How to Avoid Foreclosure in Georgia

How to Avoid Foreclosure in Georgia

There are a variety of ways to avoid foreclosure on your home in Georgia including refinancing, filing bankruptcy, paying your delinquent balance, getting potential government help, and selling your house for cash. If you cannot pay your arrearage (amount due), it’s critical to do everything in your power to prevent foreclosure because of the significant negative impact it can have on your credit history and ability to get a loan on a house in the future.

Nobody wants to foreclose on their home. We all want to repay our debts, right? But sometimes, things happen that are simply out of our control. Someone in your family may become ill or get severely injured. Or you may lose your job because of unforseen circumstances.

Foreclosure is the legal way for your lender (aka the current loan holder or creditor) to repossess or take over your home if you don’t or can’t keep up with your mortgage. But foreclosure can cause tremendous harm to your credit history. So you have to know your options and how you can get some help to stop it from happening to you and your loved ones.

This article discusses essential information on how to avoid foreclosure in Georgia and protect your credit history. But before we dive into the specifics, let’s first go over the basics of the foreclosure process and if banks can foreclose right now given the pandemic situation.

Basic Foreclosure Process in Georgia

Within 36 days of missing a payment, your lender will call you to discuss loss mitigation options (e.g. loan modification, forbearance, and repayment plans) available to help you avoid foreclosure.

If you don’t take any action to stop the foreclosure process from proceeding, then within 45 days of missing your payment, your lender will then mail you an official notice of default. This letter will spell out in detail your loss mitigation options and ways to avoid foreclosure. 

After 120 days, your lender will issue you a notice of intent to sell your home (called a preforeclosure breach letter) at a public auction.

During the time after you fall behind in payments, but before the actual foreclosure sale of your home—the period most call the “preforeclosure” stage—your lender can charge you various fees including late charges and property inspections fees. If you don’t pay these fees and square up with your mortgage payments, your credit will take a beating.

Can banks foreclose right now?

COVID-19 has had widespread effects on economic and public health conditions. Quarantines, social distancing, illness, school and business closures, among a host of other factors have resulted in significant losses in income, record numbers of unemployment claims, and housing insecurity for millions.

In response to these unprecedented challenges, banks have offered an array of programs to help individuals and business customers affected by the pandemic. Some banks have even paused foreclosures on homes and delayed new repossession activities.

But for the most part, homeowners are still on the hook for paying their mortgage to avoid foreclosure. So what happens when keeping up with your payments becomes an issue? How can you keep your house out of foreclosure?

How to get my house out of foreclosure?

The worst thing you can do once you realize you’re having issues paying your mortgage is to ignore the problem. The further behind you get on your payments, the more likely you are to lose your house. So prioritize your spending and get to know your mortgage rights.

We’ll go into some more detail about your rights and ways to avoid foreclosure in a minute. But, in general, you typically have the following rights, at least in a Georgia foreclosure. You have the right to:

  • preforeclosure breach letter.
  • apply for loss mitigation.
  • receive a foreclosure notice.
  • get current on the loan.
  • receive special protections if you’re in the military.
  • pay off the loan to prevent a sale.
  • file for bankruptcy.

It’s also super important to have an open and honest relationship with your lender so be sure to contact them and respond to all of their communications. Explain your situation. You should also be prepared to provide them with financial information, such as your monthly income and expenses.

And, of course, get to know your options to prevent foreclosure.

Avoiding Foreclosure Options

Loans to stop foreclosure

If you’re a bit behind on your payments, you may be able to avoid a foreclosure on your home by refinancing at a better rate and then paying off your old loan. By law, you have the right to “redeem” your mortgage by refinancing up until the foreclosure sales date.

Some states even let you redeem after the sale. In Georgia, however, you don’t get a post-sale redemption right after a nonjudicial foreclosure.

Can I stop a foreclosure by paying the past due amount?

Your lender will typically send you a notice of default when you’re in preclosure, giving you an opportunity to become current with your mortgage payments.

The lender will set a deadline for you to rehabilitate the loan. Paying the past due amount will stop the foreclosure in this situation. But if you don’t or cannot pay your delinquent balance, your lender can and likely will proceed with foreclosure.

Paying off the arrearage (amount due) when you get the initial notice is so essential if you have the means to do so, because you won’t yet be responsible for major foreclosure fees and lawyer costs.

Filing bankruptcy

You can sometimes save your home by filing Chapter 13 Bankruptcy to get an “automatic stay” in states across the country including in Georgia. Alternatively, you can file a Chapter 7 bankruptcy if you want to buy some time by stalling the foreclosure.

Even if you file bankruptcy, you’re still generally on the hook for future mortgage payments and your bankruptcy plan payments. You must also prove that you can repay the arrearage (money owed) and costs related to the foreclosure (e.g. late charges, foreclosure lawyer fees, property inspections, appraisal fees, and property preservation costs).

Related Article: Selling House Chapter 13 vs. Chapter 7

Government Help

There are certain protections for homeowners with a federally-backed mortgage such as foreclosure suspensions and extensions. Also, many state governments have temporarily prohibited lenders from filing new foreclosure cases. But these housing protections vary by state and are changing rapidly. For most folks, there isn’t much leeway to avoid foreclosure.

For example, Georgia hasn’t issued any statewide policy to suspend foreclosures. Instead, foreclosure decisions are left up to local courts and individual mortgage lenders in Gerogia. So, in short, many homeowners in Georgia and across the country have been left without access to “stop foreclosure government help.”

Sell your home for cash

Selling to a cash buyer allows you to quickly exit your home without going through a foreclosure and taking a lasting hit on your credit history.

But there’s some good news for folks living in cities like Atlanta where it’s a seller’s market. You can usually get a great deal from home buying companies like JWS Acquisitions that’ll pay top dollar for your property. Even though Georgia was among the top 10 states with the highest foreclosure rates in 2020, you can still get a good cash offer on your home because there are, in general, less properties available than market demand.

Selling your home for cash also means you won’t have to worry about the hefty costs related to the foreclosure such as lawyer fees, inspection charges, appraisal fees, and property preservation costs.

How to avoid foreclosure with bad credit

It’s challenging to avoid foreclosure if you already have bad credit because refinancing becomes such a hurdle.

If you have bad credit because of too many late mortgage payments or a pending foreclosure, we can’t stress enough the importance of doing everything in your power to avoid foreclosing on your home. Again, this is because it’ll lower your credit score even further – MUCH further.

It can lower your credit score so much in fact that it may take several years before you can qualify for new credit or loans.

When is it too late to stop foreclosure?

It’s too late to stop foreclosure once the house deed is signed over to a new homeowner.

As long as the deed has not been transferred to someone else, you can stop the foreclosure of your home at any time, including on the date of the actual public auction. The house deed is the written document that shows who owns the actual property. It’s basically like a mortgage.

What’s Important to You in the End?

When it comes down to it, what’s more important: saving your credit or saving your home? You can always get a new roof over your head, but a foreclosure can haunt your credit report for seven years, give or take.

Just a few of the downsides of bad credit include having high interest rates, difficulty getting approved for a loan or apartment, higher security deposits and insurance premiums, getting denied for employment, the list goes on and on.

So if you’re out of options, it may be best to consider selling your house before it’s too late. That way, you can at least get back the cash for what you’ve already paid.

Want to see how much cash you can get for your house? We provide free cash offers in Atlanta. We’re big on building our long-term portfolio, so we aim to give you the best deal based on the current market.