Avoid Georgia Foreclosure
Foreclosure simply means the process by which a lender may repossess a property when the borrower defaults on payments. It is one of the most frightening, embarrassing and traumatic experiences an individual or family can endure. And the effect of foreclosure on a person's credit rating and ability to become a homeowner in the future are negative and long-lasting. A foreclosure remains a blight on the borrower's future ability to get a home loan. While other negative credit items may fall off an individual's credit report after 4 - 10 years, the one question that is asked on every mortgage application is "Have you ever had a foreclosure?"
Q: What is the process for foreclosure in Georgia?
A: In few states is the foreclosure process as fast and brutal as it is in Georgia. Unlike most other states, Georgia allows foreclosure to take place with no judicial oversight as long as a power-of-sale clause is included in the security document. It is not even required to file a lawsuit. And no state has a shorter foreclosure process. Although most lenders will wait until a borrower is several months behind in payments before initiating a foreclosure, once the process starts in Georgia, a house can be sold on the courthouse steps in as few as 37 days. Lenders, of course, prefer this method because it involves less time and expense for them than if they were required to file a lawsuit.
A: It could happen to anyone in this challenging economy. Unexpected expenses like medical bills are often the culprit. Sometimes people need to move but can't sell because they owe more than the home is currently worth in this "down market". Also, the ongoing deterioration of the job market has meant more homeowners are falling behind in their payments due to unemployment. Then there are the "Alt-A's" (sub-prime mortgages) and Option ARMs that are resetting at higher rates while incomes remain stagnant and home values plunge.
However they got there, countless Georgians now find themselves unable to make their monthly mortgage payments as promised and therefore are facing the threat of losing their homes or investment properties.
Q: Why is the Georgia foreclosure process so fast?
A: Georgia is what's known as a Title Theory state, where the property title remains in the hands of the lender until the underlying loan is paid in full. When a person buys real estate in Georgia with funds borrowed from a lending organization or party, the loan -- also called a mortgage -- is established by two legal instruments: a promissory note or "promise to pay", and some type of title security document. The mortgage creates a lien on the property in favor of the lender. In Georgia this usually takes the form of a security deed conveying title of the property to the lender, even though the borrower retains all the usual rights of ownership as long as the repayment terms are being met. If payments are not made as stipulated, the lender may foreclose.
A: Unfortunately, a foreclosure does not necessarily end a borrower's home purchase debt. In Georgia, a lender may seek a deficiency judgment against the borrower when the proceeds from a foreclosure sale are insufficient to satisfy the debt. When the court orders such a judgment, the defaulting borrower's other assets may be ordered sold to satisfy the judgment.
A: It's a good idea to work with a specialist when so much is on the line. A short sale expert is your best answer when facing the possibility of foreclosure. Don't walk away from it. Don't just do nothing. It will catch up with you before you know it. Don't spend thousands of dollars and ruin your credit with a bankruptcy. The foreclosure will not disappear that way.
Don't sign a Deed in Lieu of Foreclosure. That has the same effect as a foreclosure on your credit. And don't sign a contract with any real estate agent unless they understand completely both the foreclosure and short sale negotiating process.
Get expert help right away, because in Georgia, you don't have any time to lose. Delaying one day can mean the difference between saving your home and sliding into foreclosure. Remember, you're already in default. Matters can "snowball" on you and completely overwhelm you in just one day. The key besides working with a specialist is to move swiftly and with resolve.
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