Understanding the foreclosure process in Georgia is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in Georgia
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 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 a property are: judicial sale or power of sale.
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or through our contact page to have us walk you through the specific foreclosure process here locally in Acworth.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 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 a legal term that refers to a court order against a borrower who fails to repay a loan after their property has been foreclosed. In such cases, the bank or lender may take legal action against the borrower to recover the remaining balance of the loan amount that was not paid through the foreclosure sale. This means that even after the borrower loses their property, they may still be held responsible for the outstanding amount, which is referred to as a deficiency balance. A deficiency judgment can result in serious consequences for the borrower, such as wage garnishment, seizure of assets, or damage to their credit score. Therefore, it is essential for borrowers to understand the implications of a deficiency judgment and seek professional advice to avoid such situations.
When a borrower defaults on a mortgage or other secured loan, the lender may be able to seek a deficiency judgment against them. This is a court order that allows the lender to recover the remaining balance of the loan after the property has been sold at a foreclosure auction or other type of sale. However, the rules governing deficiency judgments vary from state to state. As the sentence suggests, some states limit the amount that can be assessed to the fair value of the property at the time of sale, while others allow the lender to pursue the full loan amount. This means that borrowers in certain states may be at greater risk of being held liable for a large deficiency judgment if they default on their loan. It’s important for borrowers to understand the laws in their state and to consult with an attorney if they are facing a deficiency judgment.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
The process of foreclosure can be overwhelming and financially devastating for homeowners. It often involves a forced sale of the property at a public auction, which may result in a much lower sale price than what the property is actually worth. Therefore, it’s generally recommended to avoid foreclosure auctions whenever possible. Instead, there are several options available to homeowners, including negotiating with the bank or working with a reputable real estate firm to help negotiate discounts off the amount owed. By doing so, homeowners can potentially save their credit scores and avoid the long-term consequences of foreclosure. Companies such as Tyler And Alyson Buy Houses have the necessary expertise and experience to assist homeowners in these negotiations, making the process smoother and less stressful for all parties involved.
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 a property near Acworth, we can help you.
We buy houses in Acworth Georgia like yours from people who need to sell fast.
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Another Foreclosure Resource For Acworth Georgia HomeOwners: