Foreclosure

http://www.georgia.gov/00/article/0,2086,43414745_46389324_73902873,00.html

Take these steps:

• Do not ignore the letters from your lender. If you're having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help.
• Stay in your home for now. You may not qualify for assistance if you abandon your property.
• Contact a HUD-approved housing counseling agency. Call 1-800-569-4287 or TDD 1-800-877-8339 for the housing counseling agency nearest you. These agencies are valuable resources.

They frequently have information on services and programs offered by government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.

http://www.hud.gov/foreclosure/index.cfm
The guidance at the link above on HUD’s website is applicable to homeowners with FHA Insured loans. While a good deal of this information may apply to all homeowners in danger of losing their homes, not all of the foreclosure avoidance tools mentioned may be available to you if you have a VA or conventional loan.

For Military Personnel, see also Servicemembers Civil Relief Act

Fannie Mae, a government–sponsored enterprise, which buys home loans from lenders in the secondary mortgage market, has launched a new website to assist borrowers, who are having difficulty meeting their home mortgage obligations.  The website, named “Know Your Options,” provides a wealth of information for all borrowers, whether or not Fannie Mae owns your loan.  You can visit the site at http://www.knowyouroptions.com/.

Changes to Georgia Law Regarding Foreclosure Process

On May 13, 2008 Governor Sonny Perdue signed into law Senate Bill 531. The bill increases the notice to a homeowner before a lender can foreclose.  SB 531 lengthens the notice period from 15 days to at least 30 days prior to the scheduled foreclosure sale. 

SB 531 also requires that the certified letter giving the homeowner notice of the foreclosure sale include the name, address, and telephone number of the “individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor.” This provision of the bill is important because when homeowners are negotiating with their servicers, they often do not know what entity actually owns their loan. Sometimes a servicer will refuse to offer the homeowner a loan modification or other workout, claiming that they lack authority to do so. If the homeowner wants to reach the company that ultimately has the authority to accept any workout agreement, or if the homeowner wants to pursue a legal claim related to their mortgage loan, he or she needs to know the identity of the current holder of the mortgage loan. This bill requires that identity to be disclosed.

Lastly, SB 531 requires that the current holder of the mortgage loan record the assignment of the security deed, which shows the present owner of the mortgage loan, in the public deed records before conducting the foreclosure sale.   The bill became law and was effective July 1, 2008.  For a copy of SB 531 go to: http://www.legis.ga.gov/legis/2007_08/fulltext/sb531.htm

HOPE PROGRAM

To help combat the rise in foreclosures in metro Atlanta,  the Consumer Credit Counseling Service of Greater Atlanta, the Fannie Mae Foundation, the Homeownership Preservation Foundation, NeighborWorks America, and the United Way have joined together to provide free counseling to Georgia homeowners to provide consumer education and to prevent home foreclosures.  The Federal Reserve Bank of Atlanta, Georgia Department of Consumer Affairs, Georgia Department of Labor, and a number of mortgage lenders have also partnered to promote the HOPE campaign.

The HOPE program is a foreclosure prevention program and consists of a toll-free 1-888-995-HOPE hotline supplemented by face-to-face counseling provided by local NeighborWorks organizations.  The hotline is staffed 24 hours a day, 7 days a week, by counselors, who provide free, confidential advice for those facing foreclosure.  Homeowners who want or need in-person counseling will be referred to organizations throughout the metro area.  Counseling is available in English and Spanish.

Related Information:

The National Association of Realtors®, in partnership with the Center for Responsible Lending and NeighborWorks America, provides a brochure on how to avoid foreclosures. “Learn How to Avoid Foreclosure and Keep Your Home”  This brochure provides examples of mortgages that can put certain borrowers in danger; cautions consumers about predatory lending practices; identifies housing counseling organizations and other resources; and suggests steps homeowners should take as soon as they think they might not be able to make a monthly mortgage payment.

Internal Revenue Service Foreclosure Resources

The Internal Revenue Service has a special section on IRS.gov for people who have lost their homes due to foreclosure.

The IRS has also reassured homeowners that although mortgage workouts and foreclosures can have tax consequences, special relief provisions can often reduce or eliminate the tax bite for financially strapped borrowers who lose their homes.  Details are in the attached news release and on IRS.gov. 

The Internal Revenue Service is encouraging mortgage and real estate licensing agencies to assist in making this information available by posting on their webs or providing it to their customers by other means.

IR 2007-159 – The news release IR 2007-159 provides additional background.  The news release and Frequently Asked Questions (FAQs) can also be found at:  http://www.irs.gov/newsroom/article/0,,id=174022,00.html

The direct link to the FAQs is: http://www.irs.gov/newsroom/article/0,,id=174034,00.html

Mortgage Workouts, Now Tax-Free for Many Homeowners; Claim Relief on Newly-Revised IRS Form

In Georgia, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of

sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.

Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

A foreclosure notice must be mailed by certified mail, return receipt requested to the borrower no later than 15 days prior to the date of the foreclosure sale. The time period begins the day the letter is postmarked. The notice must be mailed to the address given to the lender by written notice from the borrower. No waiver or release of the rights to notice is valid if it was signed at the same time as the original documents.

The notice must be published in a newspaper of general circulation in the county where the sale will be held once a week for four (4) weeks proceeding the date of the foreclosure sale.

The sale must be made by public auction on the first Tuesday of the month between 10:00 am and 4:00 p.m. at the courthouse.

Lenders may seek a deficiency judgment in Georgia.

http://www.foreclosurelaw.org/Georgia_Foreclosure_Law.htm

Note...in a lot of cases right now mortgage companies on occasion will not have the necessary paperwork ie the deed in hand in their possession.

To make sure if they do or don't if you are in doubt of this send a letter or RESPA to your mortgage lender requesting a copy of your file and all necessary paperwork including a copy of the deed with your original signature on it.

The following is a sample qualified written request from you, the borrower, to a lender. Use this format to address complaints under the Real Estate Settlement Procedures Act (RESPA). Be sure to read more about RESPA, and your rights under this Act, elsewhere on the RESPA site.

Attention Customer Service:
Subject: [Your loan number]
[Names on loan documents]
[Property and/or mailing address]

This is a "qualified written request" under Section 6 of the Real Estate Settlement Procedures Act (RESPA).
I am writing because:

• Describe the issue or the question you have and/or what action you believe the lender should take.
• Attach copies of any related written materials.
• Describe any conversations with customer service regarding the issue and to whom you spoke.
• Describe any previous steps you have taken or attempts to resolve the issue.
• List a day time telephone number in case a customer service representative wishes to contact you.