FORECLOSURE CENTRAL

(What is it? How to avoid it. Where to find foreclosed homes for sale.) 

 "Skip the basics!  Take me directly to Foreclosure Resources."

What is FORECLOSURE?

Unless you're one of the fortunate few who did not have to borrow the money to buy your home, you were required to offer your home as security or collateral for your mortgage note when you bought your home.  In Georgia, this is done with what is commonly called a Security Deed.  The Security Deed spells out (in painful detail) what your rights and obligations are - you have the right to live in, enjoy, and possess your home as long as you make the payments - and what the lender's rights and obligations are - they must leave you alone unless you don't make the payments, at which time they can foreclose - sell your home to pay off the debt.  And, since Georgia is a "non-judicial foreclosure" state, the lender can do so without a judge or court being involved.  The exact process will be spelled out in the Security Deed, but what follows is a typical foreclosure process. 

For whatever reason, a borrower gets behind on his mortgage payments - how many payments is really up to the individual lender, but could be as few as one or two.  At some point the lender will contact the borrower and try to work out a solution to the problem.  If this fails, the lender will then begin the foreclosure process.  They will advertise the home for sale for four consecutive weeks in the local newspaper.  During this period, the home is said to be in "pre-foreclosure."  The sale is a public one which usually takes place on the first Tuesday of every month at the county courthouse in the county where the home is located.  The lender usually uses a local attorney to conduct the sale for them.  At this point, it is important to understand that the lender does not own your home, but is simply offering it for sale to pay off your debt on it.  If nobody bids enough on the home, then the lender will usually buy it for what is owed (or close to it), at which time the lender then becomes the owner by deeding the property to themselves for you.  Then, as the rightful owner of the home, the lender will then offer the home for sale on the open market.  At this point, the home is referred to as REO property, or Real Estate Owned (by the lender). 

What is a SHORT SALE?

Simply put, it is when the lender agrees to allow you to sell your home "short," or for less than you owe on it - usually to prevent foreclosure.  If the lender agrees to the sale, they will usually then "forgive" your debt in full.  You will usually have to show the lender why you are having trouble making the payments (hardship), and present them an acceptable offer from a prospective buyer.  You should make sure everything is agreeable to you and in writing.  You would not want to sell your home only to discover that you still owe some amount to the lender!   Also, you should make sure the lender includes any taxes owed on the property or any liens on it when making their decision.  One note to keep in mind:  the lender will not do a short sale just because you're tired of your home.  You borrowed money from them and they will use any means necessary to get paid back.  They may feel it is more to THEIR advantage to go ahead and lose a little money now, than to go through the time and expense of foreclosure and probably having to resell your home.   

What is a "Deed-in-Lieu of Foreclosure"?

This arrangement is in some ways similar to a short sale.  The simplest way of looking at it is that it's a short sale where the lender is the buyer.  The lender agrees to "buy" your home (at a "price" you both agree to) and in exchange, you deed the property directly to them to avoid foreclosure.  In this way, you don't have to find a buyer for a short sale, and the lender doesn't have to go through the foreclosure process.   

How to Avoid Foreclosure

Without trying to be "cute," the obvious answer is for you to abide by the terms of your Security Deed - make your payments on time or at least not too late.  Having consistently- late payments will cost you in late fees and adversely affect your credit rating, but will hardly ever cause a lender to start foreclosure.  If you find yourself behind only one payment, the first thing you should do is contact your lender - immediately.  If you had a temporary financial setback (medical emergency, loss of work, etc.), the lender will usually work with you to "get caught up."  If you just cannot make the payment, the lender may agree to a short sale, a deed-in-lieu of foreclosure, or just simply proceed with foreclosure.  In any case, the lender is "calling the shots," so call them as soon as you're behind, and be nice! 

Also, you may qualify for loan modification on your present mortgage to help reduce your payments.  You do not have to be behind on your payments, but will have to show why you are now having a problem making them.  Go to the "Making Home Affordable" site (see link below) for more information and to see if you might be eligible. 

We're here to help!

Facing foreclosure may seem like a scary, hopeless situation, but it's not one you have to face alone.  We have the training, experience, and understanding to help you wade through this swamp.  Contact us TODAY and let us see if we can help you.

Foreclosure Resources

Click here to read HUD's "Guide to Avoiding Foreclosure"

 

Click here to see if you are eligible for loan modification on your mortgage

 


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Click here to learn more about and search for HUD/FHA Foreclosures

Click here to search for Fannie Mae Foreclosures

Click here to search for Freddie Mac Foreclosures