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Updated over 12 years ago on .
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repossessing my house in GA
If anyone can help I would appreciate your input.
I personally sold a home to a young couple with kids who I thought just had a bad run of luck; little did I know I would be victim to them refusing to pay the mortgage I gave them. I used a lawyer for all the paperwork. This has put me in a small financial strain now as they have not paid the mortgage in DEC or JAN.
I have asked them politely what position they are in now and basically they tell me the husband lost his job and they will not be paying their mortgage, they are going to try and stay in the house as long as they can.
So far I have given them two late notice payments with late fees I know want to get them out of the house and repossess it so I can just rent it out myself.what legally do i have to do to get them out as quick as possible. The house is owned outright by my wife and me.
This is in Georgia Houston County.
Most Popular Reply
What's the current market value of the house relative what is the balance owed on the mortgage note??
You just got lured in by a sob story.
What is the going rent for a property like yours currently?? You have to weigh paying them to get out now and deeding the property back to you versus lost rent.
So if you pay them 2 grand to go today and do a DIL but if they stay and you try to foreclose and they file bk they can stay for 4 months free. That's 2,800 at 700 a month rent option in lost income plus attorney fees etc. You could start out small at 500 for the DIL and see what they say. If you get the property back mid month or after the first week you usually lose that month as the good renters are not moving mid-month just people with problems you don't want.
- Joel Owens
- Podcast Guest on Show #47
Can you approach them to do a "deed- in - lieu " and give the property back to you without foreclosure??
You could offer to short sale the property and get them out if they want to sell the property.
Usually your mortgage documents has a power of sale clause that allows you to accelerate the mortgage. Just because you used an attorney doesn't mean the papers are correct.
If you need quick cash now you could sell the note for a discount to get some of your cash out and let someone more experienced deal with this mess.
How much money are we talking that you have as the note on this property??
In Georgia you are just required to send an acceleration letter calling the note due. Then you advertise for 4 weeks in the local legal organ (newspaper) that the property is in foreclosure. So earliest you need to send acceleration letter TODAY and then start foreclosure advertising next month for 4 weeks to foreclose the first Tuesday of March .
Sadly even when you foreclose if they do not leave voluntarily you have to go through eviction as a holdover tenant unless someone pays cash and pays off your property a auction and then they deal with it.
You will not be getting money in the immediate term but will be paying it out for all options. DIL the owner will want money. Have the owner do a short sale they will want an incentive. Leave the property after foreclosure they will want cash for keys. Even if they wanted to move it sounds like they are broke and do not have money for first and last months security deposit, moving truck, etc. so you will have to pay to get them out.
Even if you move to foreclose they can file chapter 13 and stall for 2 to 3 months even if the plan isn't approved. I am really sorry for your situation and your attorney should have told you the risks and maybe you would have sold off at a lower price to a regular sale instead. The state of Georgia is actually a quick state to get the property back compared with other states. There is no right of redemption in this state after you foreclose.
Send the acceleration letter and begin to foreclose. Just like a tenant with eviction if they see you are serious if they have money, ANY MONEY it will appear. If possible you can do a reduction in the loan payment, forebearance, etc. to get them back on track If you need today cash and are that strapped financially but your property is paid off then sell the note at a discount and get the money out quick.
- Joel Owens
- Podcast Guest on Show #47
Forgot to mention if the people you gave a mortgage too have anything of value to lose (credit scores,etc.).
You can mention that you can pursue them for a deficiency balance if it forecloses etc. and come after them for money owed. If they are really broke you will get a judgment eventually on them but not collect anything and they might get angry and damage the property and devalue it before you get them out.
- Joel Owens
- Podcast Guest on Show #47
Joel,
Ty for the quick response.
I sold house to them July last year they had not so good credit as why I gave them a second chance (they had a long story lesson learned).
They have no money as far as I know, they have barely any furniture in the house I have a feeling they are waiting to get taxes then move on but are just not telling me they are saying they can’t pay and won’t leave. As far as the money side I don’t want to short sale or actually sell at all would like to just recover house then find a good renter. Money I am in need of is lost income from them for some personnel stuff I need to take care of, not any major financial losses or anything. Sorry if I put this across incorrectly. Again ty for info help.
What's the current market value of the house relative what is the balance owed on the mortgage note??
You just got lured in by a sob story.
What is the going rent for a property like yours currently?? You have to weigh paying them to get out now and deeding the property back to you versus lost rent.
So if you pay them 2 grand to go today and do a DIL but if they stay and you try to foreclose and they file bk they can stay for 4 months free. That's 2,800 at 700 a month rent option in lost income plus attorney fees etc. You could start out small at 500 for the DIL and see what they say. If you get the property back mid month or after the first week you usually lose that month as the good renters are not moving mid-month just people with problems you don't want.
- Joel Owens
- Podcast Guest on Show #47
The type of paperwork you had with them to sell it will dictate how you must go about the process of recovering the property. Many types of seller financing out there, so hard for us to give an exact approach, although Joel Owens has given you a pretty good outline of what to expect in that you have to foreclose. Unless you have some other kind of arrangement (lease purchase type deal).
Maybe your attorney should be approached for advice now that you face this somewhat foreseen event - yes, the attorney should have foreseen this as a possible outcome, and put in language into the agreement to handle such a scenario.
If they are stringing you along you have to go through with the foreclosure and offer the DIL to see how they play it out. Either way push them and do not listen to the story " We have taxes coming and just work with us and we will catch you up then ".
You then wait and get duped again and see the 60 inch flat screen in the living room and they say "we had other expenses" and the money is gone. You point to the TV and they say that is on a payment plan "yeah right" as there credit is trashed already.
Sounds like you landed a professional tenant. Someone falling on truly hard times would work with you for a solution instead of the we have no money answer.
- Joel Owens
- Podcast Guest on Show #47
You say you "sold" them the house, but then you say you the house is "owned outright" by you and your wife. Who is the deeded owner?
Did you deed them the house and carry back a promissory note secured by a deed of trust? Did you lease the house with option to buy? Did you sell on some kind of installment/land contract ?
There are legal remedies for repossession and/or eviction for all situations. Being able to clearly state the situation is the first step, as you'll have to do that in order to get the legal advice and assistance you may need.
i am the deeded owner and i guess the bank to the couple buying.
What does "deeded owner" mean? I'm confused. I assuemed you sold this to them with straight owner financing. That is, you gave them a deed to the house and took back a mortgage in the form of a deed of trust or mortgage.
If the deed is still in your name (i.e., you did not give them a deed), then you're doing a land contract or lease/option or something else. This is very important. The process Joel Owens is describing applies if they now own the house and you are the lender. If that's not the case, the process will be different. If its just a lease option, you just evict them. Done deal. Hopefully your option contract is written so that a failure to pay rent voids the option.
If its a land contract (aka contract for deed), then there's yet another process. Sorry, don't know that for GA, but I'll bet Joel does.
In any case, stop listening to their BS. Start the paperwork to take it back. The lawyer you used originally would be a great place to start. But you may want a second opinion in case he doesn't really know what he's doing. Don't delay. If you have to go through foreclosure, you're looking at months and months. There's no shortcut down that road. The cash for deed in lieu may be a shorter route (I've used that with a defaulting borrower), but if they won't cooperate (and sounds like they won't) you have little choice but to foreclose. Assuming this was straight owner financing.
Sean: if you are currently the owner of the property, and you didn't execute a mortgage with your buyers, then you are not the lender/bank. All the stuff about deed in lieu that Joel recommended wouldn't apply, since you are the owner of record and the deed is in your name.
How did you sell the property and what paperwork did you use to arrange the sale?
The ability to correctly define a legal problem in REI, especially for lay people, is often difficult or impossible. Many people use the word mortgage when they mean installment sale. Some people don't know what deeded owner means. In some regions the terms "installment sale" or "land contract" refers to true seller carryback mortgages. My mother and her husband, in Michigan, use "land contract" to describe properties they've deeded away and where they're carrying back the note. Causes confusion all the time. At least "contract for deed" suggests that the deed is in the seller's name.
If the OP could describe what the terms of the "sale" were, we could better direct him to the legal resources he needs. If indeed it's some kind of contract for deed agreement, those are really messy where I am. In my farms, there's often a recorded sale agreement, which really messes up an eviction.
Agreed, K. Marie Poe. I would have thought the lawyer who did this paperwork would have clarified what transaction was actually happening. The range of alternatives (lease/option, land contract, seller-carried mortgage) all have different implications for this situation.
Sean Merant, what are the documents from the closing?
I just talked to Sean on the phone. A very nice guy. Basically buying houses for retirement income.
From what I understand the initial paperwork was a wrap situation where the property was wrapped around a regular bank mortgage and another junior note was created and recorded.
After the wrap was created down the line Sean paid off his mortgage and the bank on the senior note mailed him the deed. So he has a deed but there is still a recorded interest from this wrapped note.
I recommended Sean go back to his original attorney to discuss documents and options and then he could take the proper forms to present to the people living in the property and see what they wanted to do. I think to have the proper forms before going to the person living there is better than going and making mistakes and everyone gets confused and having a mess to clean up.
This Is the situation from what I understand of it.
- Joel Owens
- Podcast Guest on Show #47
yes joel thanks for you advice i will keep you updated on the situation when i hear back from the lawyers.
this is a very good source of info and i appreciate all your thoughts and help.
Hang on, that doesn't make sense. If the original purchase was a straight forward financing situation, the bank would have never had the deed. The orignal seller would have give Sean a deed with the seller as grantor and Sean as the grantee. Sean Merant would have had the deed and been the lawful owner all along. Note that the actual piece of paper is interesting, but largely irrelevant. What matters is what's recorded. The lender might have a "deed of trust", which, despite the similar name, is not a deed at all. When the loan was paid off, the lender should have recorded a "release of lien" or some similar document to remove the encumbrance created when Sean gaven them the deed of trust. And the lender may well have mailed Sean their copy of the deed of trust.
When the house was sold with a wrap, Sean should have given the buyer a deed with the buyers as the grantee and Sean as the grantor. That transfers legal ownership. The recorded lien (I assume that's also a deed of trust) gives him a security interest in the property. But not ownership.
Joel: thanks for helping the OP and thanks for the additional info. Did the bank mail Sean a deed or a reconveyance of a security trust deed (or whatever the doc is called in GA)? A wrap usually, but not always, indicates a sale. A bank doesn't usually hold a deed. But perhaps this was a wrap of a contract for deed?
Jon, I'm willing to bet that the OP did not receive a deed from the lender when he paid off his mortgage, but rather some kind of release or reconveyance doc. I did a loan in GA once and the document securing the promissory note was called a security deed or something close that. This could be the confusion. It's not unusual for people to misunderstand what they receive in the mail from lenders.
Sean, Did you purchase this house with a mortgage, then sell the house to someone else on a land contract, and then in the meantime pay off your mortgage, and now the land contract buyer stopped making payments to you?
If yes, you would need to foreclose on the land contract. (In my state, this process is called forfeiture)
Here in Georgia when you do a wrap the title transfers and you get a warranty deed. The lender still has a different document for the mortgage the security deed which is a lien interest.
I will have to look up the correct verbage.
The land contract the party makes payments and then they get the deed later when they have met specific terms of the agreement. That Is my understanding of it. So this would not be a land contract.
In this instance the property was bought with a mortgage. Then later on the property was wrapped around the existing mortgage from the bank. Since the owner already had title there was just a security deed on the property. When the original mortgage was paid off that bank sent a release to the original owner.
All of that doesn't wipe out the fact that the new owner has a secured interest in the property with the mortgage documents that were recorded. The poster who started the topic talked to their attorney and the people living in the property have agreed to sign a waiver of interest ( DIL) and vacate the property. We can get into the minutia but that is basically the jist of it from what was explained.
- Joel Owens
- Podcast Guest on Show #47
That's an excellent outcome and much better than the first post where Sean Merant said "they are going to try and stay in the house as long as they can."