A New Career in the Foreclosure Business
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A New Career in the Foreclosure Business

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Make huge profits with a foreclosure system even most realtors don't know about - http://skyvaultpublishing.com/LDDNet/formula.html

Make huge profits with a foreclosure system even most realtors don't know about - http://skyvaultpublishing.com/LDDNet/formula.html

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A New Career in the Foreclosure Business A New Career in the Foreclosure Business Document Transcript

  • ==== ====For more information on making money with foreclosures, visithttp://www.skyvaultpublishing.com/LDDNet/formula.html==== ====The #1 thing that most real estate investors and homeowners facing foreclosure want to know is:"what is the timeline for foreclosure?" In other words: "how long does it take?" The answer is thatthe mortgage foreclosure process and timeline varies from state to state. This article provides theinformation and resources that you will need to find out the foreclosure laws, procedures andtimelines for all 50 states.As mentioned, each state will typically have a different set of rules and a different timeline forforeclosure.20 states utilize only "Judicial" Foreclosures.5 states and the District of Columbia utilize only "Non-Judicial" Foreclosures.25 states utilize both Judicial and Non-Judicial Foreclosures.#### Of the 25 states utilizing both types of foreclosure, Non-Judicial Foreclosures are morecommon. In fact, Non-Judicial Foreclosure is the most commonly used form of foreclosurenationally.I. JUDICIAL vs. NON-JUDICIAL FORECLOSURES:The primary difference between the two classes of foreclosure is the involvement or non-involvement of the court system. As you might have guessed, Judicial Foreclosures are processedthrough the courts. Non-Judicial Foreclosures are not.Regardless of the type used, the timeline for foreclosure is always preceded by a borrowerdefaulting on their mortgage payments. Most lenders typically wont threaten homeowners withforeclosure until two or three payments have been missed. However, once the lender concludesthat the mortgage is in default and the homeowner is not going to catch up on their overduepayments, a legal filing is made by the lender and the timeline for foreclosure begins.A. JUDICIAL FORECLOSURES:In a Judicial Foreclosure, the lender files a formal complaint with the court and records a legalnotice of "Lis Pendens". The complaint must state the details of the debt and why the lendershould be allowed to foreclose on the property. The Lis Pendens gives public notice that the houseis the subject of foreclosure proceedings and implements the legal timeline for foreclosure.If the court rules that the debt is legitimate and in default, it will send a notice to the homeownerdemanding payment of the amount owed (plus penalties and foreclosure costs). The borrower istypically given 30 days to respond and satisfy the debt. If they do not, the court will tender ajudgement in favor of the lender, instructing that the home will be sold at a "Sheriffs Sale" auction.
  • After the judgement is entered, in most states that utilize Judicial Foreclosures, the homewner hasabout 90 days prior to the Sheriffs Sale to pay the entire amount owed and stop the mortgageforeclosure process. There are other alternatives that could stop the timeline for foreclosure duringthis 90 day period:Negotiate a "Forbearance Agreement" with the lender that revises the loan terms to thesatisfaction of both parties. (Most lenders do not want to foreclose because it can cost them a lotof money.)Sell the home.Refinance the loan.Declare bankruptcy.If the mortgage foreclosure process isnt stopped, the property goes to a "Sheriffs Sale" where it isauctioned off to the highest bidder and extinguishes all rights of ownership of the defaultinghomeowner. If noone purchases the property at the auction, the title to the home reverts to thelender and it becomes what is known as an "REO Property". This stands for "Real Estate Owned"(by the bank or lender).How long does the Judicial Foreclosure process take?This is almost impossible to predict. The judicial timeline for foreclosure is entirely driven by thecourt schedule and literally "at the mercy of the court". However, most experts will agree thatJudicial Foreclosures can often take more than a year to complete.Important Note: Even after a home has been sold at the Sheriffs Sale, some states will allow anopportunity for the homeowner to regain ownership of their home. This is known as a "RedemptionPeriod" and is a period of time after the mortgage foreclosure process has been completed. Eventhough the property now will have a new owner, the former homeowner can still reclaim title totheir home by paying off the full amount of their original home mortgage plus penalties andforeclosure costs.B. NON-JUDICIAL FORECLOSURES:Also known as "Power of Sale" Foreclosures, Non-Judicial Foreclosures are conducted outside ofthe court system by either a third party "Trustee" or an attorney. This mortgage foreclosureprocess is used when a "power of sale clause" exists in a mortgage or deed of trust. This clausestates that the borrower agrees to the sale of their property to pay off the balance of their homeloan in the event of a default.As with Judicial Foreclosures, most lenders will not begin the Non-Judicial Foreclosure processuntil several payments have been missed and they are convinced that the homeowner is not goingto catch up on their overdue payments. However, once the lender determines the borrower to bein default, a legal filing is made by the lender and the timeline for foreclosure will begin. This filingis known as a "Notice of Default" (NOD).After the NOD is filed, the homeowner typically has a 90 day "Reinstatement Period" to catch upon missed payments and stop the foreclosure before the lender can take further action. There areother alternatives that could stop the timeline for foreclosure during the Reinstatement Period:
  • Negotiate a "Forbearance Agreement" with the lender that revises the loan terms to thesatisfaction of both parties. (Most lenders do not want to foreclose because it can cost them a lotof money.)Sell the home.Refinance the loan.Declare bankruptcy.If the borrower remains in default at the end of the Reinstatement Period, a "Notice of TrusteesSale" will be filed with a date and time posted for an auction sale of the property. After the Noticeof Trustees Sale is recorded, the homeowner typically has another 21 days before the auctiondate. During this period, the borrower can still stop the timeline for foreclosure with any one of thealternatives mentioned above in the Reinstatement Period.If the mortgage foreclosure process isnt stopped, the property goes to a "Trustees Sale" where itis auctioned off to the highest bidder and extinguishes all rights of ownership of the defaultinghomeowner. If noone purchases the property at the auction, the title to the home reverts to thelender and it becomes what is known as an "REO Property". This stands for "Real Estate Owned"(by the bank or lender).Important Note: Similar to Judicial Foreclosures, after a home has been sold at the Trustees Sale,some states will allow an opportunity for the homeowner to regain ownership of their home. This isknown as a "Redemption Period" and is a period of time after the mortgage foreclosure processhas been completed. Even though the property now will have a new owner, the former homeownercan still reclaim title to their home by paying off the full amount of their original home mortgageplus penalties and foreclosure costs.THE BOTTOM LINE:Regardless of the mortgage foreclosure process used, it is very important to know the laws andprocedures for your particular state. To help with that, here is a link to the Foreclosure Process: AllStates.ABOUT THE AUTHOR:The author, John Hanlin, recently published the HOT NEW E-BOOK: "The LazyMans Guide toUnderstanding Foreclosures & REO Property Investment". Click here for info.Mr. Hanlin is an Independent Investors Consultant who provides FREE investment advice on hiswebsite:http://www.JohnHanlin.com where you can sign up for a copy of his FREE Special Report: "TheSafest High Yield Investments You Can Make Today".You have full permission to reprint this article provided it is kept unchanged and all authorinformation above remains intact. View slide
  • Article Source:http://EzineArticles.com/?expert=John_C_Hanlin==== ====For more information on making money with foreclosures, visithttp://www.skyvaultpublishing.com/LDDNet/formula.html==== ==== View slide