Owner's Affidavit
(Deed in Lieu of Foreclosure) (Commercial) (GA)

Summary

This owner's affidavit template is for use in Georgia when title to real property is transferred by a defaulting borrower to a secured lender via a deed in lieu of foreclosure. This template includes practical guidance and drafting notes. Any interest in real property that is capable of being transferred may serve as the security for a mortgage or deed to secure debt. In Georgia, either a mortgage or deed to secure debt may be used to create consensual liens on real property. Because deeds to secure debt are distinct from mortgages in Georgia, the form of the security instrument should clearly identify whether the mortgagee has title to the property or only a lien. The deed to secure debt is the most widely used device for securing real property in Georgia. The vast majority of foreclosures in Georgia are governed by power of sale provisions set forth in the applicable loan documents, which in turn are governed by nonjudicial sale requirements. Nonjudicial sales do not involve court proceedings; however, if a deficiency judgment is sought (i.e., the sale of the property does not extinguish the debt), then court proceedings are instituted. The rarely used judicial foreclosure of mortgages is governed by the provisions of O.C.G.A. § 44-14-180 et seq., while the equally rare judicial foreclosure on security deeds is governed by the provisions of O.C.G.A. § 44-14-210 et seq. Enforcement of the rights contained in trust deeds is governed by the provisions of O.C.G.A. § 44-14-120 et seq. but is not technically defined as a "foreclosure" under the Georgia code. The lender and its counsel should be careful to understand and comply with all the statutory requirements when foreclosing on real property. A quicker and less expensive—albeit riskier—method for a lender to take title to the real property is through the negotiated process of a deed in lieu of foreclosure transaction whereby title to real property is transferred by a defaulting borrower to a secured lender via a deed in lieu of foreclosure. This template contains representations customarily required by Georgia lenders and title insurance companies as a condition of issuing the final title policy in a typical purchase and sale transaction, as well as additional representations required for a deed in lieu of foreclosure transaction. For a full listing of key content covering commercial real estate acquisition financing transactions and Georgia property transfers, see Commercial Real Estate Acquisition Loan Resource Kit and Purchasing and Selling Commercial Real Estate Resource Kit (GA). For a full listing of key content covering commercial mortgage foreclosures, see Commercial Foreclosure Resource Kit (National and Select States). For further guidance on lender remedies Georgia, see Commercial Real Estate Financing (GA). For guidance on commercial loan workouts, see Workouts of Commercial Real Estate Loans.