What should I know about mortgage foreclosure in Georgia?

Contents

• What is a mortgage foreclosure?
• What are my rights before the foreclosure sale?
• What are my responsibilities if a foreclosure sale has already taken place?
• How do I protect my rights?

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What is a mortgage foreclosure?

A mortgage foreclosure is the legal process that allows your mortgage lender to sell your house and use the money to pay off the balance of your mortgage including legal fees and late fees. 

In Georgia, most mortgage foreclosures happen without a court hearing. The mortgage company usually does not need to take you to court to foreclose on your home. The legal term for this is non-judicial foreclosure. To foreclose, the lender only has to follow special rules to notify you.

In Georgia, foreclosure sales occur on the first Tuesday of each month between 10:00 a.m. and 4:00 p.m on the courthouse steps.

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What are my rights before the foreclosure sale?

Right to Notice of the Foreclosure Sale Date: 

The mortgage company must send a written notice of the forclosure sale to the borrower no less than 30 days before the foreclosure date by certified, registered, or overnight mail. This notice is typically sent by a law firm on behalf of the mortgage company.

Right to Proper Advertisement:

The foreclosure sale must be advertised in the local newspaper once a week for four weeks in a row before the scheduled foreclosure sale date. The advertisement must correctly state the home's address. The advertisement must also provide the name, adddress, and telephone number of the person or entity who has full authority to negotiate, amend and modify all terms of the mortgage.

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What are my responsibilities if a foreclosure sale has already taken place?

After a foreclosure sale, you no longer own the home. The purchaser at the foreclosure sale is typically the mortgage company but may be an investor, a company, or an individual. After the foreclosure sale, you have the legal status of a renter.

The new owner will most likely contact you and demand that you move out.

Sometimes the buyer is willing to negotiate a "cash-for-keys" move-out date, especially if the mortgage company is the buyer. "Cash-for-keys"  is an arrangement where the buyer typically requires that you remove all your belongings and leave the home in broom-clean condition by a certain date. Consider this option if you realisticaly can comply with the written terms by the deadline provided.

If the buyer will not negotiate a move-out date, they cannot force you out of the house or take possession of the house until they have given you a written demand and have filed a "dispossessory" (eviction) warrant. This is called the Post-Foreclosure Dispossessory Process.

The Post-Foreclosure Dispossessory Process:

1. The company or individual who purchased your home at the foreclosure sale must go to court and file a dispossessory (eviction) warrant. The county marshals will deliver the warrant or post it on your home's front door.

2. Once you have been served, you have seven days to file an answer in court. If you do not file a timely answer, you could be evicted immediately.

3. Generally, a trial in court is scheduled about a week or so after the answer is filed.

4. If you attend the trial, even if the judge rules against you, the judge will give you seven days to move.

5. If you stay in your home after the judge's deadline, the county marshals can come at any time without warning. They can put you, your family, and your belongings on the street.

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How do I protect my rights?

Talk with a lawyer immediately if you believe you have legal claims for wrongful foreclosure. If your goal is to remain in the home, your lawyer will need to act quickly.

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Contents

• How can I stop a scheduled foreclosure sale?
• What can I do if I cannot afford to keep my home?

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How can I stop a scheduled foreclosure sale?

Once a foreclosure sale has been scheduled, you will only have 30 days to try to stop the sale.You could try to work out a payment agreement with the mortgage company. Get a written confirmation from the mortgage company or the foreclosing lawyer that the scheduled sale has been cancelled.

Here are a few examples of possible payment agreements:

• Pay off your mortgage: The legal term for paying off the amount overdue on a mortgage is arrears. In most cases, the mortgage company will accept payments to stop foreclosure.

• Repayment plan: You may be able to continue making your regular payments and pay extra each month until you catch up.

• Forbearance agreement: For a short time, you may be allowed to make reduced payments or to not make payments. The total of all your missed payments is usually due at the end of the forbearance period.

• Reverse mortgage: If you are a senior homeowner, you may get time to pay off your mortgage using the proceeds of a reverse mortgage. Contact a lawyer or a HUD Certified housing counselor to understand how reverse mortgages work.

  • Note: This is not a trusted option as applying and getting approved for a reverse mortgage typically takes much longer than 30 days, which is more time than available if the foreclosure sale date is scheduled.

• Loan modification: If you do not have enough money to pay the full amount each month, your lender may agree to change the terms of your loan. Your lender could lower the monthly amount. For example, they might reduce your interest rate or extend the length of your loan. As soon as you think you may have trouble making your regular payments, apply for a loan modification.

  • Note: This is not a trusted option as applying and getting approved for a mortgage modification typically takes much longer than 30 days, which is more time than available if the foreclosure sale date is scheduled.

• File bankruptcy: If you have enough consistent monthly income to resume your monthly mortgage payments, but not enough money to pay the arrears, then you may be able to file a Chapter 13 bankruptcy to save your home. Under a Chapter 13 bankruptcy, you can pay the past due amount over a 3-5 year period, but you must also be able to make your on-going mortgage payments. You may be able to file bankruptcy before the foreclosure sale. Notify the foreclosure lawyer. The bankruptcy may include a repayment plan. Make sure to get an attorney to represent you.
• File a lawsuit: If you have legal claims to challenge the mortgage loan or foreclosure, speak to a lawyer right away. You can file a lawsuit in superior court where you may be able to get a temporary restraining order to stop the scheduled foreclosure sale.

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What can I do if I cannot afford to keep my home?

Sell the home before the foreclosure sale: You may have to think about selling your home. Make sure to get an experienced real estate agent. You should give this serious thought if you have equity in your home. You have equity when your home is worth more than what you owe on the mortgage. If you have equity, do a “full” sale. This means that the sale proceeds will pay off the mortgage loan(s) completely, pay the real estate agent commission, and pay you the rest of the proceeds.

Deed in Lieu of Foreclosure: This is an option when there is no equity in the home. It means that your lender agrees to take ownership of your property. In exchange, they forgive the money you owe.

Cash-for-Keys: The buyer may offer to pay you to move out all family belongings by a certain date. Consider this option if you believe you can obey the written terms by the deadline given. Make sure the agreement releases you from all liability on the mortgage loan. Otherwise your lender could sue you for the rest of the money or you could face income tax problems.

Bankruptcy: Bankruptcy law is complex. If you are considering this option, you should find an attorney to represent you.

Please note, any option that results in the transfer of your home may have tax consequences. You should talk with a tax professional if you have any questions.

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