Here in Georgia, as many of you know, has a very large foreclosure market - - mainly in metro-Atlanta, where the lion's share of HomeOwners live (at/near 4 million people). Indeed, metro-Atlanta has more than 3,000 Notice Of Foreclosures published each month in the 13-county area, which offers far more REI opportunities then anyone can handle. Part I of this Foreclosure series explores the pre-foreclosure housing market:
A foreclosure in Georgia is a non-judicial process and all HomeOwners who borrow funds to purchase real property are required (by their lender) to sign a "Waiver of Borrower's Rights" at the closing table. This document notifies the HomeOwner that the lender can recover their secured interest in the real property by non-judicial foreclosure, if the HomeOwner does not abide by the terms & conditions of the Promissory Note (or Security Deed). Recall, also, that Georgia uses a Warranty Deed to document who owns the property and a Security Deed to document who owes the money. Both documents are recorded in the Deeds Record room in the county where the property is located and both are public records. Many metro-Atlanta counties have web sites where the general public can access these deed records online.
When a HomeOwner (or borrower) has missed one or more mortgage payments, their lender will notify the HomeOwner that their loan is "in default" and demand payment within a short period of time (usually 10 to 30 days). If the HomeOwner does not make-up those back payments (plus late fees & accrued interest), the lender can/will retain a local attorney (e.g.: McCalla Raymer) to start the foreclosure process. In most cases, the lender will allow the HomeOwner to miss at/near three (3) monthly mortgage payments before they start the foreclosure.
The local attorney, acting in behalf of the lender, will also contact the HomeOwner (via certified mail) to let them know that they plan to start the foreclosure process and, again, demand payment (including attorney's fees) from the HomeOwner.
By Georgia law, a "Notice of Foreclosure" against the HomeOwner is published in the county's legal newspaper for four (4) consecutive weeks prior to the first Tuesday of the next month. This Notice tells all interested parties that the HomeOwner's loan is "in default" and the lender plans to secure their interest by auctioning the real property on the courthouse steps to the highest bidder. This public auction occurs on the first Tuesday of the month following the 4-week advertisement and the successful Buyer must bring "all cash" or certified funds to the auction - - for the entire sales price.
This (pre-)foreclosure process in Georgia lasts only 26 days from the first Notice Of Foreclosure to the final courthouse auction date. During this time, the HomeOwner must be contacted, informed of their options, and (hopefully!) encouraged to sell their home quickly, at a price which is often well below Fair Market Value. In most cases, the home often needs "carpet & paint" and other differed maintenance, so the typical Buyer is a real estate investor, and not the Buying Public. If there is also little equity in the property, their lender can be approached for a "short sale" of the mortgage loan. If the lender is contacted well-before the auction date, and believes all parties are working to sell the house, the lender will usually grant a "stay" (= postpone), thereby allowing the HomeOwner and their real estate agent to contact potential Buyers (= investors) to submit offers to purchase the property.
In the next installment of Atlanta Foreclosures, we will explore the "short sale" more thoroughly during the pre-foreclosure process. Subsequent installments will discuss the actual foreclosure event in Georgia, and then the post-foreclosure opportunities for real estate investors in the metro-Atlanta housing market.
As a real estate agent, Bob works with HomeOwners who face foreclosure and targets REO properties located in the northwest suburbs of metro-Atlanta, and with real estate investors as their Buyers. If your current REI market is financially unattainable (prices too high? does not cash-flow?) or has experienced downward pressures, consider investing in Atlanta - - you'll be glad you did! Call Bob Garvey at 678-445-5544 or e-mail him at anytime, to discuss your REI strategies. We look forward to hearing from you!
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