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Resources

Finding Pre-Foreclosure Home Owners

When the appropriate document (Notice of Default or Lis Pendens) is recorded by the lender, the information about that default is public record which allows you to find and contact these owners of pre-foreclosures. It is important to realize the lender has no authority to sell or transfer ownership of the property at this point, and will not release information to anyone other than the owner or their representative.

Contact the Owner

There are three widely promoted methods to contact the owners of pre-foreclosures, the first is by mail, the second is by telephone, the third is by "door-knocking". Mailing is the easiest method to initiate, using the telephone will require some cross referencing to obtain phone numbers and will use more time, while door-knocking is extremely time-intensive and increases your expenses significantly.

PreForeclosure Contact Efficiency

Why not combine all three methods? Sending mail to a fairly wide geographic area doesn't cost any more than mailing locally. Repeat your mailings on a weekly or bi-weekly basis, keeping in mind that an effective mailing program will obtain the best results if you send at least 5 separate mailings. It's similar to the effectiveness of commercials on TV, the repeated exposure will eventually produce results. Since telephoning is going to be more time intensive, and assuming you have enough information about the owner and property to be able to find telephone numbers, phone the properties that you think have a higher probability of success. If you only want to deal with owners who have a lot of equity, select only those properties to do the additional work on. The same principal applies to door-knocking, only this selection is by area. Your time will be best spent driving to, and knocking on doors close to your work or home. Driving 45 minutes to an area, only to spend several hours driving from house to house will soon create burnout. Keep the door-knocking local, plan your route, and if possible, door-knock while you are on the way to do other things. If you develop and constantly work a system for contacting pre-foreclosures, you'll eventually get to present an offer. What should you say? The next section covers offers on pre-foreclosures.

Finding Distressed Property

Foreclosures occur when payments aren't made on a loan that is secured by real estate, and the lender takes the security(real estate) because those payments have not been made. Understanding the process, and what steps you need to take at different parts of the process, is essential to successful investing in distressed property.

Property Values and Foreclosures

While it's certainly possible to find properties selling for 50% of their potential fixed-up value, most people will find it easier, and more efficient, to focus on properties selling in the 65% to 80% of value range. Some of the value seasoned investors seek when buying these homes can come from the normal terms of the loan, such as very old loans that have been paid upon for many years. Some can come from price appreciation in a "seller's market" where homes are appreciating rapidly in price. Some can come from the lender not wanting to deal with the property due to damage or necessary repairs, where the lender will accept less than they are owed on the property. So, how do you find these properties and what steps do you take? Let's start at the beginning.

The First Step

When payments aren't being made on a loan secured by real estate, lenders will often initiate default proceedings when the third payment is missed. The owner still has possession and the right to sell or refinance the real estate, these properties will usually be called a pre-foreclosure property by many investors. Since lenders cannot release information about their distressed loans due to privacy concerns, and homeowners often do not want to publicize their situation, you need an alternate way to find these properties, along with owner contact information. That source of information is your county recorder.

The County Recorder

Virtually all documents regarding real estate transactions are recorded and filed by the county recorder, and because they are public documents, you can access and search those documents. Most properties in default can be identified by the initial foreclosure document, which in most states, will either be a Notice of Default or a Lis Pendens. A Notice of Default, or NOD, is used in non-judicial states, while the Lis Pendens is used in judicial states. Because a judicial foreclosure is a court proceeding, you may have to search court records for the Lis Pendens instead of the recorder's office, local procedures vary throughout the US. Also keep in mind that all Lis Pendens are not loan defaults, Lis Pendens means there is a legal action pending, and many Lis Pendens will not be anything of interest to you.

In a simple world, you'd be able to find your target properties by asking your county recorder for a list of all the NOD's or Lis Pendens recorded that week, and they'd give you the list, with names, addresses and phone numbers along with other information you might want. It doesn't work that way. But, since many recorders have established searchable websites, you can do something similar. Use the online recorder's site to find properties by searching for those document types. That should get you a list of owner names and document numbers. If you can't view the actual documents online, you'll then have to physically go to the recorder's office with your list, search by owner name or document number, and look at the document (Notice of Default, or Lis Pendens) which will reference the original loan, the property address and the default amount.

Public Records Links- (see online workspace)

DC

PG COUNTY MD

NORTHERN VA

Foreclosure Basics

Each state in the United States has it's own procedures for how a lender can foreclose on a loan in default. These procedures are determined by state law and although the procedures and time frames can vary widely, there are common characteristics to all of them. The biggest difference in the foreclosure process between states is the use of either judicial or non-judicial foreclosure, which simply means the foreclosure will be handled through the courts (judicial), or handled outside the courts by advertisement and publication (non-judicial).

There are also three phases to the foreclosure process that need to be discussed, the default phase, the auction phase and the REO (foreclosure) phase. Understanding the type of foreclosure process, and the current stage of the process will often help to determine what sort of foreclosure data you may need which could range from simply clipping newspaper advertisements up to subscribing to a multi-county foreclosure data provider with other liens and property comparable sales included.

Loan Origination Requirements

When a person is seeking a loan to purchase a home, the lender will usually require some down payment to make sure the borrower has something "at stake" in case the borrower runs into some financial difficulty and thinks about maybe not making timely payments. Many years ago, 20% of the purchase price of the property was considered a normal down payment, the acceptance of government backed loans and mortgage insurance companies has reduced this down payment requirement to as little as 3% of the property purchase price required as down payment, or in some very good credit cases even 0% down. Then the market crash in 2008 and now 2011 they have brought it back. We'll discuss this more later but for now, remember that when the loan was originated, the lender felt the loan amount was somewhere between 3 and 10 percent below the property value at that point in time.

Who Owns the Loan?

With the exception of smaller regional lenders, most lenders in today's environment do not originate and service their own loans. Most loans today are originated by one lender, using guidelines provided by the institution to whom they would like to sell the loan. Then the loan (note) is sold to that secondary lender who will continue to service the loan, meaning collecting monthly payments, maintaining any escrow accounts for property insurance and property taxes, and interface with the borrower regarding the borrower account. It is very common with home loans for the home loan to be originated with one lender, the note serviced by a different lender, and ownership of the note held by a third lender or financial institution. While the servicing lender is, for most intents and purposes, the foreclosing lender, their procedures for completing the foreclosure and handling the property post-foreclosure will be dictated by the institution owning the note.

Mortgage Insurance & Loan Guarantees

Lenders are often guaranteed against loss on their notes by Housing and Urban Development (HUD), the Veterans Administration (VA), or one of many mortgage insurance companies. When a new home loan is originated with less than 20% down payment, the originating lender qualifies the borrower using the requirements of the guaranteeing agency. The loan isn't funded using any money from these agencies, they are acting in a capacity more like insurance, where they collect a fee and only get directly involved when something bad happens, which in this case would be a default in payments, and a possible foreclosure. If a default in payments occurs, the guaranteeing agency will require the lender to follow certain steps to try to make the loan performing once again. If those attempts are unsuccessful, then the guaranteeing agency will have requirements for the lender to follow through the foreclosure process. Post-foreclosure, the guaranteeing agency will reimburse the lender for either all, or most of the loss incurred on the foreclosed loan.

Mortgages, Deeds of Trust and the Foreclosure Process *

When a home loan is originated, a security instrument is required to tie the note to the collateral, those security instruments will usually be a mortgage or trust deed.   So, as part of the documents signed when a home is purchased, there will be a promissory note where the borrower promises to repay the money they have borrowed to purchase the property and the security instrument attaching the note to the collateral and also specifying what constitutes loan default. 

Judicial Foreclosures

Judicial foreclosures are normally conducted in states where a mortgage is used as the security instrument. The foreclosure process begins with the lender filing a complaint and a notice of Lis Pendens in the county where the property is located, these will normally be filed with the circuit court.  After the complaint and notice are filed, all defendants must be notified of the court action by a process server, or in some cases, by mail.  After the service of process is complete, the lender will seek an entry of judgment or summary judgment.  The judgment will have the entire amount due the lender and set a sale date for the property.  Newspaper publication of the upcoming sale will usually be required once a week for two or three weeks, then the property will be sold at public auction either by a clerk of the court or a sheriff.   A certificate of sale will be issued by the court usually between a few days to a few weeks after the sale.  The certificate of sale transfers ownership of the property to either the high bidder at the auction, or the lender if the lender was the high bidder.  It is important to note that each state has specific procedures and timelines for this process that can be found in your state statutes.

Important Milestones:
Filing of Lis Pendens
Entry of Judgment
Newspaper Publication of Sale
Public Auction
Certificate of Sale

Non-Judicial Foreclosures

Non-judicial foreclosures are normally conducted in states using a deed of trust as the security instrument.  The process varies widely by state, with some states requiring nothing more than publication of the Notice of Sale, others will require two or three steps to complete the foreclosure process.  In states where a Notice of Default is used, the Trustee will usually record the Notice of Default along with mailing the notice to the homeowner, wait through the statutory period for owner reinstatement, then record, mail to the homeowner and publish in the newspaper a Notice of Trustee Sale.  The Notice of Trustee Sale will define the place of sale, the estimated opening bid, the property address and the date and time of the sale.  Auctions are held in a public place, which can range from in front of the property being sold to the more common locations of the local courthouse steps or civic areas.  The successful bidder at the auction will receive a Trustee's Deed to the property usually within 30 days of the sale.    It is important to note that each state has specific procedures and timelines for this process that can be found in your state statutes.

Important Milestones:
Notice of Default
Notice of Trustee Sale
Newspaper publication of Sale
Public Auction
Trustee's Deed upon Sale

Judicial and Non-Judicial Foreclosures

Each state in the U.S. handles it's real estate foreclosures differently, it's important to understand those differences and know your specific state's procedures. The terms used and time frames vary greatly from state to state, but the following information provides a general overview of the different processes and considerations. If you haven't done so yet, you can review our guide to each state's procedures at foreclosure procedures.

Judicial Foreclosures

Judicial foreclosures are processed through the courts, beginning with the lender filing a complaint and recording a notice of Lis Pendens. The complaint will state what the debt is, and why the default should allow the lender to foreclose and take the property given as security for the loan. The homeowner will be served notice of the complaint, either by mailing, direct service, or publication of the notice, and will have the opportunity to be heard before the court. If the court finds the debt valid, and in default, it will issue a judgment for the total amount owed, including the costs of the foreclosure process. After the judgment has been entered, a writ will be issued by the court authorizing a sheriff's sale. The sheriff's sale is an auction, open to anyone, and is held in a public place, which can range from in front of the courthouse steps, to in front of the property being auctioned. Sheriff's sales will require either cash to be paid at the time of sale, or a substantial deposit, with the balance paid from later that same day up to 30 days after the sale. Check your local procedures carefully. At the end of the auction, the highest bidder will be the owner of the property, subject to the court's confirmation of the sale. After the court has confirmed the sale, a sheriff's deed will be prepared and delivered to the highest bidder, when that deed is recorded, the highest bidder is the owner of the property.

Non-Judicial Foreclosures

Non-judicial foreclosures are processed without court intervention, with the requirements for the foreclosure established by state statutes. When a loan default occurs, the homeowner will be mailed a default letter, and in many states, a Notice of Default will be recorded at approximately the same time. If the homeowner does not cure the default, a Notice of Sale will be mailed to the homeowner, posted in public places, recorded at the county recorder's office, and published in area legal publications. After the legally required time period has expired, a public auction will be held, with the highest bidder becoming the owner of the property, subject to their receipt and recordation of the deed. Auctions of non-judicial foreclosures will generally require cash, or cash equivalent either at the sale, or very shortly thereafter.

It is important to note that each non-judicial foreclosure state has different procedures. Some do not require a Notice of Default, but start with a Notice of Sale. Others require only the publication of the Notice of Sale to announce the sale, with no direct owner notification required. You need to know the specific procedure for your state.

State by State Foreclosure Procedures

This is a general guide only, laws change and you need to check your state statutes for accurate, up to date procedures. Foreclosure type will most often be either judicial or non-judicial, if you have a specific question about a state process, you can ask it on the discussion board. Months to foreclose include the legal minimum required and the probable time length once foreclosure has begun. Deficiency judgments are available in some states if the lender loses money through the foreclosure process, if it is not practical for the lender to enforce a judgment, it will be listed. Homeowner redemption after foreclosure is possible in some states, the time periods are listed where available.

STATE	TYPE OF FORECLOSURE	MONTHS TO FORECLOSE MINIMUM/EXPECTED	DEFICIENCY JUDGMENT	REDEMPTION PERIOD
Alabama	Primarily Non-Judicial	1/3	Possible and Practical	12 Months
Alaska	Both	3/4	Not Practical	None
Arizona	Both	3/4	Not Practical	None
Arkansas	Both	4/5	Possible and Practical	None
California	Primarily Non-Judicial	4/4	Not Practical	None
Colorado	Both	2/5	Possible and Practical	75 Days
Connecticut	Judicial/Strict	5/6	Possible and Practical	None
Delaware	Judicial	3/7	Possible and Practical	None
District of Columbia	Non-Judicial	2/4	Possible and Practical	None
Florida	Judicial	5/5	Possible and Practical	None
Georgia	Primarily Non-Judicial	2/2	Possible and Practical	None
Hawaii	Primarily Non-Judicial	3/4	Not Practical	None
Idaho	Non-Judicial	5/6	Possible and Practical	None
Illinois	Judicial	7/10	Possible and Practical	None
Indiana	Judicial	5/7	Possible and Practical	3 Months
Iowa	Both	5/6	Not Practical	6 Months,if judicial
Kansas	Judicial	4/4	Possible andPractical	6-12 Months
Kentucky	Judicial	6/5	Possible and Practical	None
Louisiana	Judicial	2/6	Possible and Practical	None
Maine	Primarily Judicial	6/10	Possible and Practical	None
Maryland	Judicial	2/2	Possible and Practical	None
Massachusetts	Non-Judicial	3/4	Possible and Practical	None
Michigan	Both	2/2	Possible and Practical	6 Months
Minnesota	Both	2/3	Not Practical	6 Months
Mississippi	Primarily Non-Judicial	2/3	Possible and Practical	None
Missouri	Primarily Non-Judicial	2/2	Possible and Practical	None
Montana	Primarily Non-Judicial	5/5	Not Practical	None
Nebraska	Judicial	5/6	Possible and Practical	None
Nevada	Primarily Non-Judicial	4/4	Possible and Practical	None
New Hampshire	Primarily Non-Judicial	2/3	Possible and Practical	None
New Jersey	Judicial	3/10	Possible and Practical	10 Days
New Mexico	Judicial	4/6	Possible and Practical	None
New York	Judicial	4/8	Possible and Practical	None
North Carolina	Non-Judicial	2/4	Possible and Practical	None
North Dakota	Judicial	3/5	Not Possible	60 Days
Ohio	Judicial	5/7	Possible and Practical	None
Oklahoma	Primarily Judicial	4/7	Possible and Practical	None
Oregon	Non-Judicial	5/5	Not Practical	None
Pennsylvania	Judicial	3/9	Not Practical	None
Rhode Island	Both	2/3	Possible and Practical	None
South Carolina	Judicial	6/6	Not Practical	None
Tennessee	Non-Judicial	2/2	Possible and Practical	None
Texas	Non-Judicial	2/2	Possible and Practical	None
Utah	Both	4/5	Possible and Practical	None
Vermont	Both	7/10	Possible and Practical	None
Virginia	Non-Judicial	2/2	Possible and Practical	None
Washington	Non-Judicial	4/5	Not Practical	None
West Virginia	Non-Judicial	2/2	Possible and Practical	None
Wisconsin	Judicial	varies/10	Not Practical	None
Wyoming	Non-Judicial	2/3	Possible and Practical	3 Months

Pre-foreclosure List Sources

Preforeclosures are usually considered to be properties where a Notice of Default has been filed in a Deed of Trust state, or a mortgage related Lis Pendens has been filed in a Mortgage state. You can find an outline of the common process in each state. The list below contains providers of Default, Sheriff's Sale and Trustee's Sale auction data listed by state and/or county. Some data providers will also provide listings of properties when they become bank owned, or REO. Many will charge a monthly fee for subscription, companies with free information are marked "FREE".

RETRAN
Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties in California. Notice of Default, Trustee Sale, and REO data. Provides auction tracking and 5 property comparables.

FORECLOSURE ACCESS
Daily listing and tracking of San Diego, California Notice of Default, Trustee Sale and Trustee's Deed information

COUNTY RECORDS RESEARCH
Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties in California. Las Vegas/Clark County in Nevada. Notice of Default and Trustee Sale data.

FORECLOSURE RADAR
Geared towards the professional foreclosure auction investor.

THE BLUE SHEET
Trustee Sales and Default information for Santa Clara County in California

SANTA CRUZ RECORD - INVESTORS EDGE
Monterey, San Benito and Santa Cruz counties in California

IronScope
Colorado auction and short sale information. Educational seminars and a free trial are available.

FAST PROPERTY DATA
Default information for Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer and Weld counties in Colorado. - Has current REO also

THE WARREN GROUP
Connecticut, Rhode Island and Massachusetts petitions to foreclose, Sheriff Sales, Lis Pendens.

CHICAGO FORECLOSURE REPORT
Cook County, Illinois mortgage lawsuit information

MARTIN, LEIGH, LAWS & FRITZLEN, P.C.
FREE INFORMATION for Kansas and Missouri. Their auctions only, information is updated regularly, click on the "Foreclosures" link in the center bottom of the page.

SOUTH & ASSOCIATES
FREE INFORMATION for Kansas and Missouri. Their auctions only, information is updated regularly.
"Sales Online" is in the top right. Submitted by Jo-Ann

FRIEDMAN & MACFADYEN, P.A.
Maryland, District of Columbia and Virginia auctions. Their auctions only

TIDEWATER AUCTIONS
Anne Arundel, Baltimore City, Baltimore County, Calvert, Caroline, Montgomery, Prince George's, Washington counties in Maryland. Their auctions only.

LVDEFAULT
Clark County,Nevada Notice of Default and Notice of Trustee Sale data They also have an master calendar of upcoming and postponed Trustee Sales

REAL DATA
New Hampshire & Vermont

NEW JERSEY PRE-FORECLOSURES.COM
Lis Pendens filed in all 21 counties in New Jersey

PROFILES PUBLICATIONS
Lis Pendens and foreclosure auctions for Manhattan, Queens, Brooklyn, Bronx and Staten Island in New York

FORECLOSURE UPDATE OF NEW YORK
Bronx, Brooklyn, Manhattan, Nassau, Queens, Staten Island, Suffolk and Westchester counties in New York

INVESTOR ONLINE
North and South Carolina information

PAUL E. SAPERSTEIN
FREE Rhode Island and Massachusetts. Their auctions only

FORECLOSURE LISTING SERVICE
Dallas-Ft. Worth, TX Houston, TX available from their Real Estate Links page. Has current REO also

REAL DATA, INC.
Data for Harris County, TX

Free Pre-Foreclosure List Sources

The list below the search box has links to sites offering free lists of preforeclosures. The list is organized with sources serving multiple states listed first, then sources serving one state or county listed alphabetically by state. If preforeclosures are your main interest, you may also want to read our pages starting at Owners of Preforeclosures.

RECONTRUST
Use the list on the left side of the page to choose from either "Available" properties or "Sold" properties in Alaska, Arizona, California, Idaho, Montana, Nevada, Oregon, Virginia or Washington. The number of properties available in each state is listed next to the state. ReconTrust is a subsidiary of Countrywide Bank which is now owned by Bank of America.

FIDELITY NATIONAL - AGENCY SALES & POSTING
Free, but you have to sign up to use the service. They have properties in Arizona, California, Florida, Hawaii, Maryland, Michigan, Montana, Nevada, Oregon, Utah, Virginia and Washington. The site will sometimes be slow to use.

USA-FORECLOSURES.COM
NorthWest Trustee Services supplies the properties. They have a map in the center of the page, you can choose the state, and then the county for the states of Alaska, California, Idaho, Montana, Ohio, Oregon, Texas and Washington. You can hover your mouse over each state to see how many properties are available in that state.

NATIONAL DEFAULT SERVICING CORPORATION
Not database driven, it's a list with property in California and Nevada There are two links, one for pending sales and one for sales results.

REGIONAL TRUSTEE SERVICES
Click the "Sales List" link on the left side which takes you to a US map. Click on state, then click the "View Sale List" button.
Serve Alaska, Arizona, California, Idaho, Montana, Nevada, Oregon, Washington

FORECLOSURESNOW.COM
Auction properties from Midland Mortgage.
Search by state, or use their custom search.

LAW OFFICE OF D.L. DRAIN, P.A.
Pending Trustee Sales in Phoenix Metro, Arizona

THE DAILY TERRITORIAL
Trustee sales in Pima County, Arizona

NORTH COUNTY TIMES
Upcoming Sales in North San Diego and Riverside counties, scroll through or put "trustee" in the search box.

BROOMFIELD COUNTY PUBLIC TRUSTEE
Click on the "Outstanding Foreclosures" link.
Broomfield County, Colorado

JEFFERSON COUNTY PUBLIC TRUSTEE
Use the NED Date Range search to get current pre-foreclosures
Jefferson County, Colorado

CONNECTICUT FORECLOSURE SALES
Public notices of upcoming foreclosure sales. Select "Foreclosure-Sale" for the Category, then hit Search.

THE WASHINGTON POST
Enter "trustee sales" in the keyword search box.
Trustee sales for District of Columbia, Maryland and Virginia

IDAHO FORECLOSURE SALES
Public notices of upcoming foreclosure sales. Select "Foreclosure-Sale" for the Category, then hit Search.

MAINE FORECLOSURE SALES
Public notices of upcoming foreclosure sales. Select "Foreclosure-Sale" for the Category, then hit Search.

MASSACHUSETTS FORECLOSURE SALES
Public notices of upcoming foreclosure sales. Select "Foreclosure-Sale" for the Category, then hit Search.

COLUMBIA DAILY TRIBUNE
Trustee Sales for Columbia, Missouri

NEW HAMPSHIRE FORECLOSURE SALES
Public notices of upcoming foreclosure sales. Select "Foreclosure-Sale" for the Category, then hit Search.

MONMOUTH COUNTY SHERIFF
Upcoming Sheriff's sales for Monmouth County, New Jersey. Click on the "foreclosures" link, then the upcoming sales.

PENNSYLVANIA FORECLOSURE SALES
Public notices of upcoming foreclosure sales. Select "Foreclosure-Sale" for the Category, then hit Search.

COMAL COUNTY CLERK
Scroll down and click on the "Foreclosure image notice posted for" link.
Comal county has their notices organized by the date they were posted in a big .pdf file, which Adobe Acrobat can open. Acrobat can be downloaded for free. Comal County, Texas

Trustee Sale Foreclosure Auctions

TRUSTEE SALE PROPERTIES ARE SOLD "AS-IS, WHERE-IS" FOR CASH OR CASH-EQUIVALENT. USE EXTREME CAUTION WHEN BUYING AT TRUSTEE'S SALE.

Information is everything! Up to date accurate information is essential for investing in foreclosures. You will need a source for knowing what properties are going to sale, for how much and when. Please see Pre-Foreclosure Information for some sources or realtytrac.com . Foreclosure sales are commonly postponed for many reasons, some because owners are trying to save the property, others because the lender needs more time for proper processing. You will need to track properties you are interested in, making sure to record postponement dates and reasons for postponement. KEEPING AN ACCURATE DATABASE IS ESSENTIAL. When a property has postponed many times, other investors will sometimes lose track of properties you are interested in, thus reducing competition at the actual sale.

Properties are tracked using a Trustee Sale Number (TS#). This number is generated by the trustee when a property enters foreclosure and is used by the interested parties. When you are seeking information regarding a property, this number is usually used to reference the property. Trustee's are the ones usually processing a foreclosure, typically the only information they will give out regarding a property will be the date, time and location of a sale along with a bid if it is available or a postponement date and reason if the sale postpones.

Bids are available shortly before the sale, this can range from the day before up to the actual time of sale. When a bid is available, there is a good probability the property will be going to sale instead of postponing. Be aware that published bid amounts will differ from the actual bid amount at the sale. Sometimes they will be slightly higher to cover actual costs and sometimes the lender will reduce a bid making a property an attractive purchase.

Posting companies handle the publication and posting of foreclosure notices along with acting as the auctioneer at the sale site. Typically cancellations of sales are announced, then postponements followed by properties going to sale. Again, everything is referenced by TS#, pay attention so you don't miss properties you are interested in.

THE TRUSTEE SALE.

The auctioneer will ask if anyone wants to qualify, either before all properties are announced or before individual properties are announced. To qualify, you will need to show the auctioneer cash or cashier's checks sufficient to cover any bids you will be making. Some Trustees specify checks are to be made out to them, usually you can get cashier's check made payable to you, then if you are a successful bidder, you endorse them payable to the Trustee. Common practice is to have large checks to cover most of the expected bid, with smaller checks to cover increases in the bidding. You really do not want to have one check for $300,000 if you are going to be bidding on a $150,000 house or if you will want to buy more than one property. Once you sign your check over, you will not have the surplus funds available for a while. When bidding and qualifying, keep in mind that anyone around you is a prospective bidder, if you allow them to see the maximum amount you can bid to, you have weakened your position. The same holds true for notes you have written or numbers, keep your information private!

BIDDING. The auctioneer will ask if anyone would like to bid when they are auctioning a property. If it is a property you are interested in, your bid should be a penny over the opening bid. The property will not sell until the third call and some people like to wait and see if anyone else is showing an interest. Relax, wait to see if other bidders are going to jump in, if no one does put your "penny over" bid just before the third call. If other bidders are interested in the same property, bids will go up usually in hundred dollar increments. Know the maximum bid you are willing to place and do not exceed that number. It's very easy to get involved in a contest of who's going to win the bid, if you are investing, you need to make a profit, not prove you can bid higher.

THE SUCCESSFUL HIGH BID

If you are the successful bidder, you will need to sign checks over to the Trustee. Usually, after all sales are complete, the auctioneer will write you a receipt, ask how title is to be held and you'll be done. The Trustee can record the Trustee's Deed for you or they will send you the deed along with any excess funds from your checks. Sales are sometimes invalidated by legal reasons, if so, you will receive your funds back. Expect to have everything done one to two weeks after the sale.

Agent Listed Property (REO AGENTS) ****

The list below is comprised of real estate agents who will have access to multiple kinds of listed property. If they are reasonably close to your area, they may be a valuable asset if you are looking to buy property.

REO Experts
Coldwell Bankers REO Agents - Submitted by Peter L.

EB Investments
California - Inland Empire and the Desert Area
Click on the buttons mid-screen for the different areas

Pocono Mountains Pa. Real Estate
Real Estate for buyers and sellers

Florida-Ocala Foreclosures-Ocala Real Estate-Dawn Rupersburg Coral Shores Realty
Get Foreclosures and short sale listings for Ocala and The Villages Florida. Full Time Realtor Dawn Rupesburg - Coral Shores Realty

Lake Mary Homes For Sale | Heathrow Real Estate | Sanford | FL Foreclosures
Lake Mary Homes & Heathrow Real Estate For Sale. Search Lake Mary, Heathrow & Sanford Foreclosures, Luxury Homes, Houses and more! View our MLS for thousands of Real Estate Lisitngs updated daily.

First Service Realty - Foreclosure Properties
Searchable list of Florida and Georgia. Hover your mouse over "Listings", then select "Foreclosure List"

Miami Business for sale
USA Lending And Realty is Florida's business-for-sale. We are a leader in providing business buying and selling in the Miami area.

Prime Estate Realty
Prime Estate Realty provides our clients most up-to-date services that include:
- Multiple Listing Services.
- Price counseling with a current market analysis.
- Internet marketing of your property and much much more.
- Commitment to excellence in all areas of the real estate industry.

Bottom Line Home
Greater Atlanta, Georgia
Click the "See Our featured Homes" button in the upper left side

Brosnan Realty Group
Lender owned property in Boston, MA metro area

Twin City Bank Homes
Access Hundreds of Twin City Bank Owned Homes, For Free
Click on "Featured Foreclosure Listings" on the left side.
Minneapolis, MN

Park Realtors
Cincinatti, OH

Coldwell Banker Heritage Realtors
Dayton, OH

Massachussetts REO
Massachussetts - Click on "Current Properties"

Highland Realty & REO
Southeast Pennsylvania - Click on "Our Listings"

REOWORLD
Not a whole lot - Click on "Properties"

Coast and Country
Riverside CA - Click "Residential" on left side

Cynthia Kenner
Austin, TX Keller Williams Realty - Click on "Listings"

indy REO
Indianapolis, IN

Bank Owned Property

BANK OF AMERICA
One of the largest lenders in the US, you can search Bank of America for residential or commercial. You can specify state, county, zipcode , price, bedrooms and bathrooms in their search form.

BRANCH BANKING & TRUST
Branch Banking and Trust has recently been acquiring smaller failed banks, they have a drop down list of states, the states with significant amounts of property were: Alabama, Florida, Georgia, Kentucky, Maryland, North Carolina, South Carolina, Tennessee, Virginia and West Virginia

CAROLINA FIRST
Listings in North Carolina, South Carolina and Florida. You have to go through their disclaimer page before searching properties and there isn't much information beyond a small picture, price, age, bedroom count, bath count and square footage.

CHASE
Select Chase homes by state map or search fields, you'll then have to fill out a CAPTCHA to obtain access, the CAPTCHA seems to like capital letters. They have homes listed in: Arizona, California, Colorado, Florida, Georgia, Illinois, Massachusetts, Maryland, Michigan, Minnesota, North Carolina, New Jersey, Ohio, Oregon, Pennsylvania, Texas, Virginia and Washington.

CITIMORTGAGE - CITIBANK
Searchable by state and property type, Citibank doesn't say how many properties are in a certain state or county but most states will have homes, try searching just the state first.

COMPASS BANK HOMES FOR SALE
Compass foreclosure listings in: Arizona, Alabama, Colorado, Florida, Georgia, New Mexico and Texas

COUNTRYWIDE
Countrywide used to be the largest independent home loan originator, now owned by Bank of America, use the link for Bank of America higher up this page.

DOWNEY SAVINGS & LOAN
Downey Savings is now part of US Bank, the link will take you to the U.S. Bank list which is actually an alphabetical list you have to scroll down.

FIFTH THIRD BANK
Michigan, Florida, Ohio, North Carolina and Indiana have the most Fifth Third properties for sale, scroll down below the search box where there is a property count by state.

CAPMARK - PREVIOUSLY WAS GMAC COMMERCIAL MORTGAGE
Berkadia Commercial Mortgage has acquired Capmark.

FLAGSTAR BANK
Mixed assortment of Flagstar bank owned real estate in different states, just scroll down the alphabetical list. Very light on property details.

GMAC MORTGAGE
Searchable database of GMAC foreclosed homes throughout the U.S., they are also very light on property details.
Contributed by Rae

HSBC HOMES FOR SALE
Most, if not all states have HSBC property, but if you want to do a new search you can't use your "back" button. You have to click the "New Search" button below the properties. Also, although the address is supposed to be clickable for details, it doesn't work and there isn't much detail.

HSBC COMMERCIAL
Did not see a whole lot of properties available, 1 exactly, in New York.

INDYMAC
Many states listed, they also have a lot of manufactured housing and land. Fast and effective search. Details are on a pop up page, there's a yellow "close" button to close the detail pop up.

MANUFACTURERS & TRADERS TRUST
Homes scheduled to foreclose, Bank Owned and Commercial properties listed.

PNC BANK
PNC residential Listings is what you'll probably want although Bank and Commercial properties are also available.

REGIONS BANK
Mostly homes for sale in the Southeastern US, you have to select "property type" before you'll get a a Regions Bank state list- Contributed by Millicent

SUNTRUST MORTGAGE
A subsection of the Res.net site

TAYLOR BEAN REO
Taylor Bean REO is a division of Taylor, Bean & Whitaker Mortgage Corp. specializing in the listing, sale and management of lender-owned properties throughout the United States. Emphasis in Georgia and Alabama, but they do have national listings.

TCF FINANCIAL
Not a database search, but individual PDF files for Minnesota, Illinois, Michigan, Wisconsin and Colorado.
Contributed by Rae

U.S. BANK
When you select a state you'll get an alphabetical list of cities you have to scroll down. No detail, just address and price.

VIRTUALBANK HOMES FOR SALE
A few homes for sale sprinkled around the country.

WACHOVIA
Wachovia had a good number of properties available with sort features to refine your search - Contributed by Rae

WASHINGTON MUTUAL
Washington Mutual was the largest Savings and Loan in the United States, now owned by J.P. Morgan Chase, the link goes to Chase homes for sale. Contributed by Rae

Most of the properties found on these links will have been rehabbed and are offered for sale by a real estate agent. If you are more interested in "as-is" type properties or properties needing significant work, you might try our page listing smaller banks. The nature of larger institutions means they'll have processes and procedures in place to bring properties to the market at, or near, marketable condition for end users. Our preforeclosure pages will also be a potential source if you are looking for property possibly needing significant work.

Asset managers will either have properties from one large lender or they will provide management for many different lenders. Our Foreclosures page has lists from large lenders and the Government Foreclosures page includes listings from Fannie Mae, Freddie Mac and HUD.

Regional Bank Foreclosed Homes

Alabama

UNITED BANK
A small list of Alabama, Louisiana and Tennessee foreclosures

Alaska

FIRST NATIONAL BANK OF ALASKA
Alaska properties - not a whole lot

Northern California

FIRST NORTHERN BANK

California

FIRST FEDERAL BANK OF CALIFORNIA
You can probably guess it's California foreclosed homes.

Florida

RIVERSIDE BANK
Searchable by County

Kentucky

REPUBLIC BANK

KENTUCKYHOUSING CORPORATION
Limited REO list in Kentucky

Michigan

ISABELLA BANK
Foreclosed properties around Harrison, Michigan

Nevada

NEVADA STATEBANK

New Jersey

UNITY BANK
Used to be New Jersey properties, now small list of commercial property in different states

North Carolina

NEWBRIDGE BANK
Small list of NC properties, scroll down and click "Iagree"

Ohio

FRANKLIN SAVINGS
Small list of properties around Cincinnati, OH

FAIRFIELD FEDERAL SAVINGS
A list, not a database

South Carolina

FIRST FEDERAL
South Carolina - They also list mobile homes

Utah

SUNFIRST BANK
Cedar City and St. George, Utah

ZIONS BANK
Properties in Utah, Idaho, Colorado, Illinois

Virginia

ALLIANCE BANK
Foreclosures in Virginia

VIRGINIA HOUSING DEVELOPMENT
Foreclosed homes in Virginia

FIRSTBANCORP
Virginia with some property in North Carolina and South Carolina

Government Foreclosures

GOVERNMENT HOME SALES
A site containing predominately VA and HUD foreclosed residential properties, submitting an offer requires the use of a real estate agent.

HUD FORECLOSURES
It's probably easier to use the Government Home Sales link listed above this one rather than working through the various HUD foreclosure listing pages.

FANNIE MAE HOMES FOR SALE (HOMEPATH)
Fannie Mae is now a government sponsored entity with their loans guaranteed by the U.S. government, Fannie Mae either owns or guarantees a large percentage of real estate loans. Searchable by city, state and ZIP code.

FREDDIE MAC (HOMESTEPS) FORECLOSURES
Searchable database by features including city, state, Zip code, county, bedrooms and bathrooms. Similar to Fannie Mae, a purchaser of loans on the secondary market.

VA FORECLOSURES
Use the Government Home Sales site, higher up this page.

FEDERAL DEPOSIT INSURANCE CORPORATION (GOVERNMENT)
National list of foreclosure houses, but not many properties.

UNITED STATES DEPARTMENT OF AGRICULTURE
You can search for single family residence, farms or multi-family property

Trustees and Posting Companies

Trustees will process your foreclosure, posting companies handle the posting, legal publication and auctioning. This is not an all inclusive list, but does include many companies with an internet presence. Trustees listed first, Posting companies listed second.

USFN
A network of Trustees and foreclosure attorneys throughout the U.S. Use the member directory to search by state.

Trustees

ALL AMERICAN FORECLOSURE SERVICE
Specializing in San Luis Obispo County, CA

AMERICAN TRUST DEED SERVICES

ASSURED LENDER SERVICES
Commercial and residential foreclosures and related services in Arizona, California, Nevada and Idaho.

BEST ALLIANCE FORECLOSURE & LIEN SERVICES

C & H TRUST DEED

CAL WESTERN RECONVEYANCE

CALIFORNIA DEFAULT SERVICES
We know that a defaulted loan ties up your capital. So, with CDS, we begin processing your foreclosure THE SAME BUSINESS DAY that we get your file, and complete your foreclosure AS FAST AS LEGALLY POSSIBLE, guaranteed.

CTC REAL ESTATE SERVICES
Countrywide's Trustee Division

COUNTY RECORDS RESEARCH

FCI LENDER SERVICES
FCI has an excellent reputation for processing foreclosures efficiently and professionally.

FIRST AMERICAN FORECLOSURE TRUSTEE SERVICES
First American LoanStar Trustee Services provides a complete suite of foreclosure trustee services to assist with each case and individual client.

INTEGRATED LENDER SERVICES
Integrated Lender Services is the only place to turn for complete, foreclosure and default management services.

PLM FORECLOSURE SERVICE

PREMIER FINANCIAL ASSOCIATES,INC.
Premier Financial Associates is a full service trustee company established in 1994 to meet the needs of financial institutions as well as Homeowner Associations. We provide foreclosure and lien services in California, Nevada, Arizona, Oregon and Washington.

REDWOOD TRUST DEED

RELIABLE FORECLOSURE
It's our goal to insure that our clients receive quality information and the best representation possible throughout the foreclosure process.

RELIABLE TRUST DEED SERVICES

REGIONAL TRUSTEE SERVICES
Foreclosure, bankruptcy, eviction and post-sale related services in Washington, Oregon, California, Nevada, Arizona, Idaho, Alaska, and Montana.

SBS TRUST DEED NETWORK
SBS Trust Deed Network, a financial services company located in Westlake Village, California, has been providing a complete spectrum of trustee services since it was founded in 1978. SBS provides foreclosure services in California, Arizona, Washington and Nevada.

SEASIDE TRUSTEE, INC.
Seaside Trustee will process foreclosures in Arizona, California, Nevada, Oregon and Washington.

STANDARD TRUST DEED
Some forms and links. Process foreclosures in AZ, CA, NV, OR, WA

T.D. SERVICE

TRUSTEE CORPS

WEST COAST POSTING & PUBLISHING
Search by Trustee Sale Number, or find sale sites in California, Nevada and Washington

WOLF & RICHARDS

POSTING COMPANIES

BECKSTROM POSTING
No searchable database, but they provide personalized services for the Southern California region.

PACIFICA POSTING SERVICES

RSVP FORECLOSURES
Has an online list of properties scheduled for sale

PRIORITY POSTING
Searchable database of properties scheduled for sale using the Trustee Sale Number

AGENCY SALES AND POSTING
Searchable database of properties scheduled for sale by date and location

MK CONSULTANTS
Foreclosure service for trustees offering services on full-cycle foreclosure settlements and legal publishing (Trustee's Sales, Articles of Incorporation, Notice to Creditors, LLCs, Summonses, Etc.)nationwide.

Broker Price Opinion (BPO's) Sign Ups

These pages are the sign-up pages for Brokers/Agents who would like to apply for providing Broker Price Opinions. Some companies also have clean up/preservation work and full appraisal needs. If they provide property lists, they'll already be listed on our Foreclosures page.

CLEAR CAPITAL
Free to sign up, you'll need your license information, contact information and preferred zip codes.

FISERV LENDING SOLUTIONS
I'd never make the dress code requirement

LIGHTHOUSE REAL ESTATE SOLUTIONS
Minimum requirement of having held a salesperson license for at least 2 years

HOMEQ SERVICING
Looks like you have to Contact Your State Specific Representative, there's a button for it.

INTEGRATED ASSET SERVICES
IAS also has BPO training available.

KEYSTONE ASSET MANAGEMENT
The link is to their agent requirements, you'll have to use their "contact us" link.

MICHAELSON, CONNOR & BOUL
It's unclear from their site whether they are currently seeking BPO agents.

NATIONAL DEFAULT SERVICING
Couldn't find a list of properties, they had one featured property in CT

NATIONAL FORECLOSURE SERVICES
Bright colors. Didn't see much in the way of property listings except for FL and some in NC and SC

NETWORK MORTGAGE SERVICING
Didn't see an online signup form, they request you send them your contact information and service area.

SECURITY NATIONAL
Pretty straightforward sign-up page.

TR.E.O.

COMPANIES WITHOUT A SIGN-UP PAGE

GOODMAN DEAN

LENDERS ASSET MANAGEMENT CORPORATION (LAMCO)

SAFEGUARD PROPERTIES
You'll have to click the "CONTACT" button, then there's an email link on the right side of the contact page.

Industry Links

Pretty self explanatory, if you know of other relevant industry sites, please e-mail, we will include any link that provides foreclosure industry information or resources.

PROFESSIONAL LIABILITY INSURANCE PROGRAM
For foreclosure trustees and financial institutions from commercial insurance brokerage.

SCOTSMAN GUIDE
The Leading Resource for Mortgage Originators Information and resources for industry professionals, not homeowners.

REOMAC
REOMAC is an association providing education and networking opportunities for loss mitigation / default servicing professionals.

FORECLOSURE, INTERNATIONAL REAL ESTATE DIGEST
The foreclosure section of the Premier Internet Real Estate Directory

REO MAGAZINE
A magazine geared towards REO professionals

CALIFORNIA MORTGAGE BANKERS ASSOCIATION

MORTGAGE BANKERS ASSOCIATION OF AMERICA
Producers of the National Delinquency Survey, there's a lot of information available at this site including reports and predictions.

MORTGAGE INDUSTRY BUYERS GUIDE

USFN RESOURCES
Foreclosure Industry Resources

MORTGAGE BANKING TRAINING
by the Wolf Firm

AMERICAN LEGAL & FINANCIAL NETWORK
America's Forum for Mortgage Banking Solutions

Foreclosure Processing Firms

HUNT, LEIBERT. CHESTER & JACOBSON, P.C.
Connecticut

TROTT & TROTT, P.C.
Michigan

WILFORD & GESKE, P.A.
Minnesota

DRUCKMAN & SINEL, LLP
New York

BRICE, VANDER LINDEN & WERNICK, P.C.
Texas

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Stop Foreclosure

• Can Bankruptcy Stop Foreclosure?
• Is There Government Help To Stop Foreclosure?
• Are There Loans For People In Foreclosure?
• Is There Other Financial Help To Stop Foreclosure?

These are common questions when a homeowner is facing foreclosure, we'll try to get those answered for you, along with more frequently requested information on stopping foreclosure.

First, we define foreclosure as the legal process lenders use to try to recover the loan amounts they are due on past due home loans and acknowledge most lenders, in fact, do not want to own your house and would rather have the loan paid off, or the loan payments being currently paid. We will also use the term "lender" although in many, if not most situations, you're really dealing with a loan servicer.

Repayment Plan

The preferred workout to get a loan current after the borrower has suffered a temporary financial setback is a payback plan. This will usually require a substantial "down payment" on the past due amount and increased payments over the next three to six months to bring your loan current. This type of plan is good if there was a fairly short term, one time financial setback, it doesn't make sense if there's long term loss/reduction in income. In many cases, the homeowner can successfully complete this process on their own if they have the time to properly assemble and submit a complete loan workout documentation package for lender review.

Loan Modification

HAMP is the widely promoted, government sponsored plan to try to assist homeowners facing either imminent default or foreclosure. There must be a defined hardship, which could be a loss in income or an increase in monthly payments, but the determination will have to be made that foreclosure is inevitable without a modification. The home must be owner occupied to qualify, but the loan amount can be greater than the property value. The borrower cannot have sufficient liquid assets to be able to make payments in the future. Income requirements are based on gross income and will be verified by the last tax returns filed by the borrower. The target payment is 31% of monthly gross income which is allotted to principal, interest, taxes and insurance on the home. Total debt payments need to be under 55% of monthly gross income. The payments are reduced by either/both of extending the repayment term to 40 years and reducing the interest rate on the loan, debt forgiveness is not currently used.

Produce The Note

While not a way to stop foreclosure, in states using a judicial foreclosure process, a produce the note strategy can postpone foreclosure for a significant time period. Most, if not all, states require the lender/servicer as part of the foreclosure process to confirm they are owed the debt. Produce the note is a defense asserting the lender/servicer is not the one to whom the debt is owed. With the increase in loan securitization and transfer of loan interests, it is sometimes difficult for a lender/servicer to provide a complete paper trail proving loan ownership.

There is a new book out called:Fight Foreclosure!: How to Cope with a Mortgage You Can't Pay, Negotiate with Your Bank, and Save Your Home At $19.95 it's worth it just for the education

Keeping vs. Selling When Facing Foreclosure

If your monthly house payment (including property taxes and insurance) does not exceed 40% of your gross monthly income, it should be possible for you to keep the property. If the payment is greater than 40% of gross monthly income, consider selling or transferring the property to avoid negative impacts to your credit. The objectives in order of importance should be:

1. Keeping the property if possible.

2. Don't give away equity if you can keep it or liquidate and put it in your pocket.

3. Minimize damage to your credit. You will need it later on.

Loans for People in Foreclosure

Basic lending guidelines will require all home loans will total up to less than 70% of the current market value of the property. If you have more equity than that, it should be possible to obtain a new refinance or 2nd Trust Deed to bring your loan current. Expect higher interest rates and loan fees. If your existing loan(s) are close to the property value, this isn't a viable option.

If you experienced a temporary financial setback that has since been cured and are going to be able to keep the property, first consider family and friends for a loan to get current. It's much cheaper than hard money loans, but MAKE SURE you will be able to pay them back. You do not want to put them in the position of having to foreclose to get their money back. Hard money loans are typically private investors who will lend money based on equity in the property. Credit and income are not issues of importance and loan approval is usually a matter of days with funding following shortly. Loan amounts will usually be enough to bring existing loans current, pay the financing costs and put some money in your pocket. Loans will be amortized over 30 years to keep the payments lower and the balance will be due in 2 to 5 years.

Bankruptcy and Foreclosure

This is a major step that will have lasting impact on your credit reports for 7 to 10 years. Seek appropriate legal advice. When bankruptcy is filed, an automatic stay is placed on collection activities, including foreclosure activities. In a Chapter 13 bankruptcy repayment plan, the past due loan amounts can be spread over a 3-5 year period, in a Chapter 7 liquidation, the lender will seek relief from stay allowing them to proceed with foreclosure. If the Notice of Default or Lis Pendens has just been filed on your home, you have sufficient time to explore the options for new loans or selling the property. If the public auction is going to be held very shortly, Chapter 13 bankruptcy is a very common way to delay the sale. When you file bankruptcy, your financial matters fall under the jurisdiction of the courts which could limit your options. SEEK LEGAL ADVICE.

Foreclosure Assistance Links

FORECLOSURE RESOURCES FOR CONSUMERS
From the Federal Reserve Board

HOMEOWNERSHIP PRESERVATION FOUNDATION
Free counseling and planning for foreclosure prevention

NEIGHBORWORKS AMERICA
Local resources for assistance and foreclosure prevention

FREDDIE MAC AVOIDING FRAUD VIDEO
A short video on avoiding mortgage fraud

WORKOUTS FOR HOME LOANS
A link explaining the various types of workouts available from many lenders. You can also click on the following link to ask questions on our Foreclosure Forum.

HOW TO AVOID FORECLOSURE
Advice from HUD

DEPARTMENT OF VETERANS AFFAIRS
Advice when you have trouble making payments

CONSUMER CREDIT COUNSELING SERVICE
Non-profit help for establishing a direction or plan to avoid foreclosure.

PRO-BONO LEGAL ASSISTANCE
If you feel you need legal help and cannot afford it, this is the ABA directory state by state of legal providers doing pro-bono (without fee) work.

REINSTATEMENT SERVICES, INC.
Fee for service. Lender workout assistance for preventing foreclosure.

VOLUNTEER LAWYERS PROJECT
MAINE Pro-bono assistance

AVOID FORECLOSURE - FORECLOSURE HELP NATIONWIDE
Foreclosure prevention utilizing nationally recognized Mortgage Assistance Programs. Foreclosure help without Bankruptcy. Keep your home.

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Stop Foreclosure with Bankruptcy

Bankruptcy does NOT STOP foreclosure. It puts a hold on foreclosure which can allow you time to reorganize your finances possibly allowing you to stop foreclosure. Every area has reputable attorneys who handle bankruptcies. Spend the time to find one and spend the time to know what you have to do and when. Mistakes, like missing filing dates, can cause things to get very bad very fast. Do you want it done right, or do you want it cheap?

Lease Buybacks - You need to know about this

Note: We DO NOT offer the Lease Buyback Option but we offer something similar with our options programs. Owner's can NOT stay in the home because if they could not afford it before how can they afford it now. Also in general we do NOT transfer title but in some cases or type of deals structured title transfer may be necessary and with FULL DISCLOSURE of the current owners, we try to only cloud the title. In general the title is transferred when loan is paid off. In the even title is transferred, the owner has the right to foreclosure if we default on the payments.  . 

When a person becomes late on their monthly house payment, eventually the lender will begin foreclosure proceedings which in most cases will start with a notice of default or a lis pendens recorded with the county where the property is located. There are data companies that collect this information, and sell the information on a subscription basis. That is why, shortly after the notice is recorded, the homeowner is usually deluged with mail, phone calls and people knocking on the door offering various forms of assistance and/or foreclosure prevention. The Stop Foreclosure page on this site covers bankruptcy and investor offers along with some sources for homeowner assistance. This page will just cover Foreclosure Bailout Loans and Lease/Buyback Arrangements that require transfer of the property into someone else's name. Bailout loans are included because there have recently been more and more offerings called a "loan" that in reality is a property transfer.

This page will describe a common method of Lease/Buyback, points where a consumer should pay close attention will be marked in bold.

The process begins with contact between the person offering the L/B and the distressed homeowner. The solution presented to the distressed homeowner is to transfer the property out of their name, the distressed homeowner stays in the home and leases the property for a year or more, then repurchases the property after the homeowner's credit has improved. The fee for accomplishing this is stated as free, or at a very nominal cost. We'll discuss the actual costs further down this page.

The property transfer

The property transfer will normally be accomplished by use of a quitclaim deed, which transfers any interest the homeowner may have in the property into a land trust. If the deed is recorded at the county recorder's office, it is not readily obvious to anyone searching the records that ownership has changed, it only indicates the property went into a trust. It is important to note that transferring title does not remove the owner's obligations under their loan. The homeowner still owes on the loan, but no longer owns the security for that loan, which is the home. If the homeowner, or the Lease/Buyback purchaser does not make up past due payments and continue making payments, the lender WILL continue the foreclosure.

The Lease

Leases can be written with different terms, but a distressed homeowner should note that if you are leasing, you DO NOT own the property. Any statements you make, or forms you sign indicating you are the homeowner will not be accurate or truthful. A common monthly rental amount under a lease/buyback arrangement will be 1% of the amount of the property transfer, for a lease period of 12 months. Property transfer of $100,000 will have 12 lease payments of $1,000 or $12,000 Property transfer of $200,000 will have 12 lease payments of $2,000 or $24,000 Property transfer of $300,000 will have 12 lease payments of $3,000 or $36,000 Lease payments for a personal residence are not tax-deductible and there is no pay down on loan principal, it is just money going to someone else for the use of the space. Remember a few paragraphs up where lease buyback programs are being promoted as being free? They're not. One of the terms that will be written into the lease will be a requirement that the lease payments be on time. If you aren't able to make your lease payments, you'll loose your option to repurchase the property and get evicted as well.

The Loan Discount

Lenders will sometimes allow a reduced payoff for a loan if it is obvious a foreclosure is inevitable and a third party purchaser is willing to buy the property at a price lower than the full payoff amount. What determines when a foreclosure is inevitable? Commonly, when loan payments aren't being made, and the borrower isn't communicating with the lender or the borrower is communicating, but does not have the economic means to make the payments. What is a third party purchaser? Someone who is not connected/related to the borrower who is willing to purchase the property at a price they consider attractive. Lenders generally will not consider a loan discount if title to the property has already been transferred.

The Buyback

The buyback price after the lease period is over can be anything the parties agree on. One company promotes that they will re-sell the property to the previous owner for 95% of the current market value. Most "damaged credit" lenders will only lend to about 75% of the current market value. So, how's the previous owner going to qualify for financing since their credit is heavily damaged? They do owner financing.They draft a new mortgage for 90% of the property's value, then they backdate it to the time the lease was originated. They then use the lease payments for verification that mortgage payments have been made on time. The backdated loan, along with it's questionable verifications, is then sold on the secondary market. If the previous owner can't come up with the difference between the 95% repurchase price and the 90% loan, they can also get a short term loan from the company.

The Bottom Line

If an owner chooses to use a program like this, they can expect it's going to cost them at least 12% of the original transfer price in rent, their credit is going to be damaged to a greater extent than when they began the process, and they'll be paying 95% of the property's current value on re-purchase. There are much more affordable programs available for foreclosure help that do not require the use of "smoke and mirrors" to conceal the process.

Real Estate and Foreclosure Definitions

Abstract of Title -	A summary of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements of record which may impair the title to real property.
Acceleration Clause -	A clause in trust deed or mortgage giving the lender the right to call all sums owing him to be immediately due and payable upon the happening of a certain stated event.
Acceptance -	A legal term referring to the acceptance of an offer. A buyer offers to buy and the seller accepts the offer.
Acknowledgment -	A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution is his act and deed.
Ad Valorem -	"According to value." A method of imposing a tax on the ownership of real property.
Adverse Possession -	The open and notorious possession and occupancy under an evident claim or right, in denial or opposition to the title of another claimant.
Affidavit -	A statement or declaration reduced to writing and sworn to or affirmed before some officer who has authority to administer an oath or affirmation.
Affirmation -	A solemn declaration made under the penalties of perjury by a person who conscientiously declines taking an oath. This is equivalent to an oath.
Agency -	The relationship between an agent and principal. One who represents another from whom he has derived authority.
Agreement of Sale -	A written contract between seller and buyer in which they reach a meeting of minds on the terms and conditions of the sale.
Amortization -	The liquidation of a financial obligation on an installment basis; also recovery, over a period, of cost or value.
Appraisal -	An estimate of value of property resulting from an analysis of facts about the property. An opinion of value.
Appurtenance -	Something belonging to the land and transferred with it, such as buildings, fixtures, rights
Assemblage -	Putting together two or more lots to form a large parcel.
Assessed Value -	A value placed upon property by the tax assessor.
Assessment -	The valuation of property for the purpose of levying a tax, or the amount of the tax levied.
Assessor -	One appointed to assess property for taxation.
Assignment -	A transfer or making over to another of the whole of any property, real or personal, or of any estate or right therein. To assign - to transfer or make over to another.
Assumption of Mortgage -	When a grantee takes a title to real property and the deed contains an assumption agreement, or grantee executes a separate assumption agreement, the grantee becomes the principal guarantor for unpaid portions of the note and is primarily liable for the amount of any deficiency judgment.
Attachment -	Seizure of property by court order, usually done to have it available in event a judgment is obtained in a pending suit.
Attorney-in-Fact -	One who is authorized to perform certain acts for another under a Power of Attorney; may be limited to a specific act or acts, or be general.
Balloon Payment -	Where the final installment payment on a note is greater than the preceding installment payments and it pays the note in full, such final installment is termed a balloon payment.
Beneficiary -	(1) One entitled to the benefit of a trust; (2) One who receives profit from an estate, the title of which is vested in a trustee; (3) The lender on the security of a note and deed of trust.
Blanket Encumbrance	A single mortgage or trust deed which covers more than one piece of real estate.
Bona Fide -	In good faith, without fraud or deceit; authentic; sincere.
Breach -	Violation of an obligation in a contract.
Capitalization -	In appraising it is a method of determining the value of property by interpreting the property's net income with a percentage which represents a reasonable return on invested capital.
Capitalization Rate -	The rate of interest which is considered a reasonable return on the investment. It is used in the process of determining value based upon net income.
Cash Flow -	Income generated by a property which is determined by subtracting vacancy allowances and collection costs, operating expenses and debt-servicing costs from the property's scheduled gross income.
Caveat Emptor -	"Let the buyer beware." The buyer must examine the goods or property and buy at his own risk.
Chain of Title -	A history of conveyances and encumbrances affecting the title from the time it passed from government ownership, or as far back as records are available.
Closing Statement -	The written statement provided by the escrow company to each of the parties to the loan transaction showing the amounts received and the amounts paid out for various items.
Cloud on Title -	Any conditions revealed by a title search which affect the title to property; usually relatively unimportant items but which cannot be removed without a quitclaim deed or court action.
Codes -	A systematic collection of laws in writing.
Collateral Security -	A separate obligation attached to another contract to guarantee performance of the contract.
Collusion -	An illegal agreement between two or more persons to defraud another of his rights by the forms of law, or to obtain an object forbidden by law.
Color of Title -	That which appears to be good title but which is not title in fact
Commingling -	The broker's unauthorized and improper mixing of office funds, which are personal or business monies, with trust funds, which are client customer monies.
Commission -	A payment for the performance of specific duties in real estate; a percentage of the selling price of property, percentage of rentals, etc.
Compound Interest -	Interest paid on the original principal and on interest accrued from time it became due.
Condemnation -	The act of taking private property for public use by the sovereign powers; a declaration that a structure is unfit for use.
Conventional Loan -	A loan that's neither guaranteed nor insured by Federal Housing Administration (FHA) or Veterans' Administration (VA).
Conveyance -	The transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.
Convenants -	Agreements written into deeds and other instruments promising performance or non-performance of certain acts or stipulating certain uses or non-uses of the property.