"How To Make Money With Foreclosures"

There are two different foreclosure processes that take place in the United States. One is the Judicial and the other is the Power of Sale, also known as the Non-Judicial.

Non-Judicial State. This means that when someone goes into default, they have not made their payments for 90 days, the lender has the right to begin the foreclosure process without going to a court and seeking permission to foreclose the property. All they have to do is record something on the title that says they are now the trustees and they are going to sell the property.

On non-judicial states, there is a clause in the promissory note that states if a person doesn’t make payments, foreclosure can begin without seeking a judge’s permission. With this kind of process, there are no lawsuits involved. The homeowner will receive a letter and have 20 days to contest the debt, but the foreclosure process starts immediately. Once a person receives that letter, they have 30 days before their house is sold on the courthouse steps. It’s a very fast process.

Judicial State. This process requires the lender to hire an attorney who has to file a lawsuit in court requesting permission to foreclose. Anybody who has an interest in the property will be served a copy of that lawsuit.

•       The property owner

•       Anyone else on the promissory note

•       Tenants if it is a rental property

•       Any entity with a lien against your property

Once the property owner has been served, he has 20 days to file an answer , a response to the lawsuit giving their side of the story. The judge evaluates the response and decides whether to allow the property owner more time or whether to go ahead with the lawsuit. If you do not respond by not filing an answer or if the judge believes your answer is not compelling enough, then the judge will set a date in which the lender can foreclose on the property and follow on the courthouse steps. This process usually takes about 120 days.

Most states will use both foreclosure processes. You can easily find out whether a state is judicial or non-judicial. You can call the County Courthouse or call real estate attorneys who specialize in foreclosures and they will tell you what the process is.

To Your Success,