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New Development in Georgia Law: Lenders, bankers, and special assets groups must read!


    On November 18, 2013, a development in Georgia law occurred that lenders, bankers and special assets groups should know about. That is, recently in a case called HWA Properties, Inc. v. C&S Bank, 2013 WL 3498088 (Ga. App. July 15, 2013), the Georgia Court of Appeals held that the all encompassing waivers in the Guaranty at issue in that case were sufficient so as to waive any requirement for confirmation of a foreclosure sale before bringing suit against the guarantor    

    After the Court of Appeals decision was rendered, HWA Properties sought a writ of certiorari to the Georgia Supreme Court to try to get the Court of Appeals' decision reversed.  On November 18, 2013, the Georgia Supreme Court denied the petition for writ of certiorari, and thus, the Court of Appeals decision stands.
    The previously long held law was that if a lender foreclosed on real estatethe lender had to confirm the foreclosure sale in a separate proceeding within a specific amount of time to be able to later sue the guarantors for any deficiency. Thus, if the lender missed the time to file the confirmation proceeding or if a Court denied confirmationthe lender was out of luck for recovery against the guarantors.
    Thus, the effect of broad waiver language in loan documents could change our real estate creditors' rights worldmay allow lenders to  sue on guarantees even though no confirmation proceeding was brought after foreclosure if the waivers in the guarantees are good enough, and should likely effect language that lenders in Georgia will want to put in new or modified loans.

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