Georgia Foreclosures: Some Tips For Investors And Those In Default

In Georgia foreclosures are at an all time high, just as they are in the rest of the United States. The failure of many mortgage loans can be blamed partly upon the economic downturn. Another major cause of increasing number of foreclosure actions is the high percentage of risky loans that were approved in the period between two and four years ago.

The loans that fall in the category of risky often were so large that the borrower was just barely able to make a full monthly payment. Any event that increased the monthly expenses for borrowers or reduced the income could result in not enough money to make the mortgage payment. A loss of income of a wage earner in the household due to job layoffs or illness can be the final straw, bringing down the entire financial picture.

About three to four years ago, a number of highly structured mortgage loans were made to buyers who simply could not afford standard mortgages. In many cases the borrower had a schedule of interest only for two years. The borrower might not be required to pay all the interest, taxes and insurance for the initial period. Instead these charges were added to the principal amount of a loan. The loan structure called for a refinance at the end of the initial period, hoping for a better earning record and credit score after two years so that the refinance would be approved.

In the two year period, homeowners who had taken out a loan where the monthly payments included an artificially low interest rate or even a loan where the interest for two years was added to the principal discovered that credit was extremely tight and the borrower’s qualifications for the initial loan were no longer good enough to warrant refinancing. Further, the size of the loan’s principal had increased in spite of payments. There was no equity in the home, since increasing numbers of foreclosures were placing increased downward pressure on housing prices.

Given all of these factors and the increasing number of employee layoffs and plant closures, foreclosures have become a major threat in this country. When the borrower is no longer able to make payments on the mortgage, the process of taking the property back by the lender is called foreclosure. This can be either a judicial or a non-judicial proceeding.

In Georgia, most trust deeds and mortgages have a clause that permits an out of court foreclosure proceeding. Under this process, the lender files a petition describing the property, the default, details concerning the description of the property and contact information for curing the default. The borrower has a thirty day period in which to pay the default amount. Depending upon the terms of the deed, the borrower may be forced to pay the entire loan amount to cure the default, which is usually impossible.

If the default is not resolved, a foreclosure sale notice is posted. It occurs for four weeks prior to the sale date. Foreclosure sales in Georgia happen on the first Tuesday of the month, beginning at 10 a. M. The sale takes place at the county courthouse. If the winning bidder is not the lender, the full amount of the bid must be paid immediately following the sale.

The final step in the Georgia foreclosures process is to confirm the sale through the courts. If the sale is for less than the value of the property, the court may order the process to begin all over again. Otherwise, the property passes legally to the new owner. The original borrower has no redemptive right.

Ga foreclosures have increased seriously over the last two years. The same is true of states throughout the USA. We’ve got the ultimate inside info on Ga foreclosure properties.