2015 Foreclosure Trends in Georgia

In the wake of additional financial regulation and agency enforcement of settlement agreements, mortgage companies have to be very careful to make sure that there documents are in order before commencing a foreclosure proceeding.  This is especially true if the loan has been assigned or transferred to another mortgage company or servicer.  Sometimes a loan will be transferred multiple times, creating an indecipherable paper trail which further complicates the efforts of the lender to verify title, payment history and default.  Finally, some lenders are required to consider loans for modification or short sale as a prerequisite to foreclosure.  The net effect is that the time period between default and foreclosure has lengthened considerably in Georgia, which is something of which Augusta GA residents should be aware.

Georgia is a non-judicial foreclosure state, meaning that there is no judicial oversight unless the homeowner seeks a stay or injunction.  This means that normally a foreclosure can be accomplished very quickly – usually within 3-4 months – and without significant legal expense.  For a long period of time, being over 3 months behind would immediately prompt a default and acceleration letter.  But with the issues identified above, it is not uncommon for some borrowers to be 12 months behind or longer before a foreclosure is initiated.  While this may benefit some homeowners in the short term, the long-term consequences are that they will be faced with a reinstatement amount which may be unmanageable, especially if they have not been setting aside available funds.  A common mistake is that homeowners will not make payments while a loan modification is pending – at the lender’s request –but not retain the money in reserve in the event that the loan modification is denied.  If a homeowner was to file a Chapter 13 case to stop the foreclosure and catch up the arrearage, they could be faced with a Chapter 13 payment that may not be affordable.  Some borrowers may interpret the delay as a sign that the mortgage company is not really interested in foreclosing on the property, and will concentrate their funds on payment of more immediate debts.

If you are behind on your mortgage payments, you may want consult with a bankruptcy attorney.  Waiting until the last minute could be fatal to your home ownership, or could result in a delinquency that may exceed the relief that a Chapter 13 can provide.  In addition, a consultation may serve to warn you about foreclosure scams to avoid, and what to expect from the loan modification process.  Finally, such a consultation may allow a homeowner to realize that “walking away” from the property is the best financial option, especially if more money is owed on the property that what it is worth.  If you recognize your mortgage situation in this article, seek the counsel of a bankruptcy attorney.