Facing Foreclosure? Be Prepared for What Comes After the NOD. (#8 in a series)

What Comes After the NOD?

Many of my blog readers have asked why the Georgia foreclosure process happens so fast. The only answer I have is...because our state law is set up that way -- to favor the lender, not the borrower. That's why it is so imperative that Georgians contact their lender and an experienced real estate professional as soon as they begin having trouble making their mortgage payments.

The Georgia foreclosure process begins when the homeowner fails to make payments of the money due on the mortgage at the appointed time. Proceedings typically start with a formal demand for payment which is usually a letter issued from the lender. This letter of notice is referred to as a Notice of Default (NOD). In Georgia, the lender will issue this notice when the homeowner has been 30 days or more delinquent on the mortgage payments. 

Every Georgia mortgage holder needs to understand that the Notice of Default is a threat to sell your property, terminate all your rights in the property and evict you from the premises.

In Georgia, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. Judicial , or in-court, proceedings are not common, but an out-of-court, non-judicial foreclosure in Georgia can be completed in less than two months.  The process period may be a short as 37 days, with the sale publication occurring in 32 days. Also -- and this is very important -- there is no right of redemption, therefore no redemption period in the state of Georgia. Here is what you need to know about both types:

Foreclosure by judicial sale is available in every state and is the required method in many. Unfortunately, Georgia is not one of these. I say "unfortunately" because, in a judicial foreclosure, the homeowner has more time and more recourse to resolve his situation and possibly save his or h home. First, a lawsuit must be filed by the lender to obtain a legal order to foreclose. All parties must be notified of the foreclosure, and then there will be a hearing or trial. The homeowner has an opportunity to plead his case before a judicial decision is made. Generally, if the court declares a foreclosure, the property will be sold or auctioned under the supervision of a court, with the proceeds going first to satisfy the mortgage, and then to satisfy other lien holders, and finally if anything is left it will be distributed to the mortgagor. 

The second type of foreclosure is non-judicial, or foreclosure by power of sale as we previously discussed, and is the type of foreclosure most prevalent in Georgia. This type of foreclosure involves the sale of the property by the mortgage holder without the supervision of a court of law. Lenders, of course, favor foreclosure by power of sale for it's expedience and cost-effectiveness. Again, proceeds from the sale go first to the mortgage holder, then to other lien holders including second place mortgagees, and finally to the mortgagor if there is anything left to disburse. 

Georgia Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. A foreclosure notice must be mailed by certified mail, return receipt requested to the borrower no later than 15 days prior to the date of the foreclosure sale. The time period begins the day the letter is postmarked. The notice must be mailed to the address given to the lender by written notice from the borrower. No waiver or release of the rights to notice is valid if it was signed at the same time as the original documents.
   
   The notice must be published in a newspaper of general circulation in the county where the sale will be held once a week for four (4) weeks proceeding the date of the foreclosure sale.
2. The sale must be made by public auction on the first Tuesday of the month between 10:00 am and 4:00 p.m. at the courthouse.

A third and lessor-known type of foreclosure may be negotiated when a borrower becomes unable to continue making mortgage payments. It's known as "voluntary foreclosure", a "deed in lieu of foreclosure," or "strict foreclosure". In this case, the borrower negotiates with the lender to "give back" the property back in full satisfaction of the debt. 

For more in-depth information and free reports on this and related subjects, visit http://AvoidGeorgiaForeclosure.com