There are two types of states when it comes to mortgages and foreclosure, Judicial and Non-Judicial states. When you buy a house in a Judicial State, the bank gives you title to your house. If you do not make the payments and you go into default, the bank has to sue you in court to foreclose on your house. The entire process takes 6-12 months. It starts when then bank files a document called a Lis PendenS.
When you buy a house in a Non-Judicial state, a trustee (the bank) holds the deed to your house, similar to an auto loan. They do not have to sue you to foreclose and get the house back. They hold the deed and they can just take the house back. The entire process in incredibly fast once started. The time period for a bank to foreclose in a Non-Judicial State is about one month. Unfortunately, Georgia is a Non-Judicial State.
With a Non-Judicial state such as Georgia, you sign a Promissory note and a Security Deed when you buy your house. The Promissory Note is where you promise to make payments on the loan you are taking out. The Security Deed, which is also referred to as the mortgage, is where you give the bank the legal right to take away your house if you fail to make the payments. This process is called a foreclosure. Make sure to read both the Security Deed and the Promissory note; they spell out exactly what you’ve agreed to from a legal standpoint.
Once the foreclosure process is started in Georgia, the bank will send you a notice of its intent to foreclose. The bank will usually do this once the mortgage is 5-7 months past due. The notice of intent to foreclose will be issued 30 days prior to the foreclosure sale. The notice of intent to foreclose is required by law to be in writing and include the name, address, and telephone number of someone who has the authority to negotiate, amend, and modify the terms of the mortgage. At this point it is usually going to be from the law firm that the mortgage bank hired to process the foreclosure. Common law firms in Georgia are Aldridge Pite, Brock and Scott, McCalla Raymer, and Rubin Lublin to name a few.
At this point your house is scheduled to be sold at public auction. The foreclosing attorney is required to advertise and publish the foreclosure sale in the local newspaper for 4 weeks in a row. For most counties in Georgia, the mortgage bank is going to publish the ad in the local/county newspaper in the Legal section of the Classified Ads. Usually this can be found on the newspaper’s website without a subscription. Fulton County does use a 3rdparty website called www.law.comand the DeKalb County newspaper does charge a subscription fee to view the ads online.
In Georgia, the foreclosure sale happens on the first Tuesday of every month starting at 10:00. It is usually on the court house steps, but the location can very. Hall County moved their location from the court house steps to a conference room in their government center. The only exception on the sale date is if the first Tuesday of the month falls on January 1stor July 4th. In that case, the sale will be held the following Tuesday.
Once the sale starts, investors will make bids for your house. The bank usually has a minimum amount they will take. If that minimum is met, then the bank will issue the investor who buys your house a foreclosure deed. If the minimum amount is not met, then the title to your house will revert back to the bank. Regardless, at this point, you no longer have legal right to live in your house. The new owner, whether the bank or an investor, will file a dispossessory action (eviction) with the local courthouse. The new owner must give you a 24-hour notice that they are filing for eviction. Once the eviction is granted, you must leave the property. If you fail to leave, then the local sheriff’s department will force you to move out. They will allow the new owner to set all of your belongings on the street curb and change the locks.
Non-Judicial states can be unfair to the homeowner. The State of Georgia is choosing to side with the banks, not the home owner. If Georgia were a Judicial state, homeowners would have 6-12 months to figure out what they are able to do instead of 4 weeks. In a Judicial state, you own your house, not the bank. The bank has to sue you to get the house back. Homeowners have a lot more rights in Judicial states. The process in a Judicial state starts when the bank files a document called a Lis Pendens, which is Latin for “suit pending”. The bank has to sue you and prove in a court of law that you are in default of the mortgage.
But in Non-Judicial States or Deed of Trust States such as Georgia, the banks don’t have to prove anything. They just take the house back. There are lots of resources available if you feel you are being foreclosed on unjustly. We have several of them listed on our website here, Foreclosure: What Are My Rights? Banks will typically start the foreclosure process once the homeowner is 5-7 months behind. If you find yourself 60-90 days behind and you’re not in a position to be able to catch up, I would start planning on where you are going to move. Because once the foreclosure is processed, you lose your house in 4 weeks. 4 weeks is not a lot of time to figure out where you are going to go or what you are going to do.
