When a borrower defaults in the payment of a commercial mortgage loan, the lender begins the commercial foreclosure process.  While most think of homeowners and residential properties when they hear the term “foreclosure,” it’s important to remember that commercial properties and businesses can also be involved in this process. Foreclosure is not really a rare occurrence in the Atlanta area, where many businesses find themselves facing foreclosure as the result of financial troubles which can even lead to bankruptcy. Foreclosures and the practices surrounding foreclosures have been in use since the start of mortgage lending and will continue to be with us for as long as lenders make loans to those who are buying properties or funding the construction of a new property. There are a number of laws in the state of Georgia to address commercial foreclosures; the same is true on a national level. Many are complex and quite detailed, and the process as a whole can be exceedingly complicated and overwhelming.

When lenders underwrite commercial loans, they evaluate their risk and the potential return, and they approve or decline a loan based on factors that include the borrower’s credit, the borrower’s ability to develop or operate the property in a profitable manner, the cash flows (actual or projected) from tenant leases of the property, the tenant’s credit, and the borrower’s cash equity in the property. Sufficient borrower equity offers a level of protection to the lender in the event of a default.

While loan underwriting has tightened in recent years, loans still fail, even in cases where a refinance or loan modification is granted to a borrower. Mortgage defaults continue, and so do commercial foreclosures. The state of Georgia allows for non-judicial commercial foreclosures. However, compliance with Georgia code is a must, and attention to detail can prevent legal delays in reaching a solution. Loan foreclosure attorneys can help both lenders and borrowers ensure that the foreclosure process is followed properly and that the particular documents necessary to preserve lenders’ and borrowers’ rights have been accurately composed, executed and recorded.

Financial institutions and borrowers must look to the loan documents, security deeds, and demand letters to ensure that the lender complies with the foreclosure process and also that the lender maintains the correct and complete documentation to assert its rights to foreclose.  In some instances, questions will arise regarding the proper collateral for a loan, the actual ownership of the property in question, and the assignment of loans to the institution desiring a foreclosure. Lawsuits, disputes and other obstacles can complicate the foreclosure process.

Both the lender and the borrower may need to review the closing documents from the original transaction, and both may need the assistance of an experienced Atlanta commercial foreclosure attorney at Hecht Walker, P.C. to review the closing documents from the original transaction should these questions arise. This step will help to prevent most bankers and borrowers from entering into perilous situations that could result in wrongful foreclosure litigation and improper takings of property.


Georgia is a non-judicial foreclosure state, which means the Georgia mortgage documents or deeds of trust that are signed at the time of a commercial loan have a clause that addresses the power of sale. What this means is that a lender or bank can exercise its rights to foreclose without the courts being involved. The lender is required, however, to publish a notice of sale and to serve the mortgagee with a 15-day notice informing the mortgagee of the sale.

The Atlanta commercial foreclosure attorneys at Hecht Walker, P.C. understand the commercial foreclosure process as well as the importance of the documents that must be filed with the foreclosure suits. Memorialization is a must, and any detail that is not addressed in writing could pose a legal problem for either party. When that happens, a wrongful foreclosure may be filed. Listed here are a few of the mandatory requirements for public notices, which are most often published in local newspapers:

  • The sale of the property must be advertised each week for four consecutive weeks in the county where the real estate is located.
  • The advertisement must list the name of every individual in possession of the property.
  • The name of the grantor must be included in the advertisement.
  • The advertisement must list the owner of the property (if it differs from the grantor).
  • The advertisement must include the name, address, and telephone number of any party who has authority to negotiate, amend, or modify the terms of the mortgage.
  • The time and place of the sale must be included in the advertisement.
  • The advertisement must reference the lender’s right to sell the property.

At any time during the commercial foreclosure process, questions may arise regarding the actual ownership of the property or the assignment of loans to the institution requesting the foreclosure proceedings. When such questions arise they will require a detailed review of the loan documents, security deeds, demand letters, and the original closing documents to demonstrate compliance with the Georgia laws governing the foreclosure process.


Following a default, lenders may choose and initiate a legal action and drive it to a conclusion. Choosing the best option requires lenders to balance factors such as efficiency, cost, and risk. Borrowers react to the actions of lenders. Although borrower options are limited, some situations, such as deeds in lieu of foreclosure, give borrowers and their lawyers more leverage to negotiate a better result.

The foreclosure process is only the first step if a lender is seeking the recovery of funds borrowed for the purchase of a property. A specific legal process must be adhered to after the foreclosure has been addressed. Let an experienced Atlanta commercial foreclosure attorney with Hecht Walker provide the legal advice, insights, and services that you’ll need. We represent borrowers and lenders in the metro Atlanta area and throughout the state of Georgia.


A deficiency judgment is a judgment against a borrower whose foreclosure sale did not cover the amount owed. The deficiency judgment is unsecured and requires cash to satisfy the deficiency. If the property was sold at fair market value but fell short in satisfying the loan in its entirety, a lender can and likely will seek remedies. This process is called commercial foreclosure confirmation. An experienced and qualified commercial Atlanta real estate attorney can help you maneuver this complex area of the law.

If a Georgia court issues a deficiency judgment, any outstanding balance owed by the borrower after the foreclosure sale remains the personal responsibility of the borrower. The Georgia court will order the borrower to pay the outstanding balance. If payment is not made, or if there is a refusal to pay, other legal remedies may be available to persuade the borrower to honor the obligation.

If you’re facing troubles with a commercial foreclosure, business matters such as a breach of contract or lawsuit, or require help with a civil action related to your company, contact the business and commercial foreclosure attorneys at Hecht Walker, P.C. Call 404-369-3073.


This information was posted on 08-31-2016 and does not constitute legal advice nor does it create an attorney-client relationship. The law changes on a daily basis and the reader should engage an attorney through a written agreement before taking action in this area of the law.