Following the moratorium offered on government-backed mortgage loans, the number of foreclosed homes slowly receded over time. According to ATTOM Data Solutions, a leading provider of real estate and property data, the number of foreclosed homes in the 1st Quarter of 2021 was up by 9% from the 4th Quarter of 2020. Fortunately, this value remains 75% higher than the previous year (March 2020).
While the moratorium was good news for a lot of homeowners, it still didn’t stop banks from foreclosing vacant and abandoned properties. This partially explains why the average days to complete a foreclosure process continued to increase from the 1st Quarter of 2020.
So, if you own a house in Georgia that you’re having trouble paying, it might be best to revisit it or consider selling it before the bank catches up. Likewise, if a Notice of Default has already been served for your home, don’t worry because you still have a chance to sell it and not move out empty-handed.
To sell your foreclosed home in Georgia, you first need to understand the state’s foreclosure process.
Types of Foreclosure
As classified by the U.S. Department of Housing and Urban Development, there are two (2) types of property foreclosures in the country: Judicial and Non-Judicial.
In a Judicial Foreclosure, the mortgage lender has to file a civil complaint in court and file a claim to your house. The foreclosure process only starts once the court accepts the claim and issue a foreclosure order. On the other hand, in a Non-Judicial Foreclosure, the mortgage lender can directly give a Notice of Foreclosure to the homeowner without a court order. This is one of the reasons why foreclosure in Non-Judicial states are faster than in Judicial states.
In the State of Georgia, Non-Judicial Foreclosure is practiced. This means that if you’re behind on your mortgage payments, be quick at finding a way out before your mortgage lender starts the foreclosure clock on your house.
The Foreclosure Process
Since Non-Judicial Foreclosure doesn’t involve the court, the process is shorter.
- Issuance of Demand Letter
Also called the Notice of Default or Breach Letter, the Demand Letter is sent by the mortgage lender to the borrower as soon as you’ve exceeded the maximum mortgage grace period.
- Response from Homeowner/Borrower
Then, the borrower is given a specific, pre-determined period to pay what is owed or respond to the letter. If your loan has been due for more than 120 days, and the borrower didn’t give any form of response to the demand letter, the lender has the right to start the foreclosure process officially.
- Identification of Target Sale Date
The target sale date is determined by the lender. This will dictate the schedule of all other activities and requirements leading up to the sale date.
- Issuance of Notice of Intent to Foreclose
Once the date is set, the lender will issue a Notice of Intent to Foreclose 30 days prior to the sale date. A public announcement of the foreclosure will also be rolled out to inform those with other related claims on the house (e.g., unpaid contractors and other lienholders).
- Provision of Legal Fee Notice
Along with the Notice of Intent to Foreclosure, a notice about legal fees is issued. Typically, the notice gives the borrower the chance to avoid paying foreclosure legal fees by paying the loan’s principal and interest within ten (10) days from the day the notice was issued.
- Reinstatement
Should the borrower pay the overdue balance and its associated charges, your lender can reinstate you, depending on what is written in your Security Deed. Sometimes, lenders also reconsider especially when the value of your loan is high.
- Foreclosure Sale
If the borrower cannot satisfy any of the CHANCES above, the foreclosure sale will proceed through an auction organized by the lender.
When Can I Start Selling a Foreclosed House?
You have between the pre-foreclosure phase until before the auction date to sell your home. Even if you’ve received the Demand Letter or the Notice of Intent to Foreclosure, you can still sell your home enough to pay your overdue balance. You can find a buyer who’s willing to assume your mortgage or a buyer who’s willing to pay your remaining mortgage + equity on the house.
Making a Short Sale
A short sale is when you sell your house for a lower price than what you owe on the mortgage. Yes, this could mean that your lender will not get back the total borrowed amount, but they sometimes agree to this, especially when the cost of doing foreclosure is relatively higher. Likewise, to make a short sale, you have to ask permission from your mortgage lender, and they will set the selling price. If the lender doesn’t allow a short sale, you cannot proceed with it.
A short sale is only one of a few options you could do to avoid foreclosure. Other ways include filing for bankruptcy, getting your loan modified, or finding another lender who’ll refinance your mortgage.
Work Together with a Great Real Estate Broker
When you make a short sale, you still have an option to either sell on the market or off the market. Either way, the best thing to do first is to contact a reputable and reliable real estate broker who has excellent experience handling foreclosed homes sales.
Contact us at HomeSold GA today, and let’s see how you can get the most out of your foreclosed Georgia house!