Each state has their own process regarding foreclosures. It is important that you have a basic working knowledge of the foreclosure process and the laws of the state you are considering investing in. This can avoid loss of money, fees and fines at a later date.
There are two basic types of foreclosures with the processes varying between states. There are judicial and non-judicial foreclosures. A judicial foreclosure involves the court and can be quite a lengthy process. When a person defaults on a loan the lender must file a complaint with the country circuit court. The lender must also file a notice of Lis Pendens in the county where the property is located. Once the complaint and notice are filed the defendants or the home owners are then notified of the complaint. Once the home owners are served the lender then will seek a judgment. The entire amount of the remaining mortgage will be due and a date set for the sale of the house. The amount of time will vary by individual case and the state.
Once the legal time period has passes the house can then be put up for public auction. This can be performed by a county clerk or sheriff. It is very important that you are familiar with the judicial process of foreclosures if this is how they are handled in your state. You can find out all of the relevant information via the state statues on foreclosures.
A non judicial foreclosure process does not involve the courts. They are usually conducted in state where a deed of trust is issued. Once the owner defaults on the loan they are sent a notice. There is a statutory period within which one must wait, which again will vary according to state. Once that period has passed then the property can be put up for public auction. This process can be quicker than the judicial foreclosure route but it is still vital that you are familiar with all of the steps and processes.
Having a basic working knowledge of the foreclosure process and foreclosure laws of your state can save a lot of hassle and heartache in the future. All of the information will be listed in the state statutes which are a matter of public record. If reading legal statutes is not something you excel at then a real estate lawyer may be a worthy investment. It is essential that you know the processes and your property deal done legally, otherwise significant loss of money and reputation are possible.