If you fall far enough behind on your mortgage payments in Georgia, the servicer—on behalf of the foreclosing bank—will most likely start a foreclosure, which is a state-specific legal process that ends when the home is sold to a new owner at a foreclosure sale.
Here’s a step-by-step explanation of what typically happens in a Georgia foreclosure. (For an overview of how foreclosures work, read Foreclosure and Your Home: Understanding the Process, Your Rights, and Your Options.)
Your Rights Under Federal Law After You Stop Making Payments
During the first few months that you're behind on the loan payments, the servicer usually must comply with specific requirements under federal law, including the following.
- The servicer must contact you (or make reasonable efforts to contact you) by phone or in person no later than 36 days after you stop making payments. The servicer also has to contact you again within 36 days after each subsequent missed payment.
- By the time you’re 45 days delinquent, the servicer has to assign someone to help you with the loss mitigation process. The designated personnel has to be available to you by phone and be able to tell you about the status of your loss mitigation application, if you submit one, as well as applicable timelines.
- In most cases, the servicer must hold off on officially beginning the foreclosure process until your loan is more than 120 days’ delinquent.
Georgia Foreclosures: Usually an Out-of-Court Process
Most foreclosures in Georgia are nonjudicial, which means the bank has to complete specific out-of-court steps detailed in state law before selling the property at a foreclosure sale. Foreclosures in Georgia can also be judicial. But because nonjudicial foreclosures are more common, that process is detailed below.
Notice of Intent to Foreclose
The bank mails a notice of intent to foreclose to you at least 30 days before the foreclosure sale. The notice includes the name, address, and telephone number of someone authorized to negotiate a loan modification. (Georgia Code Ann. §§ 44-14-162, 44-14-162.2).
Notice About Attorneys’ Fees
The bank also ordinarily provides a notice about how you can avoid attorneys’ fees if you pay the total outstanding debt (principal and interest) within ten days of the notice. (Georgia Code Ann. § 13-1-11). While the bank could send this information in a separate letter, it often accompanies the 30-day notice of intent to foreclose.
Four-Week Publication Requirement
Notice of the foreclosure sale must also be published in a newspaper for four weeks before the sale. (Ga. Code Ann. § 9-13-140).
The Foreclosure Sale
At the sale, bidding is open to the public, but the foreclosing bank is often the only bidder. The bank makes a bid on the property using a “credit bid.” With a credit bid, the bank gets a credit in the amount of the mortgage debt. The bank can bid up to the total amount owed, which includes fees and costs—or it may bid less. In some states, including Georgia, when the bank is the high bidder at the sale, but bids less than the total debt, it can get a deficiency judgment against the borrower. (To learn more, see Can the Bank Get a Deficiency Judgment After a Foreclosure in Georgia?)
But if a bidder, say a third party, offers more than you owe and the sale results in excess proceeds—that is, money over and above what’s needed to pay off all the liens on your property—you're entitled to that surplus money.
If you (the foreclosed borrower) don't move out after the foreclosure sale, the home’s new owner must first make a demand for possession and then can begin eviction proceedings.
While this article provides an overview of a typical Georgia foreclosure, keep in mind that federal and state foreclosure laws are complicated and timelines vary. If you want to learn more about the process, including how long it might take, or find out if you have any defenses to the foreclosure, talk to a foreclosure lawyer.
If you need help applying for a loss mitigation option or need more information about foreclosure alternatives, like a loan modification, a HUD-approved housing counselor is an excellent resource.