Commissioner Scott Gibbs' former home in Lula is in foreclosure, a result of a breakdown in negotiations between the commissioner and his bank over a loan repayment plan.
Gibbs, who bought and moved into another home last summer, says the foreclosure process on his Forrester Road property has been ongoing and is part of "an amicable agreement" he and his wife, Jennifer, made with SunTrust bank.
A new foreclosure notice appears in today's Times. Gibbs said it is a formality to allow the bank to have a clean title to sell the property. "We gave them some money, they accepted our losses and we moved on," Gibbs said.
According to the notice in The Times, the bank is trying to recuperate losses on an original loan of $1.22 million Gibbs secured to purchase the home. According to county records, Gibbs built the home, situated on 17.5 acres on Forrester Road in Lula, in 2001.
A foreclosure notice was originally filed in November, shortly after Gibbs was elected to the Hall County Board of Commissioners.
Then, Gibbs said he was in the process of negotiating a new interest rate with the bank.
His grading company, J.D. Gibbs Grading, had filed for Chapter 13 bankruptcy earlier in 2010 — a filing that allowed the company to reorganize its debt and continue operating.
Until three months ago, the grading company went on a 30-month streak without making a profit, Gibbs said. The loss in revenue, he said, made it difficult for Gibbs to continue paying as much on his home loan as he had before.
"My business was tied to government spending, and three years ago, the government stopped spending money," Gibbs said. "...Our income was cut by 80 percent."
Following the November foreclosure filing, Gibbs said he negotiated with the bank for several months, but "never could come to a happy medium."
"We were going to buy the note back from the bank, renegotiate the terms of the loan," he said. "...If they would have lowered the interest rate, then it would be more doable to maintain. Since I had such a drastic cut in income, I couldn't continue where we were."
When neither the Gibbs' nor the bank could successfully negotiate a new interest rate or principal amount, Gibbs said he paid the bank "to get out from under" the loan earlier this year.
The agreement kept Gibbs' credit intact enough to be able to purchase another home.
"They didn't ding us too bad," Gibbs said.
On June 30, Gibbs and his wife closed on another home situated on 2.8 acres off Shirley Road for $450,000, according to county records.
That property, too, was a previous foreclosure that once sold for as much as $769,000 in 2008, according to county records.
The financial trouble, Gibbs said, helps, rather than hurts, his credibility as a commissioner. In an interview Wednesday, Gibbs noted the sheer number of foreclosure filings each week in The Times.
He also said the experience has helped him become a more scrupulous spender.
"I can be more conservative (now), because I've had to tighten up personally, and the county's had to do the same thing — government spending does," Gibbs said.