Guide to Buying a Foreclosed Home

Foreclosure Timeline

• Related Articles:
  • What is a Foreclosure?
  • Guide to Buying a Foreclosed Home
  • What is a Pre Foreclosure?
  • Fact and Fiction About Foreclosures
  • The Foreclosure Process for Your State
  • Foreclosure: How it Happens and what it Means for Investors
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Though the exact timeline of home foreclosure varies state to state, the same basic steps are followed for each foreclosed home. The details also change slightly depending on whether the foreclosed home was secured through a mortgage or a deed of trust. In general, foreclosures tend to follow the following steps:
 

Foreclosure Steps

• The foreclosure process begins when a homeowner, or borrower, misses a mortgage payment and disrupts the amortization schedule.
  
• Once the mortgager realizes the lapse in payment, a late charge is levied on the borrower. Attempts to contact the homeowner to determine the cause of the late payment ensue.
  
• After a certain period of time lapses, (usually 45-60 days after the missed payment,) a “demand” or “breach” letter is sent to the borrower demanding payment and explaining that the terms of the mortgage or deed of trust have been breached or violated and the amortization schedule ignored. The homeowner is then given a month to settle the debt and prevent foreclosure.
  
• If the delinquent amount is not settled, steps are taken to initiate foreclosure proceedings. Exact details vary greatly depending on the state and whether a mortgage or deed of trust is used. If a deed of trust is the security tool, a trustee may follow through with the foreclosure proceedings without going through the court system, speeding up the process.           
• If the property is secured by a mortgage, judicial foreclosure proceedings are required. The specifics of judicial foreclosure — formal notices at the courthouse, published details of the foreclosure (known as Lis Pendens), rights of redemption, deficiency judgments — depend on state law.
  
• If the borrower does not take advantage of his right to reinstate (if offered), then the property is sold at foreclosure sale or auction. This step can take as little as one to two months in non-judicial foreclosure homes or up to nearly a year in judicial foreclosure situations. In states without a right of redemption, the foreclosed home changes hands. The right of redemption, however, allows borrowers a window of opportunity in which to reclaim their property if they have the money.

Though the process resulting in foreclosed homes has a number of varying details depending on state and primary type of homeowner payment, foreclosed homes and pre-foreclosures act as wonderful homes or property investments.  The entire process from lapsed payment to sale can last anywhere from several months to over a year, but with such low costs, the foreclosed home you find can be timeless.

Other Articles on Foreclosures

What is a Foreclosure?

Foreclosure is the legal process by which real estate secured by a mortgage or deed... read more

Guide to Buying a Foreclosed Home

Though the exact timeline of home foreclosure varies state to state, the same... read more

What is a Pre Foreclosure?

If you're considering buying a distressed property for your family or as a real estate investment, the pre-foreclosure period might be the best time to make your purchase read more

Fact and Fiction About Foreclosures

There are a number of misconceptions surrounding foreclosure procedures and foreclosed homes read more

The Foreclosure Process for Your State

Foreclosure proceedings vary in a number of ways from state to state. These... read more

Foreclosure: How it Happens and what it Means for Investors

Surely someone in 2006 came out with a bumper sticker that says 'Foreclosure Happens'; because the year represented one of the greatest surges in foreclosure filings in recent history... read more