|
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:
- 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.
- 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.
- 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.
To start working together as quickly as possible, please fill
out my New Client Information
Form. The information provided is completely confidential
and will not be shared with anyone.
For more information on my services, click
here.
|