As a current homeowner or future homeowner, knowing state laws when it comes to foreclosures are crucial and imperative. Especially during these times. I am a real estate agent, in the state of Georgia, therefore, some of this post will specifically focus on Georgia laws. Please refer to your own state laws regarding judicial and non-judicial proceedings. As always, any and all legal and financial advise should be researched and consulted by an attorney and/or tax advisor or accountant. If you have a loan that is not covered under the CARES Act and need help, contact me, I’m here to help!
In an nutshell, federal law states, to give a borrower sufficient time to research loss mitigation options, the servicer (lender) usually has to wait up 120 days of delinquent payments on the loan before filing for any judicial or non-judicial foreclosures. What is loss mitigation? A department within the mortgage company that helps resolve loans in default and attempts to avoid foreclosure. A servicer must inform and provide loss mitigation options available to the homeowner within a certain timeframe of delinquency. The foreclosure timeframe can vary depending on circumstances and time is definitely of the essence.
Currently, due to COVID-19, the CFPB (Consumer Financial Protection Bureau) is proposing a rule for mortgages that qualify under the CARES Act, allowing for avoidable foreclosures. The rule would provide for a temporary COVID-19 emergency pre-foreclosure review period that would prohibit servicers from making first notice on judicial and non-judicial foreclosures until after December 31, 2021. In addition, it would allow for a streamlined process on COVID-19 related loan modifications. And, proposes early intervention to ensure servicers are communicating timely and accurately about the homeowners loss mitigation options.
Federal regulators have clearly stated to lenders any borrower receiving forbearance under the CARES Act can not require any skipped payments to be made in a lump sum once the forbearance period ends.
Below is an excerpt from a small guide I put together for individuals seeking information or help regarding home foreclosure in Georgia. You can get a free copy of the guide here.
Many homeowners are unaware Georgia is a non-judicial, title theory state, without the right of redemption after a foreclosure sale.
What am I trying to convey you ask? In a nutshell, Georgia is a non-judicial state, meaning, a lender can foreclose on a property without filing suit or appearing in a court before a judge. The state recognizes by law, the right of a lender to hold bare legal title on a property until the promissory note is paid in full. If a loan goes into default and the property is sold at auction, the homeowner DOES NOT have the right of a statutory redemption. Once your home is sold, you can not redeem it back.
Before a lender can accelerate a defaulted loan, Georgia law requires the lender to notify the homeowner at least 30 days prior to the date of the foreclosure sale. The letter (breech letter), allows for the homeowner to cure the default to avoid foreclosure. If there is no cure, the holder of the note, by law, must publish a public notice in the official county newspaper, where the property is located, for four consecutive weeks prior to the scheduled foreclosure. The sale would take place on the courthouse steps in the county of the property, the first Tuesday of the month between 10:00 am and 4:00 pm. The winning bidder would become the new owner of the property. (Refer to the Official Code of Georgia, Sections44-14-162 through 44-14-162.4)
If you are going through a foreclosure or looking to discuss short sale options, contact me for a free consultation.