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Georgia Non-Judicial Foreclosure & Deficiency Judgment

Discussion in 'Foreclosure, Repossession, Auctions, Short Sales' started by ddunn6, Nov 19, 2009.

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  1. ddunn6

    ddunn6 Law Topic Starter New Member

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    In 2007, we purchased 2 pre-development lots (investments) in a Georgia coastal community that was to be "build-ready" by January 2009. (We live in NC) The developer had $40 million in sales, but installed no infrastructure before filing bankruptcy in Nov 2008. They used "preferred lenders" with special loan programs - 90% LTV lot loans with 13% Buy-Down proceeds going into interest-bearing checking accts to pay the payments for the first 16 - 18 months. BB&T was the main lender, and they processed 75% of the loans for this development with basic retail loans (no mortgage insurance to cover them in the case of default). We have two of these loans. NOTE: Developer was privately-held LLC (buyers couldn't see financials) with excellent reputation. BB&T loan officer assured me they had determined the developer had plenty of money to finish their concurrent projects, or they would never make these loans. Since 2007, the county has admitted the overvaluation of the properties, and has revalued the FMV at less than 25% of the purchase prices.

    My husband and I both became unemployed in January of 2009, and only one of us had unemployment benefits. We've been unable to gain employment, so ceased these monthly payments to BB&T. We've managed to maintain our primary mortgage and have no other delinquencies other than the "investment loans." However, our credit is ruined, and we have no lines of credit available except one credit card with a very low line that we pay off every month. Although we attempted to proactively deal with BB&T on these loans, they did not budge. Without jobs, they would not deal with any restructuring, modification, etc. We submitted a final settlement offer they did not even entertain, stating they would only consider 75% of loan value as settlement. (Not even a SHORT SALE offer would bring that on these lots!)

    We and 60 other lot owners have sought litigation counsel without success - over 25 claims of conflict of interest. Now we are scheduled for foreclosure sale on December 1. We've been told by BB&T Loss Mitigation and Foreclosure officers that whether a Short Sale, Deed in Lieu, or a Foreclosure Sale ends up being the final settlement, they will pursue deficiency judgment for the balance, and we will be expected to make payment arrangements for the amount.

    Georgia certainly allows this, but how logical is it to think that we would be able to make payment arrangements on a deficiency judgment if we can't save our property and credit by making payments NOW?!!

    My real question: Is there any legal recourse at this late stage? If BB&T had used mortgage loans for these lot loans with mortgage insurance on their side, their losses would have been minimized. Their intent to actually file deficiency judgments was not revealed to us until this week when we had finally found a short sale opportunity. NOTE: The developer's bankruptcy filing is being challenged with fraudulent transfer of funds, but we've not been able to secure counsel to serve injunctions to "hold" or stop foreclosures. Many owners have had to just let their investments fall to this non-judicial foreclosure process just to stop pouring good money after bad.
     
  2. ddunn6

    ddunn6 Law Topic Starter New Member

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    oops - left this out!

    I forgot to mention - One of the reasons we've been unable to secure employment is the unfavorable credit reporting from BB&T.
     

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