Foreclosures & Short Sales
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Increase Your Confidence & Relieve the Worry Associated with Mortgage Default by
- Learning How to Successfully Navigate the Pre-Foreclosure and Foreclosure Process
- Learning “The How-To of Short Sales” for Fannie Mae, Freddie Mac and Government Loans
- Learning What Your Pre-Foreclosure Options Are and the Foreclosure Process Here in Georgia
- Learning What is Required to Qualify For a Short Sale
- Learning What Happens If Your Home is Foreclosed On
- Learning the Strategies That are Best Suited for Your Situation
As Real Estate Professionals with Metro Brokers and RE/MAX, we have worked with hundreds of homeowners facing similar situations. Our expertise in the areas of Short Sales and Foreclosures will provide strategies that will increase the probability of a successful outcome. And our ready supply of well qualified buyers and legal team partners will insure that we get to closing.
We understand that this is an awkward and undesirable situation; however we can assure you that as your Broker it will be handled with the utmost sensitivity and confidentiality. Please feel free to call or email us to arrange a personal meeting. 770-623-3313 or VanPurser@VanPurser.com
The information below is not intended to provide complete and comprehensive information regarding foreclosures and short sales in Georgia, but is intended to provide basic insight into what a short sale is and the guidelines associated with the foreclosure process in Georgia.
How does foreclosure work in Georgia?
Georgia is a “non-judicial foreclosure” state. That means the lender can foreclose on your home without filing suit or appearing in court before a judge. The procedures for foreclosure are spelled out in the Official Code of Georgia, Sections 44-14-162 through 44-14-162.4.
Foreclosure begins with a default under the terms of the original promissory note or deed to secure debt. Usually the default is your failure to make the required payments on the loan. A default can also occur due to things such as failing to maintain property insurance or pay your property taxes.
Next, the holder of your mortgage must send notice to the borrower of its intent to foreclose. The borrower will not get much advance notice – Georgia law requires that the notice be sent at least 30 days before the date of the proposed foreclosure sale. The notice must be in writing and include the name, address, and telephone number of someone who has authority to negotiate, amend, and modify the terms of the mortgage with the borrower. The notice must also be sent to the borrower by registered or certified mail or statutory overnight delivery, return receipt requested, and include a copy of the advertisement of the foreclosure sale that will be published in the official county newspaper for public announcements. Refusing to accept a notice sent by registered or certified mail is a bad idea; it will not invalidate the notice.
The holder of your mortgage must publish notice of the foreclosure in the official county newspaper for public announcements where the real property is located for four consecutive weeks prior to the scheduled foreclosure. If it has not already done so, the holder of your mortgage must file proof that it owns title to the security instrument related to the real property with the clerk of the superior court of the county in which the real property is located, prior to the start of the foreclosure sale. This proof is usually in the form of an assignment of the promissory note and deed to secure debt. Since mortgages are often sold or assigned, this requirement may assist the borrower with identifying the current holder of their mortgage.
The foreclosure sale will take place on the courthouse steps in the county where the property is located. By law, foreclosure sales take place on the first Tuesday of the month between the hours of 10:00 a.m. and 4:00 p.m. Bidding is open to the public, but the mortgage holder often is the only bidder. The mortgage holder will sign a deed of foreclosure to the winning bidder, which may well be itself. At that point, the winning bidder becomes the new owner of the property.
What happens after the foreclosure sale has taken place?
A valid foreclosure wipes out the borrower’s right to live in the house. The new owner of the property may file a dispossessory action to evict the borrower from the home. Some lenders have a “cash for keys” program, in which they will pay homeowners a small amount to voluntarily leave the property.
In most cases, the mortgage holder accepts the property in satisfaction of the loan, and foreclosure marks the end of legal proceedings against the borrower. However, the holder of the mortgage may file suit against the borrower to recover any difference between the amount paid for the property at the foreclosure and the amount remaining on the promissory note. This is called a deficiency proceeding. If this happens, the matter will go before the courts.
How can I avoid foreclosure?
Several options may be available to a homeowner facing foreclosure:
- Contact your lender or servicer and make arrangements to cure the default. Usually, this means making cash payment to bring the loan current.
- Contact your lender or servicer and make arrangements for a “short sale.”
- Secure a Real Estate Broker to represent you in the “short sale”
- Contact your lender or servicer and make arrangements for a “deed in lieu of foreclosure.”
- Consult a private attorney to see if a bankruptcy petition is advisable.
- Consult a private attorney to see if there are legal grounds to seek a restraining order.
Which options are available or appropriate for the homeowner will depend on the particular facts of the case. Although our office is prohibited by law from giving you legal advice, a private attorney or HUD-certified housing counselor may be able to help you. Some of these options are explained in more detail below. In all cases, though, you must act immediately after receiving notice of a foreclosure.
What is a short sale?
A short sale occurs when you sell your home for less than the balance remaining on your mortgage. It is important to understand that a short sale must be approved in advance by your lender. If it is approved, the holder of your mortgage agrees to accept the proceeds of the sale and to cancel the mortgage.
You may also be eligible for the federal government’s Home Affordable Foreclosure Alternatives Program (“HAFA,”) which offers short sale and deed-in-lieu options. For more details on HAFA eligibility requirements, visit www.makinghomeaffordable.gov.
What is a deed in lieu of foreclosure?
A deed in lieu of foreclosure is a legal document signed by the homeowner to voluntarily transfer ownership of the property to the lender in exchange for a release from the loan. This is sometimes referred to as “giving the property back to the bank.” This option is only available if the lender agrees to accept the deed and to cancel the mortgage.
In some situations, if your mortgage is owned by Fannie Mae, you may be able to lease your home after signing a Deed in Lieu of Foreclosure. Even if your loan is not owned by Fannie Mae, there may be a similar leasing option offered by your lender.
How can a bankruptcy petition help me?
Under federal law, the valid filing of a bankruptcy petition acts as a “stay” of legal proceedings against the debtor, including a non-judicial foreclosure. Such a petition will suspend the foreclosure proceedings if it is properly filed with the Clerk of the U. S. Bankruptcy Court before the property is sold on the courthouse steps. However, in some cases, the mortgage holder may seek permission from the bankruptcy judge to resume foreclosure proceedings. Moreover, if you want to keep your house, then you will have to continue paying the mortgage during the bankruptcy proceedings.
The filing of a bankruptcy petition has serious consequences. You should seek legal advice before making that decision to ensure that it is in your overall best interests.
What are the tax consequences if my home is sold at foreclosure?
The Internal Revenue Service has a special section on its website for people who have lost their homes through foreclosure. The IRS also reminds homeowners that although mortgage workouts and foreclosures can have tax consequences, special relief provisions may reduce or eliminate the tax burdens for borrowers who lose their homes. This information is available at: http://www.irs.gov/newsroom/article/0,,id=174022,00.html