I'm looking to purchase a judicial foreclosure on the courthouse steps in Georgia. I just have a few questions I am uncertain about. Any help would be greatly appreciated. I've searched and cannot find any answers.
1. This is a judicial foreclosure to satisfy a first priority lien. There were tax liens that were purchased before the foreclosure by an investor. Do the previous liens get wiped out?
2. Are they paid off from the balance of the winning bid at auction?
3. Will they follow the new owner if are the highest bidder at the judicial foreclosure auction?
I have included some links regarding the auction and judicial foreclosure for review.
I can't give legal advice. I would say talking to an attorney versed in foreclosure law would be a 100 well spent.
If you have never bought at the foreclosure steps it's a good idea to go and observe for awhile. Make sure you are bidding on the first position. Certain liens are wiped out and others survive the foreclosure process. Tax liens from the city and county survive foreclosure and must be paid.
The states enact laws to make those liens senior to mortgage debt,. The simple reason is cities and counties need money to pay for fire, police, government, etc. If a foreclosure wiped out the property taxes owed every time for the city and counties it would bankrupt them and they couldn't balance the budget. Some can't balance the budget anyways.
GA is mostly a NON-JUDICIAL state meaning there is a power of sale clause in the mortgage docs allowing the lender to give a default notice and demand letter followed by notice in the local legal organ (newspaper) for 4 weeks with the foreclosure date set.
Judicial in GA is hardly ever used except for title clearing and other oddball issues not usually seen.
Joel is right. Attend a few foreclosures to see how they are run. Talk to other investors. What is the redeemption period in GA? And seek legal counsel.
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