State High Court: Georgia Lenders Have Right To Undo Foreclosure Sale After A Properly Conducted Public Auction Has Already Taken Place

Lexology reports:

• [A] lender can rescind a [Georgia] foreclosure, for among other reasons, the fact that it had entered into an agreement when the default was cured prior to the sale or the borrower had entered into an agreement to cure the default. (See OCGA 9-13-172.1.)
• What happens though if a lender actually conducts a foreclosure sale and then simply decides that it would rather sue on the note. Can it unwind the foreclosure even if its reasons for doing so do not fall with the statutory guidelines?
• The Georgia Supreme Court has decided that a lender may in fact rescind a properly conducted foreclosure sale for its own internal business reasons.(See Tampa Investment Group, Inc. v. BB&T, 2012 WL 933110 (Ga.).)

***

• On March 19, 2012, the Georgia Supreme Court found that a “sale under power of real estate at public outcry does not become binding as between the mortgagee and the purchaser unless a memorandum is made as prescribed by the Statute of Frauds.” The court went on to note that until a deed under power is transferred and consideration is passed, the sale itself has not occurred; there is only a contract to buy and sell. Under the circumstances the borrowers have not been harmed. They still hold the same rights as they held prior to the attempted sale.

For more, see Rescission of foreclosure sales in Georgia (may require subscription; if no subscription, GO HERE; or TRY HERE - then click the appropriate link).