Hunter Ramsey's weblog

Buying a home that is in foreclosure is much different than buying one that is for sale by an individual or a property owned by bank.

A foreclosure is a process that allows the lender to repossess the home and later sale it to resolve a default on a property.

Why is Georgia Allowed to do a foreclose? The lender may take it back in form of Foreclosure, because the bank actually owns the property until the debt is paid in full and allows the Buyer to stay in the, use the, and occupy the home.

How is the title held?  Title is held in Georgia as Title in Theory. This allows the Buyer to give legal title to the lender as “Deed To Secure Debt” or “Security Deed”. By doing this the lender actually owns the property until it is paid in full.

How does the Bank actually take the property? The bank takes the property back by exercising the power of sale in the instrument used to secure the Debt or Non-Judicial Sale. The Bank must follows specific guidelines; First, declaring the buyer is in default, Second, The Lender must give Statutory Notice and third, the lender will attempt to sale the home on the court yard step on the first Tuesday of the month.

What are the Specifics of a Non-Judicial Sale? A Non-Judicial Sale works like this,The Buyer must be given written Notice fifteen days prior to the sale, Notice of Default and pending foreclosure must be run in the local paper for 4 consecutive weeks, The sale must take place The first Tuesday of the month between the hours of 10:00AM and :00 PM

How does the sale at the Courthouse actually work? The way the sale at the courthouse steps works is the sale is know as an Non-Judicial Sale meaning no hearing is required. After notification is given as stated above it is sold.

Who are the people that buy homes at the Courthouse? Buyers at the courthouse are people looking for a deal. People the understand the risk, and that have researched the homes first, ie. had the attorney do title searches, Lien searches, and if there are any second and third loans on the home.

How are the homes paid for? The home is paid for in full by winner (The one having the highest) in full immediately. The only one that is not required to pay in full is the lender.

 Can a foreclosure be cancelled? A foreclosure may be cancelled.

Why would the bank cancel a foreclosure? The Buyer worked out a plan to repay and the back accepted, The Buyer came up with the funds needed to stay in the home.

What happens if a foreclosure is cancelled? If a Foreclosure is cancelled it starts all over again. The Buyer must be given written Notice fifteen days prior to the sale, Notice of Default and pending foreclosure must be run in the local paper for 4 consecutive weeks, The sale must take place The first Tuesday of the month between the hours of 10:00AM and :00 PM.

What happens after the home is sold to the highest bidder? Once the home is sold to the highest bidder they may do what the wish with home. The highest bidder does not have to worry about previous home owner coming up with the money and wanting the house back.

Why does the highest bidder not have to worry about the previous owner wanting or getting the home back? The highest bidder does not have to worry because Georgia does not have “Right of Redemption” for a buyer once a home owner has been foreclosed.

What happens is the property does not sale on the court yard steps? If the property does not sale on the court yard steps? The properties go back to the lender holding the “Deed to Secure Debt”. Once the property goes back it is then call an “REO” or Real Estate Owned.

Are “REO” properties better than foreclosures? Yes and No. It depends on skill level. “REO” properties by contrast are less risky. Once the Lender gets the home back they will search the title for any liens on the property and negotiate to remove liens, write off Junior Mortgages, evict tenants (If required), pay Home Owner Association Fees not paid, clean and haul off debris left by the prior buyer. Ideally the Lender will get the home ready to be marketed by a Realtor.

In conclusion: Buying a Foreclosure on the courthouse steps should be left up the pros. When looking for a deal contact a Realtor and  look for “REO” properties. It will be a much cleaner deal. Homes that are “REO” are ofter reffered to foreclosures. Please do not be confused. The term is a generic term also. If the property is listed with a realty company it should be okay.