My question involves a foreclosure in the State of: GA
GA is a deficiency state.
Our primary home will be in default in another 50 days and enter foreclosure. Our first is a Freddy Mac serviced by XXXXXXX for $67,000. Our 2nd is a $51,000 HELOC with XXXXXXX that was done last August or Sept. We had no clue when we took out the HELOC loan that we would be unable to sell the home. It has been on the market since last August. My husband is now unemployed. Most of the HELOC was not used for the primary home.
We also have a fixer-upper we purchased 3.5 years ago in XXXXXXX. We bought it for future retirement and never rented it. It wasn't suppose to be a fixer-upper, but we had a lousy home inspector. Between the extensive repairs that are still left and the loss of value due to the market, there shouldn't be any equity in it. Paid $49,000 ... owe $42,100. We want to move into it since we can afford the payments.
First Question: After foreclosure, will our second home be in jeopardy? Can they put a lien on it even though there is no equity and it is emcumbered with a 30-year loan?
Second Question: XXXXXXX said they will charge off the loan. Are they likely to: (a) sue us for deficiency, (b) try to settle with us for a much smaller percentage of the amount, (c) sell the loan to a collection company, or (d) only send a 1099-C to IRS?
Third Question: We really don't want to go through Bankruptcy, but our income will qualify for Chapter 7. If you do recommend bankruptcy, should we file before foreclosure or wait until it is done and XXXXXXX charges off? I believe we should be able to keep our home we are moving into as long as we still pay the mortgage ... is that correct? Georgia has a $20,000 exemption for bankruptcy, so I'm hoping we can apply that to our other home if needed and other items.
Hope my questions aren't too many. Thank you so much for this forum.