There is a 60-day foreclosure moratorium on most mortgages. How does that affect the purchase of foreclosed properties in Georgia?

Several very important federal departments that back home mortgages, have issued letters or bulletins prohibiting foreclosing on properties for the 60 days after March 18, 2020. These include the Department of Housing and Urban Development, the Department of Veterans Affairs, the Department of Agriculture and Fannie Mae. There are some exceptions, particularly for properties that have been determined to be vacant or abandoned.

All in all, this covers about two thirds of all mortgages. There are big penalties for violating these rules, even if the property is not ultimately sold at foreclosure.

All this to say, you may not be able to obtain title insurance on a property bought at foreclosure if the foreclosed security deed was federally insured. Even if the note and security deed are privately held, title companies may give you a hard time. With so many foreclosures being prohibited, they may not want to look into the gritty details to make sure your foreclosure purchase was done just right.

It’s a risky business out there, so be careful.

You can find more information here, and specifically HUD’s Mortgagee Letter 2020-04 here.