The Stages of Foreclosures USA

Understanding the process of the <strong>foreclosures USA</strong> is essential to your plan to buy or invest in the foreclosure market. Everywhere you go, there are foreclosed homes and their numbers continue to increase daily. Knowing the market and the process will allow you to decide if you are cut out to be a foreclosure homebuyer or investor.

<em>Defining Foreclosure:</em>

A foreclosure may happen to a homeowner if he fails to pay the principal and the interest payments on the loan that he took out to buy the property. Typically, the property that is on default will be seized by the lender after several months of non-payment. Foreclosure is a way for lenders to recover the investments they made on the property.

<em>How Foreclosure Happens:</em>

Foreclosure does not just come like a thief in the night. It goes through several stages during which homeowners have opportunity to pay their dues and make their accounts current to avoid foreclosure.

This is a typical <strong>foreclosures USA</strong> process. If you missed payments on your loan for three to six consecutive months, the lender will file a notice of default (NOD) at the County Recorder’s Office. The NOD will be issued to you and this signals the start of the foreclosure process. The NOD will also serve as a reminder that you are given a certain period of time to pay your arrears and update your loan.

Usually, three months after you received the NOD and the missed payments have not been settled, a foreclosure sale date will be set. You will receive a Notice of Sale, recorded at the County Recorder’s Office, which will be posted on your home. Additionally, the Notice of Sale will also be published in local newspapers for at least three weeks.

<em>Foreclosure Auction:</em>

Usually, auctions of foreclosure homes are held at courthouses of counties or towns where your property is located. The sales process involves bidding on the property, with the amount of the opening bid typically set by the foreclosing lender based on the outstanding balance of the loan, the accrued interest and fees associated with the auction.

Properties that failed to meet the opening bid will be returned to lender and be part of the growing number of <strong>foreclosures USA</strong> that are sold at less than the whole amount owed to the lenders.