In Georgia, almost every mortgage lender will have the borrower sign a Security Deed at closing. Even though we commonly refer to the Security Deed as the Mortgage, it is different. Borrowing money to purchase a house requires both a Promissory Note and a Security Deed. The Promissory Note contains the terms of the loan and creates personal liability for the borrower to pay the loan back. The Security Deed puts the house up as collateral for the loan and is similar to a Deed of Trust that us commonly used in other states.
The Security Deed passes a portion of the title to the lender as security for the loan. The lender does not have any right to occupy or enter the property (except to inspect improvements if it is a construction loan). The main difference between a Mortgage and a Security Deed is how each one is enforced and foreclosed. The Security Deed in Georgia requires specific notices be sent to the borrower that include the specific default along with a publication of the foreclosure notice. Security Deeds do not require any judicial procedures, unless the lender seeks a deficiency judgment after the foreclosure. A Mortgage is still legal and enforceable in Georgia, but it would require a judicial process for the lender to foreclose on the real property. A Mortgage costs more and takes a lot longer to foreclose. As a result, almost every lender in Georgia uses the Security Deed, despite the fact that everyone still refers to it as the Mortgage.