Will the foreclosure mess mean you’re ‘home free?’ What’s a Foreclosure Moratorium?
If you’ve turned on your television news, or picked up your newspaper you’ve likely read coverage of the moratorium on foreclosures that a few big banks instituted two weeks ago.
Most notably, Bank of America and Ally Bank (formerly GMAC) stopped foreclosures briefly via self-imposed moratoriums on foreclosures. Bank of America has since restarted foreclosures in states where a judge rules on their right to foreclose. B of A anticipates restarting foreclosures everywhere else once it ‘straightens out’ their evidence.
What does the moratorium on foreclosures mean to you if you own property that is at risk of foreclosure in Georgia?
First you must understand that Georgia is a non-judicial foreclosure state. Non-judicial means that there is no court review of your lender’s right to sue you to foreclose.
The foreclosure process in Georgia goes like this:
1. You default.
2. Your lender sends you a letter demanding you come current in 30 days, by accelerating your loan.
3. Your lender advertises your property for foreclosure for 4 weeks leading up to the sale date in the legal organ (newspaper) for your county.
4. Your property is foreclosed in a public auction on the court house steps of the county where the property is.
5. The sheriff executes a writ to evict you (if you’re still there).
6. Your lender files a motion to validate the foreclosure sale.
7. Your lender has six years to sue you on the deficiency.
John Adams (and AJC columnist and real estate guru) columned about this in his column “Georgia Foreclosures Swift and Sure.”
In Georgia foreclosures, there is no hearing and no judge reviews the lender’s right to foreclose (standing) or the amount in default. Your lender does not have to prove that you were served with notice of the foreclosure.
- Yes, there will be challenges to foreclosures mounted by homeowners whose property in states with judicial foreclosures. (Want to read more about that: Here’s an article published in the NYT on October 20, 2010-Big Legal Clash on Foreclosure Taking Shape.)
- Yes, there will be many homeowners who are able to delay the foreclosure sale by challenging the lenders’ standing and amount in default. No, Big Mortgage has not brought down the curtain on this issue. But no one thinks that the challenge will evolve into anyone in default being ‘Home Free’ forever (Want more on this: Here’s an article published in the NYT on October 19, 2010–Intermission, At Best, In Battle Over Foreclosures.)
- Yes, you may get solicitations from entities here in Georgia who say that they can offer you ‘foreclosure defense’ based on your lender’s crappy record keeping. (Want to read more about that: Here’s an article published in the WSJ on October 21, 2010 -Niche Lawyers Spawned Housing Fracas.)
But, I wouldn’t get too excited about any of these eventualities if I were you.
When the gears start grinding again, unless our state law changes, it will be business as usual on the First Tuesday of the Month. You may not want to rely on the possibility that Big Mortgage’s botched paperwork will save your house.
You can’t live in your house for free. I’m sorry.
Want advice about your options managing your debt and taking control of your finances through?
Call me Attorney Shannon D. McDuffie for advice about your mortgage, foreclosure, and bankruptcy. (404) 418 8879.