The Foreclosure Timeline

The Foreclosure TimelineA foreclosure of a property is the result of default on the mortgage.  Real estate comps generally reflect any foreclosures in a particular area.   When property owners fail to make their scheduled mortgage payments, or when owners fail to pay their property taxes or some related obligation such as homeowners’ association fees or special assessments for a prolonged amount of time, a foreclosure can occur.

A legal “notice of default” or a “lawsuit to foreclose” (depending on the state) is typically filed to initiate a foreclosure. This makes it formal to the property owners, and the public in general that legal action is moving forward to force a sale of the property. This notice is delivered to the borrower at least one month before a foreclosure sale (typically between 60 to 180 days) and subsequently posted on the internet and/or newspapers as public notice.

In response, a borrower can do several things to prevent or delay the foreclosure.

  1. Make a deal regarding the loan with the lender and perhaps reinstate or even refinance their amount they are in arrears.
  2. File a legal defense against the lender and there by dragging the process out for a year or longer.
  3. File for bankruptcy and automatically stay the foreclosure action. In certain instances, bankruptcy court can even annul a foreclosure sale that has already occurred.

Should these tactics fail or run their course, the property is auctioned to the highest cash bidder.  This is my main reason for stating that foreclosures are the easiest money producing investment option.

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