Sara Hibbard
sara.hibbard@metrobrokers.com
(o) 404.843.2500
(d) 770.399.8108
(c) 404.660.2481
(f) 770.924.5206
Service You Deserve. An Agent You Trust.
Foreclosures

Understanding the Foreclosure Process
Foreclosures have been steadily increasing over the past several months in many American cities.  Some of the cities with the highest concentration of foreclosure properties include but are not limited to Los Angeles, Miami, Detroit, Phoenix and the list goes on and on.   To learn how to avoid Foreclosure click on Tips To Avoid Foreclosure.  To learn more about purchaseing a Foreclosure property click on Buying A Foreclosure Home.

There are many reasons why homes go into foreclosure.  One of the most important reasons recently is the so called sub-prime mortgage mess.  This occurred because during the Clinton administration many banks relaxed their lending guidelines and best practices.  The Clinton administration wanted more people to be able to afford and qualify for home ownership.  A lot of people who would otherwise not be able to buy a home were able to buy a home over the past few years because of these relaxed guidelines.  

Unfortunately, most of these people bought more home than they could afford  -- they got mortgages they could not afford to pay either.  A lot of these mortgages were adjustable rate mortgages.  The payments on these loans were initially very low however, the loan payments increased dramatically as the interest rates adjusted upwards over time.   These home buyers could not afford to pay their mortgages and eventually were forced into foreclosure.

The foreclosure process in the state of Georgia is pretty straight forward.  There are two types of foreclosure processes:  (1) judicial, and (2) non-judicial.  Georgia uses the non-judicial method.  The procedure is very fast.  A homeowner in Georgia may lose his home in as little as 30 days if he fails to make a mortgage payment on time.  When this occurs the bank may make only one request that the homeowner pay his mortgage.  When the home owner fails to comply, the bank publishes a notice in the local newspaper that they are ready to foreclose on the property.  The bank is required by Georgia law to publish this notice for four consecutive weeks before the actual foreclosure date.  If the home owner does not come up with the money to pay the loan within this time the bank has the right to go to court and sell the property at the court house steps to the highest bidder.  Some banks succeed in selling the home quickly, however, most banks end up buying their property back.  The property now becomes what is known as an REO property -- Real Estate Owned By A Bank.

The bank now begins to work with a real estate broker who specialize in listing REO properties.   Typically, the REO homes are initially listed at "market value".  The banks believe "fair market" value is appropriate.  To the savvy home buyer this is occasionally a very good deal, however, you must know what you are doing and you must work with a good real estate agent to help you through the process.

I have worked with Buyers in purchasing many foreclosure properties.  One word of advice -- Buyer Beware! Foreclosures are not for everyone!  Many people think they can enter the housing market by purchasing a foreclosure property.  These are usually the folks who should not be purchasing a foreclosure.  If you are in a hurry to own a home, or if you are one to stress over situations that may not always go your way, I would also likely advise against the foreclosure arena.  If you are not an Investor, you may be better off buying a home the traditional way.  It is important that you remember that not all foreclosures are good deals.  Regardless, please call me to discuss the foreclosure process or particular foreclosure properties that interest you.

I look forward to assisting you down the foreclosure path when the time is right for you! 
 Metro Brokers/GMAC Real Estate, Atlanta, GA. A licensed real estate broker in Georgia, North Carolina, South Carolina and Tennessee. Equal Housing Opportunity © 2009 GMAC Home Services, LLC. An Independently Owned and Operated Firm. GMAC is a registered trademark of General Motors Acceptance Corporation.