Foreclosure in Georgia

Foreclosure in Georgia : What Homeowners Need to Know

When a property is foreclosed on in Georgia, it will go through a foreclosure process. This involves the sale of the property at a public auction to recover the outstanding debt owed to the lender. Georgia, being a non-judicial foreclosure state, allows lenders to initiate and complete the foreclosure process without court intervention unless specified in loan documents.

Facing Foreclosure, Understand Your Rights

First off, you have the right to be informed. You have the right to know who owns your loan and  the debt details can be validated. Your lender must also provide you with clear information about the foreclosure process they are taking. There are guidelines and timescales they must follow.

You also have the right to explore alternatives, like loan modifications or short sales which can help you avoid losing your home. You should be taking to your banks about what options they have available for you.

Another important right is the chance to catch up on missed payments before the foreclosure is finalized. This is called the ‘right to reinstate’ and it can be a real lifesaver if you can gather the necessary funds.

Georgia foreclosure laws allow you the right to contest the foreclosure in court if you believe there’s been mistake or if you haven’t been treated fairly. It’s crucial to act quickly though as time is not on your side in these situations.

Steps in the Georgia Foreclosure Process

1. Loan Documents and Security Deed

Your loan documents include a security deed containing a power of sale clause. This allows lenders to accelerate the debt if payments are missed.

2. Notice of Default

After 60-90 days of missed mortgage payments, the lender may issue a Notice of Default, requiring payment of past-due amounts, including fees and charges.

3. Notice of Intent to Foreclose

If the default isn’t cured within the timeframe, the lender sends a Notice of Intent to Foreclose to the borrower. This notice must be filed with the local county and sent 30 days before the foreclosure sale.

4. Legal Publication

Foreclosure in Georgia sales are advertised in an official legal newspaper for four consecutive weeks, including details including the legal description of the property and auction date.

5. Foreclosure Auction

Auctions are held on the first Tuesday of every month at the local county courthouse of the property concerned. The property is sold to the highest bidder or retained by the lender.

Frequently Asked Questions to Avoid or Stop Foreclosure:

What is Pre-Foreclosure?

Pre-foreclosure is the initial stage of the foreclosure process. It begins when a homeowner misses mortgage payments but has not yet received a formal foreclosure notice. This period allows homeowners to explore options like loan modifications, repayment plans, selling their home, or other foreclosure avoidance measures. This is often the best time to stop or avoid foreclosure.

What is Foreclosure?

Foreclosure is a legal process where a lender takes ownership of a property after a homeowner fails to meet mortgage obligations. Foreclosure in Georgia is non-judicial which means the lender can foreclose on your home without filing suit or appearing in court before a judge. When completed the property is sold to repay the lenders debt at a foreclosure auction held on the first Tuesday of every month at the relevant county courthouse steps.

What happens when you miss mortgage payments, how many payment can I miss before foreclosure?

If you miss payments, your lender will initially send reminders. It varies by lender but typically if you have missed 2 to 3 months mortgage payments the lender will issue a Notice of Default which is a written notice informing you of the missed payments. If the default is not resolved they issue a Notice of Sale in local legal papers. Notice of Intent to Foreclose issued 30 days prior to the Foreclosure Sale, which is when the property is auctioned to the highest bidder at the county courthouse. 

What is a Notice of Intent to Foreclose?

This is a formal notice sent by your lender indicating that foreclosure proceedings will begin unless the overdue mortgage payments are not paid or resolved but some other means. In Georgia, lenders must send this notice at least 30 days before initiating a foreclosure sale.

How long does the pre-foreclosure process last?

The pre-foreclosure period can vary but often lasts several months. During this time, homeowners can negotiate with their lender, explore loss mitigation options, or sell the property.

Timeline of a Georgia Foreclosure:

Day 1-15               Missed mortgage payments

Day 16-30            Late Fees applied

Day 31-60            Loan considered delinquent

Day 61-90            Foreclosure proceedings begin

Day 91-120          Notice of Sale (published 4 weeks) + Notice of Intent to Foreclose

Day 121+              Foreclosure sale takes place

Who holds my mortgage and what is a loan servicer?

It is common for banks to buy and sell home loans to other banks or institutional investors. You have the right under federal law to know who owns your loan and may request this information. A loan servicer is a company hired by the lender to handle the day-to-day communication with homeowners and keeping track of payments, escrow accounts, insurance, property tax etc. To make things more confusing some of the largest loan servicers are also banks. This frequent changing of lenders can lead to mortgage service errors, so check that your statements are correct.   

What is Loss Mitigation?

It’s the process where a lender works with a borrower to avoid foreclosure. The lender’s goal is to reduce their investment loss, the borrower’s goal should be to avoid foreclosure by keeping the property a repayment rate they can afford, or sell the property at a price and time acceptable to them.

How to Avoid Foreclosure or Stop Foreclosure?

Talk to Your Lender’s Loss Mitigation Department.  Your lender will evaluate whether your financial hardship is temporary or permanent. The following options then could or should be considered:

 Temporary Indulgence

This is a grace period (usually 30 to 60 days) that may be granted to help bring a mortgage current.  You will need to demonstrate evidence that warrants the grace period and your ability to catch up payments once it is over. It is considered when you have a contract of sale and a closing date verified, an insurance settlement confirmed, or pending approved other funding such as refinancing. 

Loan Modification / Mortgage Modification

This is negotiating with your current lender to change the terms of your current loan. Options to be considered include Conventional Loan Modifications (interest rate and term changes up to 40 years), FHA Loan Modifications (some interest free and late payment consolidation), VA Loan Modifications (rolling missed payments into loan balance), USDA Loan Modification (mortgage recovery advance to bring mortgage current ).

While qualification requirements vary by program, general qualifications include:  

• Demonstrating Financial Hardship (job loss, medical expenses, divorce or separation, natural disasters).
• Current Financial Situation (proof of income, expenses, bank statements, DTI debt-to-income-ratio)
• Delinquency or Risk of Default (behind on payments or immanent risk of default)
• Property Requirement (primary residence)
• Loan History (12 months old and limits on previous modifications)

Loan modification typically look to adjust the conditions of your mortgage possibly to lower your monthly payments often by extending the repayment term and/or reducing the interest rate. The challenge with this is interest rates can rise, so modified payment may be higher and more expensive than the original mortgage. Also many loan modifications are denied as approval is not automatic and the foreclosure process doesn’t stop during the review.  So be careful just because you apply doesn’t mean it’s going to be approved.

Refinance

Refinancing to secure a new loan with while in pre-foreclosure is generally difficult but not impossible. Challenges include your credit score, missed payment history, lender hesitation, timing. Possible options to consider include:

• Cash-Out Refinance – allows you to replace your current mortgage with a new larger loan and use the difference to pay off your outstanding debt
• Rate -and-Term Refinance – replace your existing mortgage with a new one at a different rate and term length.
• Home Equity Loan or Home Equity Line of Credit (HELOC) – borrow against your home’s equity

To qualify you will normally need 20% equity in your home, a credit score of 620 or higher and a debt-to-income ratio of 43% or less. Be careful the terms of a refinance are not worse than your current loan. 

(We recommend you consult with a qualified financial advisor if considering refinance)

Forbearance

Forbearance allows you to temporarily pause or reduce payments due to financial hardship. Keep in mind, however, that interest will continue to accrue, and you’ll need to repay missed amounts, potentially in a lump sum. This is a short-term solution that may help temporary hardship. You may qualify if you have recently experienced a reduction of income or an increase of living expenses. Military homeowners in particular may find this useful, see terms granted under the terms of the Service-members Civil Relief Act.

The governments covid pandemic forbearance program has now come to an end. 

Short Sale

A short sale lets you sell your property for less than what is owed on your mortgage, with your lender’s approval. An important point is to agree a Deficiency Waver with the lender to ensure your full debt is paid off. You may qualify for a property short sale if the loan is at least 30 days delinquent and an appraisal (that your lender will obtain) shows that the value of your home is less than the mortgage amount. This will prevent foreclosure and minimize damage to your credit. Although the process can be complex, we can guide you through it supported by our experienced negotiators.

We can help you with short sales.

Deed in Lieu of Foreclosure

This option involves transferring ownership of your home to the lender to settle your debt. While it avoids a formal foreclosure, it results in the loss of your property, loss of equity and affects your credit. It’s typically less damaging than a foreclosure and may allow you to move forward sooner but not typically the preferred option.

Selling Your Property

Sell your property and rightsizing to a more affordable home may allow you to stop foreclosure or avoid foreclosure, pay off your debts, and preserve your credit.

Acting early is key to maximizing this opportunity. When you have the time we recommend a traditional sale to maximize your equity, this would involve listing your property with a real estate agent.  If there is no equity consider a short sale.  We work with real estate agents experienced and skilled in foreclosure and short sales. If you have very little time consider a cash “as-is” sale which means no finance contingency and no repairs. We buy houses for cash, we pay all normal closing costs, we offer clear out and cleaning services and we buy “as-is”.

Timing that is compliant with bank requirements and understanding their process is the most critically important aspect when dealing with foreclosure sales. Most real estate agents and investors do not understand the complexities and necessary steps to navigate a foreclosure sale and simply run out of time. We however, have in significant experience ensuring the necessary steps are taken correctly, on time, and the sale is closed successfully before any foreclosure auction date happens. 

We can help you with all foreclosure buy and sell options.

Bankruptcy

Bankruptcy filing can immediately stop foreclosure in Georgia due to an automatic stay, which stops all collection activities. Options include:

• Chapter 13 allows for debt restructuring, potentially letting you keep your home linked with a debt repayment plan under court supervision typically over 3-5 years.
• Chapter 11 is typically filed by businessor those with too much debt for Chapter 13
• Chapter 7 eliminates most unsecured debt but may not allow you to keep your home

This bankruptcy process comes with legal and admin fees so can be expensive.  The new payment plan will include mortgage payments and if not paid your mortgage lender will most likely apply for your property to be removed from bankruptcy protection and placed back in foreclosure. Bankruptcy very severely impacts your credit rating for 7-10 years and will also damage your chances of securing future credit or buying a home again.

Consult with an attorney with foreclosure defense experience if considering bankruptcy.

Challenging the Foreclosure in Court

Common grounds to stop foreclosure in Georgia include Improper Notice, Mortgage Servicing Errors, Loss Mitigation Violations.  You will need well documented evidence to support your case.

Consult with an foreclosure defense attorney if considering challenging the foreclosure in court.

Government Programs

First step if you are facing foreclosure should always be talking to your mortgage provider, second step the Govt Programs and Georgia Mortgage Assistance Programs which are free, take advantage of them.

Atlanta Legal Aid Society              

https://atlantalegalaid.org/home/

Federal Housing Administration (FHA) Programs and HUD Approved Councilors

https://www.hud.gov/homeownerhelp

Georgia Mortgage Assistance Fund and Foreclosure Assistance

https://www.georgiamortgageassistance.ga.gov/

Third step having already talked to your bank and explored the Government options but still heading towards foreclosure and a loss of property, talk to us today. 

The Impact of Foreclosure

Foreclosure is a significant financial event that can have far-reaching consequences on an individual’s life. Here’s what you can expect following a foreclosure and how it may affect you.

• Loss of Property – Once the foreclosure process concludes, you will lose ownership of your home. The new owner, typically the lender or a buyer at a foreclosure auction, will take possession of the property. If you are still living in the property the typical eviction process takes about 14-30 days. When the paperwork is approved the new owner has a right to serve you a 3-day “Notice to Quit”. When this ends the sheriff will appear to assign an eviction date.

• Credit Score – The impact of foreclosure on your credit score will be to lower your score by 100 to 160 points, depending on your initial credit standing. It will remain on your credit report for 7 years from the date of the first missed payment. While the impact lessens over time, it can continue to affect your creditworthiness throughout this period.

• Financial Repercussions- You may owe a deficiency to your lender if the foreclosure sale doesn’t cover your outstanding debt. If the debt is forgiven there could be tax consequences, as forgiven debt may be considered taxable income. You also may face higher interest rates and limited credit options for future loans.

• Housing & Employment Challenges – Renting or buying a new home may be more difficult with a foreclosure on your record. Foreclosure may impact your ability to secure housing or a new job , as many landlords and employers check credit reports during their screening processes. A low credit score indicates higher risk for them.

• Buying a Home Again – This may be possible, but to qualify for a mortgage after foreclosure there are waiting periods. For FHA loans its 3 years and for conventional loans 2 to7 years, depending on circumstances. Impact of foreclosure on credit score will last for 7 y

Recovery “After” Foreclosure

As difficult as a can be to lose your house in foreclosure there are ways to rebound. First and foremost find an affordable place for you and your family to live. Ask your lender or the new owner if they will allow you to rent the home you lost to foreclosure. If they need you to leave they may offer you cash to vacate to help with relocation expenses.

Once you have found somewhere to live take a close look at your financial situation and establish a short and long term plan. We suggest as soon as practical find a reputable nonprofit housing and credit counseling agency to help you. Probably the most important work post foreclosure will then be to rebuild your credit score.  It’s not going to be easy but with a good plan and dedication you can get back on track, but it will take some time.

Get Help Today “Before” Foreclosure

Contact us today to explore the following resources and foreclosure assistance options:

– Avoid Foreclosure – explore the options available other than foreclosure

– Stop Foreclosure – understand and take advantage of your rights

– Sell Your Home – List for Retail / Sell as-is for cash / Short Sale / Sell and Rent Back

– Keep Your Home – What’s possible short, medium and long term

Knowledge and timing are the most important aspects in to saving or selling your home before a foreclosure auction date. We understand how this foreclosure process works and we leverage that knowledge on your behalf  to find you a better solution than the foreclosure of your home.

Get professional guidance and resources for foreclosure help in Georgia. Learn how to navigate the foreclosure process and protect your home with REI Help Center.

AVOID FORECLOSURE – TALK TO AN EXPERT

Phone: +1-404-382-8222 | Email: amanda@reihelpcenter.com