Foreclosures

In most states, the first step in non judicial foreclosure is the lender's filing of a Notice of Deficiency with the court of the county in which the property is located. A copy of the Notice of Deficiency is mailed to the homeowner's last known address, putting the homeowner on notice that he or she has a certain amount of time to correct the deficiency by bringing the loan current. This time period varies by state, but three months is somewhat typical.

If the deficiency is not corrected within the time period specified in the Notice of Deficiency, a date will be set for the sale of the property. Notice of the pending sale and its date is posted at the county courthouse and also on the property. In some states, the notice of sale must also appear in local newspapers a certain number of times-once weekly for three consecutive weeks, for example.

During all of these proceedings, the homeowner has the right to reinstate the mortgage by bringing the loan current; this right usually expires five days before the sale date. If the mortgage is not reinstated, on the date of sale the property will be auctioned on the steps of the county courthouse to the highest bidder with enough cash to complete the purchase. The winning bidder will receive the deed to the property and will immediately assume ownership. If there is no successful bidder, ownership of the property reverts to the foreclosing mortgage holder.

U.S. Department of Housing and Urban Development does offer some help, especially if you feel you have been misled. Though it is primarily concerned with the front end of the mortgage loan process-fair disclosure in lending and settlement of a new loan-the Real Estate Settlement Procedures Act (RESPA) affords significant protections to consumers that can also have implications for the foreclosure process, especially in cases where the lender has cut corners or been less than forthcoming in soliciting or closing the loan. If you have any reason to believe that your mortgage lender failed to disclose certain charges or fees related to your home loan, or unfairly required you to purchase certain services or products as a condition of granting your loan, you may be entitled to damages under the provisions of RESPA.

If you suspect you have been misled by your lender the first step is to write a Qualified Written Request this is a letter that requires your lender to respond to you, an accounting of your loan details and activity. Sample Qualified Written Request.

You can also call HUD toll-free at 800-669-9777.

The Federal Trade Commission (FTC) has more information on avoiding scams and what you can legitimately do to delay foreclosure.

"Mortgage Payments Sending You Reeling? Here's What to Do," Log onto their web site at www.ftc.gov and type "mortgage reeling" into the search box
"Foreclosure Rescue Scams: Another Potential Stress for Homeowners in Distress," Log onto their web site at www.ftc.gov and type "foreclosure scam" into the search box
A site with nationwide foreclosure listings Foreclosure Listing
For more information and resources for avoiding foreclosure in your state, go to the U.S. Department of Housing and Urban Development