Going through a foreclosure can be a very trying time for anyone involved. To make matters worse, most homeowners do not know what happens to their liabilities after a foreclosure takes place. Do you still owe the mortgage company? Do you owe property taxes? What about my homeowner’s association (HOA) dues? This blog will address these issues and hopefully provide some guidance during a difficult time.
Most foreclosures in Georgia are nonjudicial, which means the lender does not have to go through state court to get one. When a lender forecloses on a mortgage, the total debt owed by the borrower to the lender frequently exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a “deficiency.” In Georgia, the lender may obtain a deficiency judgment against the borrower following foreclosure. However, in order to get a deficiency judgment, the lender must follow certain procedures. To be eligible for a deficiency judgment, the lender must file a report of sale with the superior court of the county in which the land is located within 30 days after the nonjudicial foreclosure sale (Ga. Code Ann. § 44-14-161[a]). If this deadline is missed, then the lender cannot get a deficiency judgment. Essentially, you will know within 30 days of the foreclosure sale if you will be responsible for any deficiency.
Property taxes are a debt against a property, not against the property owner personally. When a lender (mortgage company) forecloses on a property it is repossessing it, meaning the lender then becomes the property’s actual owner. Any unpaid property taxes on a foreclosed property will “cloud” that property’s title and must be cleared eventually. Normally, the foreclosing lender or even the foreclosed property’s new owner must settle any property tax liens on the property. You, as the previous homeowner, will not be responsible for any property taxes owed on the foreclosed property.
HOA dues and COA (condominium association) dues are unfortunately still the responsibility of the homeowner until the property is foreclosed. Many homeowners vacate the property and wrongly assume they are no longer responsible for HOA/COA dues. The property remains in the homeowner’s name until the foreclosure sale takes place. Once the foreclosure sale occurs, the homeowner is only liable for any HOA/COA dues and fees that have come due up to that point. The HOAs/COAs can pursue these dues after the foreclosure sale and can obtain a judgment just the same as a credit card company or mortgage lender. Wage garnishment, bank levies, and liens are all avenues the HOAs/COAs can pursue to collect once a judgment has been obtained.
Please don’t go at the daunting task of dealing with a foreclosure alone. Speak with one of our experienced and qualified foreclosure attorneys today!
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