GEORGIA

The 2011 Georgia legislative session ended April 14, and although there was a lot of buzz around several bills relating to the default servicing industry only one of them actually passed this session.  The bills that did not make it through in 2011 are not dead, however, since all legislation that did not pass this session is available for consideration during the 2012 legislative session. 

SB 64 was passed into law and will become effective July 1, 2011.  This law amends O.C.G.A. 14-5-7 relating to execution of instruments effecting real property by corporations.  For deeds of conveyance or mortgages, execution by the (1) president or vice-president and the (2) secretary or assistant secretary is acceptable.  When executing a release or assignment, the corporate president, vice-president, secretary or assistant secretary must sign the instrument.  The statue allows the corporation to alter the officers who can sign through a corporate resolution.  The resolution must be attached as an exhibit to the instrument filed for record and referenced on the face of the instrument. 

We reported on the new DeKalb County Vacant Property Registration Ordinance in a prior newsletter, and subsequently, the cities of Power Springs, Loganville, and Lawrenceville as well as Fulton, Gwinnett, and Rockdale Counties have either passed or considered similar vacant property ordinances.   House Bill 110 was introduced to establish a statewide vacant property registration framework which would preempt these local ordinances.  HB 110 includes property held pursuant to judicial or non-judicial foreclosure or a deed in lieu of foreclosure in the definition of vacant property.  Registrations of vacant property must include the property address, parcel number, owner's name and contact information, the agent's name and contact information, date and/or recording information of instrument transferring ownership to owner, and a registration fee not to exceed $100.00.  If this registration information is included in the Deed Under Power or Deed In Lieu and the deed is recorded within 60 days of sale, the first registration and fee is not required.  HB 110 would require a second registration upon the first subsequent transfer of vacant property after foreclosure.  Penalties under the bill would not exceed $500.00 per month.  This bill was passed in the House on March 10, 2011 and gained a lot of traction in the Senate.  Insiders thought it would easily become law; however, disagreement as to the registration fee and penalties ultimately delayed passage.  There is a good chance that some form of HB 110 will be passed in the 2012 session.  

House Bill 237 gives District Attorneys and the State Attorney General certain investigative and subpoena powers relating to residential mortgage fraud.  HB 237 amends the definition of "mortgage lending process" to include the execution of Deeds Under Power that are recorded pursuant to foreclosure laws and the execution of assignments that are required to be recorded prior to foreclosure sale.  HB 237 was supported by the newly elected State Attorney General, Sam Oleans, and it slid through the House on March 2, 2011, with only one vote in opposition. The Senate judiciary committee reported favorably on the bill at the end of March and insiders opined that the legislation would easily become law.  Because HB 237 was tied to another unrelated bill, a filibuster ultimately killed it on the last day of the 2011 regular session.  It is very likely that this bill will be re-examined in the 2012 legislative session.  

TENNESSEE:

House Bill 1921 / Senate Bill 1451was signed into law by the Governor on April 25, 2011 and this new law changes the requirements surrounding the relatively new 60 day Notice of Intent to Foreclose requirements.  Enacted by into law by the legislature last year,the 60 day notice rule requires a Notice of Intent to Foreclose be sent to the borrower 60 days prior to the first legal publication.  Under the new law, effective immediately, the 60 day notice requirement is removed if the lender or trustee meets with the borrower in person 180 days prior to foreclosure publication to review the loan and discuss foreclosure issues.    It is no longer necessary to include a statement regarding the Notice of Intent to Foreclose in the Notice of Sale; however, the requirement that the statement be included in the foreclosure deed is still present.  Much to our surprise, the legislature put an end to the Notice of Intent to Foreclose altogether beginning January 2013.  Specifically, the notice will no longer be necessary for foreclosures where the first publication is on or after January 1, 2013.  With the 60 day notice requirement eliminated in 2013, the foreclosure referral to sale date timeframes will significantly decrease from approximately 90 days to 45-30 days.

HB 1920 / SB 1299 was signed by the Governor on June 16, 2011 and is effective July 1, 2011. The bill was originally introduced with a provision to decrease the number of foreclosure publications from three times to only one time and was later amended to require two publications.  This provision received a lot of heat from the local newspapers who predicated that their revenue streams would decrease and ultimately the publication language was removed before the bill's final passage in the House and Senate.  Aside from attempting to change the number of publications, the bill affects two other areas of foreclosure in Tennessee.  While case law suggested, and title companies agreed, that sale postponements were ok in Tennessee if not prohibited by the Deed of Trust; this new law actually codifies postponements under the following terms.  Unless postponements are prohibited under the Deed of Trust, a foreclosure sale may be postponed one or more times without additional newspaper publication.  The caveat is that the sale must be held within one year of the original sale date and each postponement must be announced at the date, time and location of each scheduled sale date.  In addition, if the postponement is for more than thirty days, notice of the new sale date must be mailed to the borrower no less than ten calendar days prior to the sale date.  The new law also revises the contents of the foreclosure advertisement.   Under the old law, the notice had to describe the land in "brief terms" along with the street address, if available.  Under the new law, the advertisement must contain a "concise legal description", which could be a reference to the deed book and page of the Deed of Trust that contains the complete legal description.  A common description must also be present, which means a street address and map and parcel number of the property, if available.  If a street address is not available, a subdivision, lot or tract number may be used.  The intent of this amendment is to prevent an error in the legal description from voiding a foreclosure sale.