Foreclosure is the process by which a lender is able to take back property that is secured by a loan in default. Georgia is a very "lender-friendly" state. Lenders are able to take action very quickly and Georgia laws provide very limited protection for individuals along the way. Because Georgia foreclosures are "non-judicial", meaning that foreclosure can be conducted without a court order, the foreclosure process in our state are among the fastest in the country.

Step 1: Lender alerts the borrower of foreclosure with a "Notice of Default"

After enough payments have been missed to cause the lender to consider the loan in default, the lender must send a letter to the borrower stating that the borrower is in breach of contract. The lender requests that the loan either be paid off or that it be reinstated by making the back payments and bringing the balance current. The borrower is given 30 days to pay off or reinstate the loan.

Step 2: Lender advertises a "Notice of Sale Under Power" in the legal newspaper

If no action is taken during the 30-day reinstatement period, the lender is required to place a "Notice of Sale Under Power" listing in the legal newspaper of the county in which the property resides. The listing provides the borrower's name, the address of the property in question, and the details of the loan. The listing states that the property will be sold at public auction on the county courthouse steps on the first Tuesday of the month following the listing. The listing is required to run for four consecutive weeks prior to the auction.

Step 3: The property is sold at public auction

If the loan is not reinstated or paid off during the 4-week advertising period, the property goes to auction. Potential buyers arrive at the courthouse steps on the date of the auction and the sale is conducted. The property is sold to the highest bidder, and the deed can be issued immediately to the buyer by the lender's attorney. If no one bids on the property, it is taken back by the lender and is listed with a real estate agent for sale. Foreclosure sales in Georgia are final - there is no "right of redemption" or redemption period as exists in other states. The title to the property is transferred immediately and the previous owners must vacate the property of face eviction.

Frequently Asked Questions regarding foreclosure:

If my property sells at auction, at least the debt will be wiped out, and I'll be able to put it behind me, right?

Not necessarily. When property is sold at auction, the primary lien and any junior liens (secondary mortgages) are wiped out. However, in Georgia the lender(s) can still file for a deficiency judgment against the borrower to try to recoup any losses associated with the sale, the missed back payments, or the legal fees associated the foreclosure. In some states, lenders can sue or garnish a former borrower's wages in an attempt to recover the deficient amount.

If I file for bankruptcy, that will stop the foreclosure, right?

No. While bankruptcy can delay foreclosure proceedings for a brief period, it cannot stop the foreclosure for long. Soon after bankruptcy has been filed, the lender will request of the bankruptcy court to force the sale of the property. There are very few circumstances under which the court will deny this request, and the foreclosure will resume. When this happens, the borrower will have both bankruptcy and foreclosure recorded on their credit record.

What are my options to stop foreclosure?

Fortunately, there are a number of ways to stop the foreclosure process before

• Reinstate the loan. To reinstate, lenders generally require that the borrower make up all late payments as well as pay all legal fees incurred due to the foreclosure. This is the quickest and most straightforward means of halting foreclosure.

• Refinance the loan. One way to pay off the loan in default is to find another party willing to lend you money to pay off the original loan as well as back payments and legal fees as required. It is very difficult for a borrower in default to qualify for another loan, and generally applications for financing by parties in foreclosure are denied.

• Sell the property. If the property is sold before the foreclosure is complete, then the loan and back payments can be paid off with the proceeds of the sale. There are, however, significant issues with selling using the traditional methods during foreclosure:
  1. Time - even in a hot real estate market like Atlanta, houses typically take 60 -180 days to sell using traditional methods. The foreclosure process in Georgia simply does not allow enough time to sell using this method.
  2. Real estate commissions - real estate agents typically charge between 6 - 7% of the sale price of the home. Paying these commissions can make it challenging to also pay off the loan balance and back payments and fees.
  3. Repairs - to sell a house quickly, it must be in perfect condition. There are lots of houses out there, and any cosmetic, structural, or systems-related issue with your house will cause potential buyers to pass it up. Sellers who require a quick sale typically spend $3000 - $5000 in repairs and fix-up costs prior to listing.

• Work with me to develop a tailored solution. Based on the specifics of your situation, we can use a number methods to stop your foreclosure. I could reinstate your loan, take over your payments, lease your house from you, or buy your house for cash. In some cases, I can even negotiate a "short-sale" with your lender to payoff your loan for less than you owe.

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Novare Ventures, LLC can not offer Legal or Accounting advice. This information on this page is believed to be correct, but no warranty is implied. Please contact your Lawyer or Accountant for legal or accounting advise or contact us for a good referral.