Are you struggling to make your mortgage payments? If you have gotten behind in your payments, your lender may initiate foreclosure proceedings against you. If you are facing foreclosure in Georgia, you may have an alternative. 

Forbearance Instead of Foreclosure

Before the foreclosure process begins, there are some options through your loan servicer to help you avoid the foreclosure proceedings. You have the right to request a forbearance. A forbearance is when a homeowner can pause or reduce mortgage payments. 

If your lender offers you a forbearance, it doesn’t mean payments are forgiven or erased. Instead, you will still be obliged to repay any payments you missed. Typically, if you are offered forbearance, there won’t be additional fees, penalties, or any additional interest added to the mortgage account. 

You won’t have to complete extra paperwork when you request a forbearance. Instead, you demonstrate a financial need and request a forbearance due to financial hardship. 

What is Foreclosure?

When someone is unable to continue making their mortgage payments, the lender can force the sale of the home through a Georgia home foreclosure. Each state has different laws governing home foreclosures. In Georgia, the home-foreclosure process is relatively a speedy one, and can happen as quickly as a few months.

The foreclosure process begins when the homeowner misses a payment. Under federal law, lenders must wait for a homeowner to be delinquent for at least 120 days before beginning the foreclosure process. During this period, homeowners can work with their lenders to avoid the foreclosure in a process called “loss mitigation.”

Typically, lenders offer a grace period after a payment due day. That grace period can last up to 15 days. If you don’t pay your payment within those 15 days, you could be charged a late fee, and the lender can report the lack of activity to the credit bureau. 

If you miss multiple payments, you will find yourself in default. Some lenders consider you in default after thirty days of not receiving a payment. Others have a 15-day limit. When you are in default is determined by your lender. 

The next steps are determined by whether your lender is proceeding with a judicial or non-judicial foreclosure against you. Judicial foreclosures happen when the state mandates them or when there is no power of sale clause in your mortgage agreement. Non-judicial foreclosure occurs when there is a power of sale clause in the mortgage, and the mortgage is allowable by the state. This kind of foreclosure is typically less expensive and faster. 

In a judicial foreclosure, the lender will file a foreclosure lawsuit and give you the opportunity to respond to the lawsuit. The judge will likely grant a default judgment in the lender’s favor if you refrain from responding. If you do respond, the case could go to trial, or the judge could file a motion of summary judgment.  When there isn’t a dispute regarding the material facts in a foreclosure case, the judge could issue a summary judgment. 

In a non-judicial foreclosure, your lender sends a notice of default through a certified letter. The notice also gets recorded at the county registrar’s office. The notice of default will detail several pieces of information like past due amounts, late fees, and foreclosure costs. Once you receive your notice of default, you usually have 90 days to repay the money you owe your lender or set up an agreement for repayment. 

Before your home sales, you can pay what is owed to stop foreclosure proceedings. You still own the home, so you can work quickly to save yourself from eviction. Contacting your lender regarding the foreclosure process could help stop it. 

If you don’t make arrangements within the default period, a notice of sale will be issued. It could be published in the newspaper, or it could simply be posted on your property. After the notice of sale has been issued, the lender prepares the home for sale by auction. 

After the lender sells the property, you will have to vacate it. Your state regulations dictate how long you have to leave the property. Typically, you can remain in the home until the sale is completed, but that isn’t always the case. It depends on where you live, but if you remain on the property longer than you should, the homeowner or lender will begin eviction proceedings. 

Don’t forget that taxes are required for as long as you live in your home. Sometimes, a lender will pay these taxes to facilitate a faster sale. If the taxes are late, the government can seize and sell your home. 

While lenders must wait 120 days to formally begin the foreclosure process, lenders must follow other rules. For example, a lender must inform a homeowner within 36 days of a missed payment, and each 36 days thereafter. Additionally, lenders must inform homeowners about their loss mitigation options no more than 45 days after a missed payment.

Most Georgia security deeds contain a clause allowing the lender to demand the entirety of the loan’s balance if the borrower defaults on the loan. This is called an acceleration clause. Before the federally-mandated 120 days is up, a lender must send a homeowner a breach letter, explaining that the homeowner has violated the mortgage agreement. A breach letter must also explain how the borrower can bring the loan back into compliance and the date by which that must be done. Typically, the lender will send this letter after 90 days of delinquency, stating that the borrower has 30 days to cure the default, at which point the lender will trigger the acceleration clause and sell the property.

Once the 120-day period is up, the lender must provide the following notices:

• 30-day notice of intent to foreclose
• Publication of the notice of sale
• Reinstatement before sale

If the default is not cured, the home will go to a foreclosure sale, which are held at the county courthouse on the first Tuesday of the month. The property will be sold to the highest bidder, who may then sue the original homeowner for a deficiency judgment for any amounts owed under the original mortgage.

Unlike other states, Georgia does not have a redemption period, meaning that once a home has been foreclosed, it cannot be redeemed. Once the home is sold, the former homeowner no longer has a right to occupy the property. If, after a foreclosure, a former homeowner does not leave, the new owner can either offer them a cash payment to leave or initiate an eviction proceeding.

If you are considering filing for bankruptcy, contact the knowledgeable attorneys at the Georgia bankruptcy law firm, Morgan & Morgan, P.C. To learn more, call (706) 752-7089 to schedule a free consultation today.