I don't think there is a Statute of Limitations, per se. There is a $ penalty for failure to record, but that is between the the State of Georgia and the entity that fails to record. Since "title" or seizen never fails or goes away, the holder would still be the holder - just not of record. Priority and other claims may jump ahead, but the title would still be in the holder just not recorded.

Anonymous said...

In light of the foreclosure fraud and wrongful foreclosures it seems that some foreclosers are failing to record the new owner 1, 2+ years later. Some homeowners are realizing this and wanting to fight for repossession. What are the possibilities for that in GA? The homeowners are also finding that they are still listed for tax,HOA and other bills associated with the property when they thought they were free of it. What can a newly foreclosed person do to protect themselves from this after? Thank you.

Real Estate Fanatic said...

Do you know what the statute of limitations is on "suit in equity to reform security deed?" When would the time limit start?

I own the 2nd lien on a property where the first mortgage filed the security deed improperly by leaving off a piece of property. Since I am the 2nd lien holder I am technically in the 1st position on the property they omitted but know that the first can come back and sue to reform the security deed.

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Anonymous said...

Is there any recourse after a confirmation hearing has taken place if you discover the appraiser may not have been qualified to appraise the property? The confirmation occurred a year ago. I just discovered the appraiser may not have been appropriately certified.

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