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In the past, it behooved those looking for foreclosure sales to have to search the county records manually to discover which of them held a “lis pendens” or “suit pending” recording against it.  Then many counties went to computer searchable recordings, and that helped tremendously, but now they are printed in every newspaper in the U.S. making such a search incredibly easy to accomplish!

Surprisingly enough, there are still companies that exist that will prepare such a list for you at an agreed upon cost, however most areas have such information readily available on the Internet for free as well.

As in any housing search in the past, you should know what you are searching for.  Do the amount of bedrooms in the property matter?  Bathrooms? School districts? Type of construction?  Neighborhood amenities? Deciding these factors ahead of time will help you narrow down your parameters and simplify your search.

Although there is a plethora of foreclosures available, a few banks withhold the foreclosure information from all but their richest investors.  A personal visit to your local bank may turn out to be highly worthwhile.  Make connections with your bankers, it could pay off richly.

Do not forget to scan newspapers, free real estate guides, and the Internet listings from various realty companies. In some areas, there are so many foreclosures that even banks and lending companies have had to list their properties with local real estate agents.  Stay in communication with the larger active real estate agencies in your area, and you may land quite a bargain.

Disregarding the naysayers in your area who claim that there is absolutely NO money available for loans will also pay off in the long run.  There is always, at least, private money available until there is a mortgage bail out which is already in the planning stages by the government.

Because the current real estate market is so “soft” it is sometimes possible to purchase property twenty cents on the dollar, which means that for every dollar that the property was worth, say a year or two ago, you can now spend twenty cents per dollar to purchase this property.

Some areas are more expensive than that, but some can even be had cheaper from owners who have foreclosed on too many properties and can no longer afford to hold onto them.  California is one of the States where there is a tremendous overabundance of foreclosures.

Rumor has it that there are land barons being made every day, and obviously if you have ready cash, it is definitely the time to buy. That’s how immense fortunes were made following the crash of 1929.  If you know nothing about property today, it behooves you to do careful research, learn all that you can about real estate in general and then all about real estate specifically for your area.  Eventually, though no one can predict exactly when, property values will begin to rise once more, and you will be able to reap the rewards of your diligence.

photo by Quint Cobb Foreclosure Relief, Flickr

Today’s economy has created a very high foreclosure rate.  It is said that one in four homes in much of the U.S. are either foreclosed against or are under foreclosure proceedings. Some areas such as California are experiencing even higher numbers of foreclosures.

Generally, one could say that there are two basic types of foreclosure—the mortgage foreclosure and the deed of trust foreclosure.  Both end basically in the same manner, namely the property owner loses his property, but legally the steps to foreclosure are slightly different.  Also be aware that different states have inserted special rules in their mortgage laws that could change or alter some of the following descriptions.
The Mortgage Foreclosure

The mortgage foreclosure begins by thereunder issuing a formal demand for payment, in the form of a “notice for default.”   A notice is sent through the mail, often by return-receipt-request, to the borrower and outlines how the borrower is in default.

Various reasons can be that the borrower has not paid for his home insurance that primarily carries the name of the lender in case of loss, or perhaps the borrower has been negligent in paying his taxes in a timely manner, or most commonly, the borrower has failed to make agreed upon payments to the lender.  Eventually this kind of foreclosure will result in a judiciary foreclosure whereby the judge allows the lender to reclaim the property, or foreclose.

Again generally, the borrower is given “X” amount of days to make up the deficiency. Usually this amount also includes late fees, interest, and even the cost of the lender to take the borrower to court.  Ordinarily when the mortgage and note were originally made these terms were spelled out for the borrower.  Thus it should not be a complete surprise for the borrower to be so treated.

A Deed Of Trust Foreclosure

In this instance, the borrower is referred to as the trustor, the lender becomes the beneficiary and an impartial third party who retains the title will be referred to as the representative of the lender or trustee.  In this illustration the title to the property was being held as security for the loan.  Again, as in the mortgage foreclosure, terms for this handling of the title, etc. has been agreed to when the loan was initiated.

Because there are no courts involved, property passes quickly from the trustee to either the beneficiary or even a buyer of the property.  Again, there are many similarities to either manner of foreclosure.  Both require notice, and both give the borrower a grace period to make the payments, etc.

Which manner your particular state uses is governed by foreclosure laws that with a little diligence you can learn about on the Internet. This may in turn help you avoid mortgage fraud or even help you avoid foreclosure should it come to that.  It has been noted however, that the best reaction you should have to financial problems that may lead to foreclosure is to get in touch with your lender as soon as possible.

photo by Camera Fraud, Flickr

Being threatened with foreclosure is an anxiety-producing event in your life, and one that will keep you up all night with constant worry. Those who lurk to perform scams and fraud unfortunately abound in these times. Prior to giving into any promises, be sure and perform serious investigative research of not only the company, but also the offer itself. And do remember that if it sounds too good, it probably is fraud!

One type of scam is one that makes you the landlord of the property in question. The shyster promises to pay off the loan threatening you with foreclosure, if you sign a “quit claim deed” to the scammer and he then will rent the property enabling you to collect enough rent to live elsewhere rent-free. He will be the tenant, and he will filter the rent he owes you to the landlord you will rent from.

After a few months of excuses, you find that the “tenant” is gone, the bank is still foreclosing and you’ve signed a worthless deed that has given you no protection against foreclosure at all.  Chances are, your property has been “trashed.” Variations of this scheme can be easily found.

The Middleman Scam

For some reason, people who are facing foreclosure refuse to discuss the problem with the lender.  In walks a person who says that you do not need to visit with your lender all alone, that they will accompany you and act as the middleman for you.  Of course, there’s a very hefty charge for this handholding.

Or, another variation on that scam is that many middlemen say that they will talk to the lender FOR you provided you show good faith and make payments to the middleman who will then provide the payment to the lender.  Of course they never make the payments. There are as many variations on this as there are in music styles.

Confidence Men

Regardless of the name of the scam involved, usually the modus operandi involves the fact that you do not wish to contact the lender, and the scammer is a perfected con man, who gains your confidence and then scams you. There are pressure scams that exhort you to sign something immediately while there’s still time, there are so-called professional counseling agencies that charge exorbitant figures in order to accomplish absolutely nothing.

photo by Quint Cobb Foreclosure Relief, Flickr

Over and over again, people have been warned that they need to visit their lender and see what the lender is willing to do to keep you in the property.  After all they are swamped with foreclosed properties, and do not wish yet another property to try to manage, fix up, rent or sell.  If working with the lender does not produce anything to your satisfaction, turn to a HUD-approved housing counseling agency.  How to be sure it’s a HUD-approved agency?  Again verify it with your lender.

Above all, inform yourself of scams, real counselors, government programs and do make a visit to your lender.  There is a lot of power in correct useful information. Avail yourself of it, for it may save you from a scam someday.

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It is difficult to properly outline the foreclosure procedure for all states, as each state has its own diverse foreclosure laws. Be sure and carefully research the portions that interest you or you feel apply to you.

Keep in mind that the note is the proof and indication of the debt and a mortgage is recorded in the county where the property is located, which outlines how the mortgage will be paid and what happens if the borrower does not adhere to the repayment of the debt. In essence, foreclosure “happens” to the mortgage.
In general, when a homeowner is incapable to meet the payments of the loan on the property, the lender allows the borrower a designated grace interlude to make the payments good combined with additional fees and costs. However after a stipulated amount of missed payments, the lender is then forced to begin the foreclosure procedure.

Power Of Sale Foreclosure
A foreclosure process known as “power of sale” is not known or adhered to lawfully in every state, but it refers to a quick method of reclaiming the property that has been used as collateral for the loan.  After the proper notification has been given to the defaulting borrower, a deed of trust is provisionally passed to a trustee who will then sell the foreclosed home for the lender at an auction.  This type of foreclosure is subject to judicial analysis to make sure that it was wholly and properly accomplished.

Judicial Sale Method of Foreclosure
This is the most commonly used method used by the majority of lenders.  The lender who files suit against the defaulting borrower in the court system begins the judicial foreclosure process.  The borrower then receives a “notice of default” from the lender, which states that the immediate payment of all monies is now due and payable to the lender.

Generally the borrower needs to respond within 30 days to avoid or halt the foreclosure. Should the borrower make no restitution to the lender, then the lender can request the courts to give a decision in his favor, and a notice of sale is recorded with the county.  The sale is advertised in local newspapers, usually for a three-week length of time, which serves as public notice to not only investors, but the lender and borrower as well.

The property will then be sold at auction.  The opening bid is ordinarily set by the lender to cover the loan amount, loss of interest, attorney fees, and other incidental costs.  Should no bids be received, the attorney representing the lender purchases the foreclosed property for the lender.

Strict Foreclosure
Rarely used in these times, this type of process is used when the property is worth much more than is owed to the lender.  The fact that there is high equity in the property must be proven in the courts to use this particular method.  Either way there is a still a transfer of the property to the lender, however occasionally when there are substantial amounts of monies resulting from the auction, and all taxes and costs have been paid, then the borrower will receive the difference.  As you can imagine this rarely happens in these times.