Understanding the foreclosure process in Georgia is incredibly important if you are facing foreclosure, and we’re here to help.
Understanding the Foreclosure Process in Georgia
What is Foreclosure Anyway?
Foreclosure is the legal process that lenders use to take back a property that is being used to secure a loan, generally after the borrower stops making payments over a length of time.
While foreclosure can be frightening, and certainly no fun at all, it doesn’t have to be the end of the world. Start by reading this article, download our free foreclosure guide, and then get started. The foreclosure process can take only about 90 days in Georgia, so you have no time to lose.
Foreclosure Basics
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in each state, but Georgia is considered a Non-Judicial state. All this means is that lenders (banks) can foreclose on the property without necessarily having to go through the court system.
This means that the process can go much faster, which is why you don’t have any time to waste.
In a Judicial state, like Florida, the foreclosure process takes much longer since lenders have to go through the courts.
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 – meaning, overdue or behind in your payment.
So this really shouldn’t be a surprise, unless the address on file with your lender isn’t one that you typically receive mail.
Under Power of Sale (or Non-Judicial Foreclosure)
The steps in a non-judicial foreclosure tend to follow these steps in order:
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review
- They will also try to call you many times throughout the process. Lenders don’t want to foreclose! This costs them time and money, so they want to work out a deal with you.
- 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.
Anyone who has an interest in the property must be notified during the foreclosure process, and are entitled to proceeds from the sale if the property sells at auction.
For example, any contractors or banks with liens against a foreclosed property will be entitled to collect on the proceeds if the house sells.
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 when the bank gets a judgment against you, the borrower, for the remaining funds owed on the loan amount after the foreclosure sale.
For example, say that the total amount that you owe on your property including mortgage, taxes, liens, etc. is $150,000. If the home sells for $100,000 at auction, then the bank can issue a deficiency judgment to collect the remaining $50,000 owed.
They can then use typical methods that banks like to use, like garnishing your wages, to collect the $50,000. Unlike the initial foreclosure process, this will definitely go through the court system.
Generally, you want to avoid the foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Homeowner Help Today to help you negotiate with your lender to potentially stop the foreclosure.
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.
If you need help with foreclosure in Atlanta, we can help you. If you want to keep your house, we can help – and if you want to sell, we buy houses in Atlanta Georgia like yours.
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