Understanding the foreclosure process in Georgia is an important part of navigating your own home foreclosure in Georgia.
Before we dive in…
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. A foreclosure occurs when a property owner cannot make principal and/or interest payments on his/her loan, typically leading to the property being seized and sold.
Foreclosure is no fun. But just know that it’s not the end of the world. You have foreclosure options.
When you know how foreclosure in Georgia 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.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon property are judicial sale or power of sale.
Connect with us by calling (423) 463-7269 or through our contact page to have us walk you through the specific foreclosure process here locally in Atlanta.
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):
- 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 for 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.
The Foreclosure Process: Facing Foreclosure In Suwanee Georgia
Many people have difficulty in understanding the foreclosure process in Georgia; however, Georgia‘s foreclosure process is not very difficult to understand.
There are several stages during which the homeowner has an opportunity to bring the loan current and avoid foreclosure.
After about three to six months of missed payments, the lender orders a trustee to record a Notice of Default (NOD) at the County Recorder’s Office.
This puts the borrower who is behind on mortgage payments on notice that he or she is facing foreclosure and starts a reinstatement period that typically runs until five days before the home is auctioned off at the foreclosure auction.
If the default isn’t corrected (the loan must be brought current) within three months, a foreclosure sale date is established.
The homeowner will receive a Notice of Sale, and this notice will also be posted on the property.
In addition, the Notice of Sale is recorded at the County Recorder’s Office in the county where the property is located.
Finally, this Notice of Sale is also published in newspapers local to the county in question over a three-week period.
The foreclosure Trustee Sale typically occurs on the steps of the county courthouse in which the property is located.
The time and location of this sale are designated in the Notice of Sale.
At the Trustee Sale, the property is auctioned in public to the highest bidder, who must pay the high bid price in cash, typically with a deposit up front and the remainder within 24 hours.
The winner of the auction will then receive the trustee’s deed to the property.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
At auction, an opening bid on the property is set by the foreclosing lender. This opening bid is usually equal to the outstanding loan balance, interest accrued, and any additional fees and attorney fees associated with the Trustee Sale. If there are no bids higher than the opening bid, the property will be purchased by the attorney conducting the sale, for the lender.
If this occurs, and the opening bid is not met, the property is deemed an REO or Real Estate Owned. This typically occurs because many of the properties up for sale at foreclosure auctions are worth less than the total amount owed to the bank or lender.
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 Breyer Home Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a 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 to sell property near Atlanta, we can help you.
We buy houses in Atlanta Georgia like yours from people who need to sell fast.
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Other Foreclosure Resources For Atlanta Georgia HomeOwners: