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Foreclosure (Alabama/Florida/Georgia)

Last Reviewed: May 2023

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

Print State Considerations (Alabama)

Foreclosure: State Considerations (Alabama)

Alabama has two methods of foreclosure for mortgages and land contracts: Judicial Foreclosure and Foreclosure by Advertisement. Preliminarily a party should order a title commitment policy prior to commencing a foreclosure action to ensure the position of the interest and to determine any tax issues or clouds on title.

Sale by Judicial Action

A judicial foreclosure permits the mortgagee to resolve any conflicting claims concerning the mortgage if subsequent lienholders claim priority or contest other issues. The moving party initiates the process by filing a complaint to foreclose a mortgage asserting a default in the payment of the promissory note, the remedy of which is the foreclosure of the property. After service of process of the borrower the final step requires the attorney for the holder seeking an order authorizing sale. No less than fourteen days before the date set for the hearing, the holder or under this section for a residential property shall cause a notice of hearing to be posted in a conspicuous place on the property that is the subject of the sale. Unless an answer is filed and after satisfying all the requirements, a Judgment and Order authorizing the sale may be entered.

Sale by Advertisement

Notice of Sale

In a non-judicial sale the lender must cause notice to be given by publishing the time, place, terms of sale, and description of the property in a newspaper of general circulation within the county where the property is located once a week for a period of three consecutive weeks. Even if the mortgage does not contain a power of sale clause they lender may sell the property for cash at the courthouse door of the county where the property is situated, to the highest bidder, after notice of the time, place, terms, and purpose of such sale has been given by four consecutive weekly insertions of such notice in some newspaper published in the county where the property is located.

Federal and State Tax Liens

Federal tax liens filed after the mortgage is recorded requires that special notice be given to the IRS before a foreclosure can extinguish a tax lien. To extinguish a federal lien, the notice of sale must be sent no more than 20 days before the foreclosure sale. The IRS must be served via personal service or certified mail at least 25 days before the sale. IRC 7425(c)(1). If the lien is recorded within 30 days of the sale, the lien has no effect and may be extinguished pursuant to local law. IRC 7425(b)(2).

Redemption

The redemption period in Alabama is 180 days for residential property that qualifies as a homestead, and 1 year for non-homestead and commercial property. The 180 day redemption period ONLY applies to mortgages made after January 1, 2016. For mortgages made prior to January 1, 2016, the right of redemption is one year. The Borrower’s right to redeem is forfeited if they do not vacate the property within 10 days, upon demand, after the foreclosure.

Post Sale Recovery

The lender has the option to file a suit for deficiency in Alabama. This is a separate suit from the foreclosure suit.

Print State Considerations (Florida)

Foreclosure: State Considerations (Florida)

Florida has one method of foreclosure for mortgages and land contracts: Judicial Foreclosure. Preliminarily a party should order a title commitment policy prior to commencing a foreclosure action to ensure the position of the interest and to determine any tax issues or clouds on title.

Sale by Judicial Action
A judicial foreclosure permits the mortgagee to resolve any conflicting claims concerning the mortgage if subsequent lienholders claim priority or contest other issues. The moving party initiates the process by filing a complaint to foreclose a mortgage asserting a default in the payment of the promissory note, the remedy of which is the foreclosure of the property. The complaint must contain affirmative allegations expressly made by the plaintiff at the time the proceeding is commenced that the plaintiff is the holder of the original note secured by the mortgage; or allege with specificity the factual basis by which the plaintiff is a person entitled to enforce the note.

If a plaintiff has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, the complaint shall describe the authority of the plaintiff and identify, with specificity, the document that grants the plaintiff the authority to act on behalf of the person entitled to enforce the note. If the plaintiff is in possession of the original promissory note, the plaintiff must file under penalty of perjury a certification with the court, contemporaneously with the filing of the complaint for foreclosure, that the plaintiff is in possession of the original promissory note. The certification must set forth the location of the note, the name and title of the individual giving the certification, the name of the person who personally verified such possession, and the time and date on which the possession was verified.

Federal and State Tax Liens
Federal tax liens filed after the mortgage is recorded requires that special notice be given to the IRS before a foreclosure can extinguish a tax lien. To extinguish a federal lien, the notice of sale must be sent no more than 20 days before the foreclosure sale. The IRS must be served via personal service or certified mail at least 25 days before the sale. IRC 7425(c)(1). If the lien is recorded within 30 days of the sale, the lien has no effect and may be extinguished pursuant to local law. IRC 7425(b)(2).

The complaint must be served on the Attorney General of the State of Florida as a party to the original proceedings to address any State liens.

Notice
If a publication is required then it must be published in a newspaper that has been entered as a periodical matter at a post office in the county in which the newspaper is published, is published a minimum of 5 days a week and has been in existence and published a minimum of 5 days a week, exclusive of legal holidays, for 1 year.

Sale
The real estate shall be sold at a sale no sooner than 20 days and no longer than 35 days after a judgment is entered. After the sale and entry of a final judgment there is no right of redemption.

Post Sale Recovery
The Court has the discretion to award a deficiency. The amount of the deficiency may not exceed the difference between the judgment amount, or in the case of a short sale, the outstanding debt, and the fair market value of the property on the date of sale. In uncontested mortgage foreclosure proceedings in which the mortgagee waives the right to recoup any deficiency judgment, the court shall enter final judgment within 90 days from the date of the close of pleadings. If contested the attorney fees cannot exceed 3 percent of the principal amount owed at the time of filing the complaint

Print State Considerations (Georgia)

Foreclosure: State Considerations (Georgia)

Foreclosures

Georgia is a “non-judicial foreclosure” state. A lender can foreclose on real property without filing suit or appearing in court before a judge. The procedures for foreclosures are referenced in Code Section 44-14-162 through 44-14-162.4. Preliminarily a party should order a title commitment policy prior to commencing a foreclosure action to ensure the position of the interest and to determine any tax issues or clouds on title. The attorney should send a demand letter for payment within 10 days in order to preserve attorney fees in the foreclosure process.

Sales made on foreclosure under power of sale (Code Section 44-14-162.2)

In a non-judicial sale, the lender must provide written notice of default and a sale to the borrower via registered or certified mail, return receipt requested, to the property address or to such other address as the debtor may designate by written notice to the lender, at least 30 days prior to the sale date. The notice must include the name, address and telephone number of the lender having the full authority to negotiate the mortgage with the debtor. In addition, the lender shall cause a copy of the notice of sale to be published in a county newspaper in which the property is located for four consecutive weeks before the sale. If the notice contains the street address, city and zip code of the property, such information must be in bold type. The borrower must also receive by certified mail notice at least fifteen (15) days before the date of the proposed sale.

Federal and State Tax Liens

Sale

There is no statutory right to reinstate after default, but the contract or the lender may allow the default to be cured any time prior to the sale. The lender conducts the sale in the county in which the property is located. Once the sale is complete, the proceeds will go to the pay for the expenses of the foreclosure sale, then toward the obligations secured by the trust deed that was foreclosed and then to junior lien holders in order of their priority. The original borrower is entitled to receive any remaining funds. The successful bidder receives a lender’s deed. The property shall transfer to the successful bidder immediately if the deed is recorded within 15 days after the sale takes place.

Redemption

There is no redemption after the sale of the property.

Post-Sale Recovery

Generally, a party may seek a deficiency amount from the sale after a complaint is filed to determine the amount.

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