In Georgia foreclosures have increased dramatically over the last two years. The same is true of states throughout the United States. The increase in foreclosures is due in part to poor performance of all economic sectors. Another major reason for an increasing number of foreclosures is the increase in the number of risky mortgage loans approved over recent months.

Many recent loans were too high. In the rush to get people into home ownership, some loans were structured so the payments were at the top borrowing limit. The only way that the borrower could be approved is for some assumptions to be made about continued salary levels with no blips on the radar of earnings. If a job loss by a borrower happened or a few days of illness resulted in a smaller pay check, there were no reserves to continue to pay mortgage payments.

Some of these creatively structured loans allowed the borrower to make smaller payments than needed to cover the principal and interest. The difference is added to the principal so that at the end of the short preliminary period, the borrower may owe more than when the loan began. Under the original terms, the assumption was made that two years of good payment history and a normal increase in salary would allow the borrower to refinance the mortgage for the larger payment amount. In practice, poor economic growth, dropping housing prices, and job losses all conspired to make the borrower an even poorer mortgage loan risk. Refinancing is often no longer an option.

Faced with a larger loan, no equity in the home, poorer credit and dropping house prices, many borrowers can not afford payments. They can’t refinance due to their credit score. They can’t even sell the home without taking a loss. Default on the loan is almost inevitable.

As unemployment rates increase and more companies close their doors, foreclosures have ballooned. Foreclosure is the name given to the process of a lender taking the property back when the borrower defaults on mortgage payments. Georgia recognizes both judicial and non-judicial foreclosures.

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.

The next step is to post a foreclosure sale in the local newspaper for a period of four weeks prior to the sale date. The prescribed date for a foreclosure sale is on the first Tuesday of each month. The sale begins at ten am and is held at the county courthouse. Cash to pay for the sale is due immediately from the winning bidder.

Within five days after the sale, a court ordered hearing must be held to confirm the validity of the sale. If the market value of the home is not received, the court can order a new sale. The buyer has no further rights to the property.

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


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