Understanding the foreclosure process in is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in
Foreclosure can be a daunting and overwhelming experience for homeowners in Georgia. Understanding the foreclosure process is crucial for anyone facing this situation. This article provides an overview of the foreclosure process in Georgia, including key steps, timelines, and options available to homeowners.
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.
Foreclosure is no fun. But just know that it’s not the end of the world.
When you know how foreclosure in works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
1. Pre-Foreclosure Period:
The foreclosure process in Georgia typically begins when a homeowner falls behind on their mortgage payments. During this pre-foreclosure period, the lender will send the homeowner a notice of default, notifying them of the missed payments and the intent to proceed with the foreclosure process if the default is not rectified. This notice must be sent at least 30 days before the foreclosure sale.
2. Notice of Sale:
If the default is not cured within the given timeframe, the lender will file a Notice of Sale with the county court clerk. This notice is then published in the county’s legal newspaper for four consecutive weeks, with the last publication being at least 30 days before the scheduled sale date. Additionally, the lender is required to post the notice in a conspicuous place at the courthouse.
3. Foreclosure Auction:
The foreclosure sale is conducted as an auction at the county courthouse, typically on the first Tuesday of the month. The property is sold to the highest bidder, usually the lender, with the opening bid being the outstanding loan amount plus any fees and expenses. The successful bidder receives a deed to the property and becomes the new owner.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (678) 404-9161 or through our contact page to have us walk you through the specific foreclosure process here locally in Atlanta and Nationwide.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure)(Georgia):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Marcus Costen to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Facing Foreclosure: Options and Resources
Dealing with foreclosure can feel overwhelming, but homeowners in Georgia have several options and resources available to help them navigate this difficult situation:
1. Loan Modification: Homeowners can work with their lender to modify the terms of their mortgage, making it more affordable and allowing them to catch up on missed payments.
2. Short Sale: If selling the property is necessary, homeowners can explore the possibility of a short sale, where the lender agrees to accept less than the full amount owed on the mortgage.
3. Deed in Lieu of Foreclosure: In some cases, homeowners may be able to voluntarily transfer ownership of the property to the lender, avoiding foreclosure altogether. This option requires negotiation with the lender.
4. Foreclosure Prevention Counseling: Nonprofit housing counseling agencies, such as the Georgia Department of Community Affairs and the Atlanta Legal Aid Society, offer free or low-cost foreclosure prevention counseling services to homeowners in need of assistance.
5. Legal Representation: It is advisable for homeowners facing foreclosure to seek legal representation. An attorney experienced in foreclosure law can provide guidance, protect their rights, and explore all available options.
It is essential for homeowners to proactively address their financial difficulties and explore options as soon as possible to increase the likelihood of a positive resolution. Time is often of the essence in foreclosure cases, and acting promptly can make a significant difference in the outcome.
In conclusion, understanding the foreclosure process in Georgia is crucial for homeowners facing this difficult situation. By familiarizing themselves with the key steps, timelines, and available options, homeowners can make informed decisions and seek the necessary help to navigate the foreclosure process successfully. Remember, seeking professional advice and exploring all available resources is vital in these challenging times.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
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