EVERYTHING YOU WANTED TO KNOW ABOUT PURCHASING A FORECLOSURE, BUT WERE AFRAID TO ASK!

I. THE BEGINNING:

A.  GEORGIA - “Title Theory State”….Borrower gives legal title to lender through the instrument known as “Deed to Secure Debt” at closing and lender actually owns the property until debt is paid.

B.  Borrower becomes behind on payments – Lender may move to declare the Deed to Secure Debt and Promissory note in default. Lender must make written demand upon buyer and sell on courthouse steps. Notice sent by lender to borrower’s last known address at least 15 days prior to date of sale. Lender must also post in legal organ for the county in which the property is located for 4 consecutive weeks.

C.  Sale is the FIRST TUESDAY of every month on 159 county courthouses throughout Georgia between 10am and 4pm.

D.  In situations where the foreclosure sales does not produce enough cash to pay the loan balance in full, lender can elect to obtain a personal judgment against borrower for unpaid balance. “Deficiency Judgement” must be brought within 30 days of sale or right is lost.

II.  ALTERNATIVES TO FORECLOSURE :

A.  First – NEVER IGNORE letters from the lender. Call or write the lender’s “LOSS MITIGATION” Department. Lender would prefer to work with you rather than take the property back – COMMUNICATE!

B.  “Special Forebearance” – Lender may be able to arrange repayment plan based on borrower’s financial situation. Borrower will have to provide financial information. Temporary reduction of payments is an example.

C.  “Mortgage Modification” – This works if borrower has recovered from a financial problem and can afford new payments by refinancing debt and/or extending term of the loan.

D.  Pre-Foreclosure Sale – try to sell before it goes to foreclosure sale!

E.  “Deed-In –Lieu of Foreclosure” – Last resort, borrower may be able to voluntarily “give-back” the property to the lender. Will not save house but not as damaging to credit rating as foreclosure.

III.  PROS AND CONS OF COURTHOUSE AUCTION PURCHASE:

A.  NOT the best avenue for the first time buyer!! Most bidders are Professional Investors who have done their upfront Due Diligence with teams of contractors and individuals searching title and determining values.

B.  BUYER BEWARE! Purchase at the courthouse steps also buys you any occupants in the home, title issues, liens and judgements! There is no inspection period, so you also can be buying unforeseen repairs including termites and mold!!

C.  Cash Sale – No financing!

IV.  PURCHASING A FORECLOSURE AFTER THE LENDER HAS TAKEN BACK AND IT IS NOW LISTED ON MARKET:

A.  Work with agent experienced in selling foreclosures (The Simpson REO Team, for example!)

B.  Get PREQUALIFIED – must have letter to begin working with any foreclosure! (Suntrust Mortgage! Rick Stevens or Richard Young!)

C.  Good News: Clear title with no liens at closing

D.  Good News: Inspection Contingency – Although, you woll be purchasing the property in “as-is” condition, you have right to inspect within a specified time limit and if not an acceptable inspection you may terminate and have your earnest money returned

E.  Good News: Financing Contingency – FHA and Down Payment Programs are accepted

F.  Many times repairs and rehab have been completed

G.  Vacant, cleaned and maintained

H.  Closing within 30 days of acceptance

FOR MORE INFORMATION OR ASSISTANCE, PLEASE CONTACT ME!

CINDY SIMPSON

SIMPSON REO TEAM

4648 WOODSTOCK ROAD, SUITE 250

ROSWELL, GEORGIA 30075

678-585-0070

404-217-9792 (CELL)