| The most likely result in the foreclosure process is | | | | investor, it is important that the investor |
| that the homeowner will lose ownership and then | | | | determines the requirements in that state. |
| possession of their home. However the | | | | Once the Notice of Default is posted you can bet |
| foreclosure procedures vary depending on which | | | | that every man and his dog foreclosure investor |
| state of the USA. | | | | in their area will pick up the scent and knows |
| Let me explain. There are two types of | | | | about the property. The competition increases |
| foreclosures and each state of the USA follows | | | | and any investors interested in buying the |
| either of these procedures. | | | | property prior to auction are likely to be trying to |
| 1. Foreclosure by Trustee Sale. | | | | contact the homeowners. |
| When a property is purchased in the states that | | | | Hopefully you can now see the advantage of |
| follow this foreclosure procedure, the county | | | | contacting the homeowner prior to the posting of |
| issues a deed which a trustee holds until the | | | | the foreclosure notice. Unfortunately the only way |
| mortgage is paid. When the homeowner defaults | | | | of knowing this is by the grapevine or word of |
| on the house payment, the bank or lender notifies | | | | mouth. The investor who arrives first and whom |
| the trustee to begin foreclosure proceedings. The | | | | the homeowners trust the most is typically the |
| property is sold and the proceeds from the sale | | | | investor who will most likely get the property. |
| goes to the lender to cover the loan. | | | | It is not always easy contacting distressed |
| 2. Foreclosure by Judicial Sale. | | | | homeowners in this pre foreclosure stage. This |
| In the states that follow judicial foreclosure, when | | | | why many foreclosure investors prefer to wait |
| the homeowner defaults on the house payment, | | | | until the official foreclosure notice is posted. Some |
| the bank or lender files a claim for the balance of | | | | homeowners remain in denial and may be unwilling |
| the loan from the homeowners. The courts work | | | | to accept the fact that foreclosure is imminent. |
| out the settlement but this can take up to six | | | | The posting of the NOD removes any doubt and |
| months or even longer to resolve. During this | | | | may spur the homeowners on to take action. |
| time, unless the borrowers can work some | | | | What useful information does the foreclosure |
| solution out with the bank, the chances of losing | | | | investor find on the Notice Of Default? |
| the home is excellent. | | | | * Lists the names of the homeowners so you |
| So what happens when homeowners miss a | | | | can personalise your approach. |
| couple of house payments? The lenders send out | | | | * The name of the attorney or trustee in charge |
| reminder notices. One will arrive probably a | | | | of the liquidation process. |
| fortnight after the first missed payment. When it | | | | * The location of the property or a legal address |
| time for the next payment the 30 day notice will | | | | so that you find out the information you desire. |
| be sent and probably late fees will be added. If | | | | * The name of the bank or lender foreclosing on |
| the homeowner does not contact the bank as is | | | | the property. |
| often the case, the next letter is at 60 days and | | | | Every bit of research the foreclosure investor |
| is more serious. At 90 days the bank commences | | | | does on the property being foreclosed upon is |
| formal proceedings. Their attorney then posts out | | | | going to assist him in putting together a deal that |
| the Notice of Default notifying the borrower that | | | | benefits everyone involved. |
| they have failed to fulfill their payment obligations. | | | | Just because a Notice Of Default is posted it does |
| It is also published in a publicly accessible | | | | not necessarily mean that the property is going to |
| publication such as the local newspaper, a fortnight | | | | be auctioned off. Any time prior to the sale, the |
| to several weeks prior to the auction. | | | | homeowners can work with the lender to cancel |
| It is during this stage that the homeowner should | | | | or at least delay the foreclosure sale. |
| be taking action and not suffer from the dreaded | | | | For this reason it is important for investors to |
| paralysis of analysis. It is also the best time for | | | | watch the properties from the day the |
| foreclosure investors to initiate some form of | | | | foreclosure notice is posted to the time they are |
| contact. In most cases the best option for the | | | | sold. Sometimes an investor may find that a |
| homeowner is to sell up and find somewhere else | | | | particular foreclosure sale is adjourned and by |
| to live. | | | | following the adjournments the investor can find |
| Whether you sell computer software or invest in | | | | out when the property does go up for sale. If |
| foreclosure properties, any successful business | | | | patient the investor may be able to contest the |
| owner will tell you there is always required reading. | | | | property with less competition |
| In the case of investing in foreclosure properties, | | | | Summing up, if you find out about prospective |
| the required reading is the weekly foreclosure | | | | foreclosure properties prior to the posting of the |
| notices. For these types of investors the | | | | foreclosure notice and if you can handle dealing |
| foreclosure process starts to get serious when | | | | with distressed homeowners during the pre |
| the Notice Of Default (NOD) or the Notice of | | | | foreclosure period, you have the competitive |
| Foreclosure is posted. It is a public document and | | | | edge. The next best thing is to do your required |
| the investor needs to find where to find it. The | | | | reading and take action to contact the |
| requirements for posting foreclosure notices vary | | | | homeowners. |
| depending on where you reside. As a foreclosure | | | | |