The time for negotiation has passed. You have exhausted other options and determined it is time to foreclose on the property to recoup what you can. While not simple, foreclosure will ultimately allow you to take back the property, in order to help resell it, hopefully to a more solvent buyer.
There are many details that your credit representation attorney will oversee to get you through this process. Once you have gathered all of the documents, an attorney will need time to verify information related to each of them. Here is a high level overview of the procedures and how the property gets to foreclosure.
Analyzing the potential monetary impact
Using the proper documentation, including the payment history of the loan, a principal balance of the loan and the arrearage (current past due amount) will help determine the actual debt and the amount past due. In addition, each of the following documents requires review by your creditor representation lawyer.
The Promissory Note
This is a legal document that includes information about how the loan was to be repaid. Your attorney must confirm that the note is valid and review other provisions in the note to insure they are properly followed.
The Security Instrument
In order to begin the foreclosure process, your attorney must thoroughly review the security instrument, typically the Deed to Secure Debt or Security Deed. The document must include language that allows non-judicial foreclosure. In addition to verifying that all of the parties listed are correct, your attorney will determine if a default notice is required before proceedings can begin. There may be language determining rights of the borrower, related to timing of notices, how notices are sent, and options for payment within a given period of time, to reinstate the loan.
Default Provisions
In the State of Georgia, there are different types of defaults, four of which are as follows. 1. The borrower fails to pay the lender. 2. The borrower fails to pay property taxes or allows the insurance on the property to lapse, 3. The borrower transfers the ownership of the property to any other entity. 4. The borrower sells the property without authorization from the lender.
Your attorney will need to review the borrowers payment history and scrutiny must be paid to confirm that there has actually been a default under the promissory note and the security instrument. In addition, your attorney will thoroughly view all of the documents to avoid a myriad of other complications.
Title Search
A title search should be conducted to confirm that there is not an additional lender and/or any other liens on the property. If the debtor has taken out a second or third mortgage, it is possible the proceeds of the foreclosure would pay off the first debt ahead of your claim, resulting in you not receiving full payment. It is also possible that other liens already exist. By checking the General Execution Docket (GED) your attorney will determine if there are liens that must be paid off before the property could be sold after foreclosure. There are also additional requirements if the IRS has placed a federal tax lien on the property. Your attorney will also want to check with the County Superior Court with jurisdiction over the foreclosure to ward against other issues.
The investigation phase is complete
Once the research and document review has been completed, your attorney can help you proceed through the foreclosure process and ultimately execute the foreclosure by putting the property up for sale in order to regain as much as possible financially. Mark Walker is an experienced Foreclosure Attorney. Our attorneys can help you negotiate a solution before the only alternative is foreclosure. If it is too late for a negotiated settlement, Hecht Walker attorneys can guide you through the entire foreclosure process.
About Mark Walker
Mark Walker has handled thousands of commercial foreclosure cases in his career. If you have sold property and have any concerns about the borrowers ability to pay, contact Hecht Walker as soon as there are warning signs.