Should I Short Sell My Home???

SHOULD I SHORT SALE MY HOME? A HOMEOWNER’S GUIDE :

HOW TO SURVIVE THE WORST REAL ESTATE MARKET IN HISTORY By David E. Dion The Valley Solutions Team Solutions Real Estate With the Assistance of Tim and Julie Harris

*This book and its content are not intended to give legal or accounting advice. Readers of this book are advised to seek additional information from their accountant and or attorney. The authors and co-authors are not accountants or attorneys.

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Introduction I would like to take a moment and introduce myself and my team to you, as well as tell you a little bit about this book and the reason we put it together.

First of all, my name is David Dion and I have been practicing (not actually practicing, but doing) real estate in Arizona for over 7 years. I am originally from Massachusetts and have lived in Arizona since May 2000. I decided to get into real estate before “the bubble�. I was working in an electrical engineering role at a major valley company and decided I wanted to do something new and challenging. Little did I know the challenges that were on their way.

I take customer service quite seriously, especially when it comes to real estate. It is ironic that my chosen profession is now real estate because I thought real estate agents were all over paid and under worked. To prove this, I personally did two For Sale by Owners myself long before getting my real estate license.

Every year I have been in the business has been successful. I started at a major national real estate brokerage and stayed for two years. I was working quite hard and enjoyed every moment of it. My family will tell you they enjoyed none of it. I was away a lot, but never had I been presented with an opportunity such as this before. Do a great job for people and make a great living. The only problem is it was taking me 90 hours per week!!!

I then moved to another major national real estate brokerage and started The Valley Solutions Team. This was over 4 years ago and many members of my original team are still working directly with me, as well as some agents from the first company I joined.

One thing led to another and we decided it was best for us if we started our own company. Solutions Real Estate was founded in Arizona on July 10, 2009 and has been growing ever since.

That’s a brief history of my real estate career. Know that we could have accomplished none of this unless we had a strong desire to help people.

And helping people is what we do.

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The Valley Solutions Team at Solutions Real Estate www.ShortSalesAreHere.com

Short sales are one of those things that I wish we did not know how to do. If there were no foreclosures and short sales, and if this market would have behaved normally, we would have no need for this book.

Well, that is not what happened and I feel it is our duty as real estate professionals to know all there is to know about the current situation, share what we know with as many people as possible, and ultimately help as many people as we can.

The Valley Solutions Team is well staffed to help lots of people with their real estate needs, not just short sales. We have agents who work just with buyers, we have a full staff of administrative support as well as a team of agents trained in short sales.

Please visit one of our team websites at www.ValleySolutionsTeam.com .

Or Visit our special short sale site at www.ShortSalesAreHere.com (short for Short Sales Are Here for a While).

Or Our company, Solutions Real Estate has over 1000 websites covering most major communities in the valley. Get a sample of some of them by visiting www.SolutionsRealEstate.com.

Or Contact us directly as info@valleysolutionsteam.com or by calling Dave at 480-332-5942.

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Table of Contents Chapter One A National Epidemic Is Looming. Are You Ready?

Chapter Two What is a Distressed Property?

Chapter Three We Are Here to Help Chapter Four How Bad Is It? Chapter Five Ok, I Get It. A Short Sale May Be My Best Option. Tell Me More.

Chapter Six What Is A Mortgage Foreclosure?

Chapter Seven You Have Been Warned: Foreclosure Scams.

Chapter Eight What Are The Options For Homeowners In Foreclosure?

Chapter Nine You Now Want To Short Sale Your Home: Top 10 Short Sale Questions, Answered.

Chapter Ten I Thought Rates Were Falling. Won’t That Help?

Chapter Eleven Life After Short Sale..When You Want To Buy A Home Again…FHA To The Rescue.

Chapter Twelve Something You Should Know: The Death Of The Home Equity Loan Millions Of Homeowners Shut Out. 4|

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Chapter One A National Epidemic Is Here. Are You Ready?

Are you stressed out about mortgage payments? Do you think your only option is a foreclosure? Is a short sale right for you? Millions and millions of homeowners are asking themselves the same questions. It is projected that over 20,000,000 homeowners will have negative equity in their homes in the very near future. In other words, they will owe more on their homes than they are worth. Over the next 5 years, it is estimated over 8.1 million homes may be foreclosed upon. Expect the effects of the estate recession to ripple for years to come.

What can you do now?

There is expected to be massive tsunami of homeowners who are simply making the decision to sell their homes through a short sale vs. staying in a home, hoping that one day it may be worth what they paid.

No one is safe. News stories from across the country tell the tales of both celebrities and average Americans who are all considering selling their homes through a short sale.

Selling your home through a short sale doesn’t need to be a shameful, life-ruining experience. Sometimes short selling your mortgage simply makes smart economic sense, especially for homeowners who find themselves "upside down" — that is, they owe more on their mortgage than their house is worth.

Late last year, CNBC Financial Guru Jim Cramer was telling homeowners to ‘Just Walk Away’. (Watch the video on YouTube.com.)

We are clearly in uncharted waters. The current housing crisis is different from all the previous housing recessions. It is well known that many financial institutions sold mortgages in a deceptive manner — for example, by approving people for loans they couldn't really afford — then why should homeowners feel obliged to honor their commitments?

From a homeowner’s perspective, why should they stay in a home that is depreciating?

Often times it’s possible to rent the same style home in the same area for half (or less) than their current mortgage payment. Assuming it takes years for the market to recover, the homeowner who sells their home via a short sale now will be far ahead of the person who ‘stuck it out’.

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Here is an example: Starting May of 2008: * Homeowner paid $500,000 at the market peak in late 2006. Homeowner put down 5% and did a 7 year interest only mortgage. Monthly payment including principle, interest, taxes and insurance is $4200 per month. * Assuming the property has depreciated 30% and is now worth only $350,000, the owner has negative equity or is ‘upside down’ by $150,000. * The market is continuing to depreciate and is projected to level off in mid to late 2009.

In other words, months and months of more losses for the homeowner.

Option 1 Homeowner can ‘stick it out’ and keep the home. They will continue to make their monthly interest only payment/ house upkeep of $4200 per month. They will pay $50,400 per year to keep the home. They are deeply ‘upside down’ in the home with massive negative equity. By late 2009, the home’s value has stopped depreciating. The market stays flat for at least a year thereafter. The inventory levels have to sell off. In late 2010 or early 2011 the market then starts to slowly appreciate again. Best case the home starts to appreciate at 5% per year. Based on this rough example it will take at least 7 years for that home to be worth what that owner paid in 2006. During that time the homeowner will have paid $50,400 per year. Do the math. That’s $352,800 spent to stay in the home and ‘stick it out’.

Option 2 Homeowner lists the home with an agent trained in doing short sales. The home sells and the bank agrees to accept the loss in equity as the short sale. Bank loses $150,000. Homeowner moves to a rental home in the same neighborhood and pays rent of $2000 per month. Half of his previous house payment. Homeowner saves the difference between what he had been paying for the owned home and his new rent payment. $26,400 per year. Yes, the homeowner does have significant negative credit ramifications as a result of their short sale. This negative credit will prevent them from buying a home for the next 18-24 months. With this option he can sit out the real estate recession and jump back in when the market has hit bottom. If he times it right he can buy at the markets bottom. This time he will have a more significant down payment and a better quality mortgage.

Let’s be very clear about this next point…Yes, there is damage to your credit.

According to national experts, after a short sale, a person’s credit will go down by 300 + or - points and then prevent them from buying using a government backed mortgage for up to 24 months. With a foreclosure, the credit is damaged for up to 7 years preventing someone from obtaining a government-backed mortgage.

Many home owners who are now short selling their properties are going to want to buy houses again someday; and when they do, lenders are going to want to make money lending them money to do so.

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The Valley Solutions Team at Solutions Real Estate www.ShortSalesAreHere.com

Chapter Two What is a Distressed Property and What Causes a Homeowner to be Distressed?

A distressed property can be a property falling into one of the four following categories: • • • •

Property that is in poor physical condition Property owned by a person who is experiencing a time of financial instability or insecurity Property that is currently in or will soon be in some stage of foreclosure or preforeclosure Property on which the mortgages total an amount higher than the actual current value and the owner must sell

What has caused a home to fall into one of these categories: • • • • • •

Values of homes have fallen dramatically Home sales continued to slow to their lowest rates in 22 years Many loans will reset at higher interest rates causing millions of homeowners to have their payments increase, sometimes doubling The availability of new money to purchase homes has decreased dramatically with the elimination of sub-prime loans Many homeowners had planned on refinancing their home, only to find out they have no equity because of decreased values Many sellers now must compete with short sales, REO’s and lender owned properties

What can cause a Homeowner to be Distressed?

• • • • • • • • • • • • • • • 7|

Payment increase or mortgage adjustment Loss of employment Business failure Damage to property Death of a spouse Death of a family member Severe illness Inheritance – unable to pay new obligations Divorce Separation Relocation Military Service Insurance – Tax – HOA increase Reduced Income Too much debt The Valley Solutions Team at Solutions Real Estate www.ShortSalesAreHere.com

• • •

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Property value decline Incarceration Stress of Financial Hardship

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Chapter 3 We Are Here to Help We never lose sight of the fact that many homeowners are facing the most difficult financial challenge in their lives. We realize we are all in this together. The number of real estate agents I know personally who have recently faced short sale and foreclosure is huge.

Our experience puts us in the position to help you through this difficult time. We will share with you all of your options and help you make the best decisions for you and your family.

We have an experienced team that has worked together for over 7 years. We have been together long before the boom and will be together long after the bust.

The most important thing we can do upfront is help you set the correct expectations.

First of all, there is nothing short about a short sale. The timelines we will be working by are like no buying or selling experience you have had in the past. The truth is the lenders have too many files to process and they have loads of investors they must answer too. If they make a mistake, they run the risk of getting sued by the people they got their money from.

Then we help you explore all of your options. Some common options to consider and pursue: • • • • • • • • •

Loan modification Rent the property Deed in lieu of foreclosure Bankruptcy Refinance Service Members Civil Relief Act Sell the property Short sale Foreclosure

What is a Short Sale?

A homeowner is “short” when a borrower owes an amount on his property, that when combined with closing costs and commission is higher than the current market value.

A short sale occurs when a negotiation is entered into with the mortgage companies to accept less than the full amount owed at close of escrow.

A short sale is a very involved process and will take time, patience, experience, good communication and organizational skills and professionalism.

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What Does it Cost to Short Sale a Home?

Typically, a short sale should result in minimal cost to you the owner, if anything at all.

Most of the costs will be absorbed by the bank (real estate commissions, closing costs, etc.).

However, we do suggest that you keep the property in ’showing condition’ with the utilities on, landscape tidy, and everything in working order. If at all possible, we suggest you keep making payments to your Homeowner Association. They have the authority to place a lien on the property. In addition, please continue to follow all regulations and CCR’s. We want to make sure the property passes any HOA inspection needed to close on the property.

Qualifications for a Short Sale While the misconceptions of what qualifies a seller for a short sale are many, the reality is actually very simple. Following is an explanation of the three major items that most lenders are looking for to see if you will qualify. Of course, there are always exceptions and if you feel you won’t qualify according to these factors, please give us a call. We might still be able to help!

1. FINANCIAL HARDSHIP First and foremost a lender will want to see that you have a ‘financial hardship’. A financial hardship is a verifiable issue that has or will cause you to miss payments or have financial difficulties Financial hardships can be issues such as: • Mortgage Payment Adjustment • Job Loss • Too Much Debt • Business Failure • Owe too much on the property than what it can be sold for A simple definition for ‘financial hardship’ is: •

A material change in-between the day the mortgage was signed and today that has affected your ability to pay.

2. MONTHLY SHORTFALL Almost every lender will want to see that you cannot afford to pay your current mortgage. The way that this is demonstrated is on a financial worksheet that your agent will provide. This is essentially a monthly profit and loss statement. While this may sound difficult in reality determining whether you have monthly shortfall or not is actually relatively easy.

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The Shortfall equation is: •

Total Monthly Income – Total Monthly Expense = Monthly Shortfall

If you do not have a monthly shortfall but will have one soon due to a payment increase or pending layoff, etc. then you may still qualify for a short sale as long as this issue is verifiable.

3. INSOLVENCY In order to qualify for a short sale, you must not have the means to pay down your mortgage. This means that the mortgage company wants to see that you owe more than you have in cash (known as being insolvent). You do not however have to be completely broke ― this is a common misconception, the lender will want to see that over time you will not be able to pay your mortgage obligation. Having money in the bank for living expenses is common and will not disqualify you.

What is Needed – The PaperworkABOUTFOREESOURCE BOOK In order to have the opportunity to negotiate with your lender, we will need to have the following documentation. Please note, when we get a contract we may need updates on each item so please make certain you set aside statements and paycheck stubs as you get them.

• • • • • • • • •

Two months most recent mortgage statements (all mortgages) Two months checking account statements (all borrowers if separate) Two months savings account statements (all borrowers if separate) Two months other account statements (all borrowers if separate) Last two paycheck stubs (all borrowers) Two years tax returns Hardship Letter Financial Worksheet Authorization to Release Information

It is best to have all paperwork in order. Once you receive an offer on your property, we can immediately submit the entire, complete package to the lender.

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Chapter Four How Bad Is It? One thing is certain: Foreclosures are on the rise. Cities in California, Arizona, Ohio, Florida and Michigan just posted the highest foreclosure rates in the U.S., according to RealtyTrac, a private firm.

RealtyTrac is the go-to source for the best foreclosure information. This information is from a recent report that they released. If you want to obtain current, up to the minute information on foreclosures in your area go to their website. www.RealtyTrac.com Foreclosure Activity Up 112 Percent From Q1 2007 California and Florida and Arizona Cities Accounts for 17 of Top 20 Metro Areas “RealtyTrac, the leading online marketplace for foreclosure properties, released its Q1 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 649,917 properties during the first quarter, a 23 percent increase from the previous quarter and a 112 percent increase from the first quarter of 2007. The report also shows that one in every 194 U.S. households received a foreclosure filing during the first quarter.

Foreclosure activity in the first quarter increased on a year-over-year basis in 46 out of the 50 states and in 90 of the nation’s 100 largest metro areas, demonstrating that most regions of the country are seeing more foreclosures.”

Nevada, California, Arizona have the highest state foreclosure rates. One in every 54 Nevada households received a foreclosure filing during the first quarter, the highest foreclosure rate among the states and 3.6 times the national average. Foreclosure filings were reported on 19,595 Nevada properties during the quarter, up 3 percent from the previous quarter and up 137 percent from the first quarter of 2007.

Foreclosure filings were reported on 169,831 California properties during the first quarter, the highest total among the states and a rate of one in every 78 households — the nation’s second highest foreclosure rate. Foreclosure activity in California increased 32 percent from the previous quarter and was up nearly 213 percent from the first quarter of 2007.

Arizona documented the nation’s third highest state foreclosure rate, with one in every 95 households receiving a foreclosure filing during the quarter. Foreclosure filings were reported on 27,404 Arizona properties during the quarter, up 45 percent from the previous quarter and up nearly 245 percent from the first quarter of 2007.

Foreclosure filings were reported on 87,893 Florida properties during the first quarter, the second highest state total and giving Florida the nation’s fourth highest foreclosure rate — one in every 97 households received a foreclosure filing during the quarter.

Foreclosure activity in the state was up 17 percent from the previous quarter and up 178 12 |

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percent from the first quarter of 2007.

Colorado foreclosure activity increased 33 percent from the previous quarter and 78 percent from the first quarter of 2007, and the state’s foreclosure rate ranked No. 5 among the states. Foreclosure filings were reported on 18,996 Colorado properties during the quarter, a rate of one in every 110 households.

Other states with foreclosure rates among the top 10 were Georgia, Michigan, Ohio, Massachusetts and Connecticut.

The Q1 2008 U.S. Foreclosure Market Report also ranks the nation’s 100 largest metropolitan areas by foreclosure rate. California and Florida metro areas accounted for 13 of the top 20 metro foreclosure rates, with the California cities of Stockton and Riverside-San Bernardino taking the No. 1 and No. 2 spots.

One in every 30 Stockton households received a foreclosure filing during the quarter — 6.6 times the national average — and one in every 38 Riverside-San Bernardino households received a foreclosure filing during the quarter — more than five times the national average. Other California metro areas in the top 20 included Bakersfield at No. 4, Sacramento at No. 5, San Diego at No. 9, Oakland at No. 10, Fresno at No. 12, Los Angeles at No. 17 and Orange County at No. 19.

Las Vegas documented the third highest metro foreclosure rate, with one in every 44 households receiving a foreclosure filing during the quarter. The metro area’s foreclosure activity increased 1 percent from the previous quarter and 134 percent from the first quarter of 2007.

Detroit foreclosure activity in the first quarter decreased 22 percent from the previous quarter and was down almost 4 percent from the first quarter of 2007, but the metro area’s foreclosure rate still ranked No. 6, with one in every 68 households receiving a foreclosure filing during the quarter. Phoenix foreclosure activity increased 46 percent from the previous quarter and 294 percent from the first quarter of 2007, and the metro area’s foreclosure rate ranked No. 7, with one in every 70 households receiving a foreclosure filing during the quarter.

The highest ranked Florida metro area was Fort Lauderdale, which ranked No. 8 with one in every 73 households receiving a foreclosure filing during the quarter. Other Florida metro areas in the top 20 included Orlando at No. 13, Miami at No. 14 and Sarasota-Bradenton-Venice at No. 15. The foreclosure rate in Tampa-St. PetersburgClearwater ranked No. 21.

Other metro areas with foreclosure rates among the top 20 included Denver at No. 11, Atlanta at No. 16, Cleveland at No. 18 and Memphis, Tenn., at No. 20.

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Chapter Five

OK, I Get It…A Short Sale May Be My Best Option…Tell Me More…

A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $500,000. The market value of the home is $350,000. Long story short, the lender accepts the offer for $350,000 and the home is sold.

Simply stated, the reason someone short sells a home is to avoid foreclosure.

Why are lenders so eager to take such a huge discount? Banks do not like bad loans.

If they see an opportunity where they can sell the property without the huge loss of a foreclosure, they will do it. Some lenders report that if the home goes into foreclosure by the time the home actually closes with the new buyer, the lender will be lucky to net 50% of the original loan balance.

Bottom line from the lenders perspective? They are in the business of lending money, not owning homes. If they can accept a short sale offer and rid themselves of the bad loan AND net more, vs. the home going into foreclosure, they will do it every time. It’s simply smart business.

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Chapter Six What is Mortgage Foreclosure? ***Please reference the back part of the book, Appendix C, for state specific foreclosure laws Mortgage foreclosure simply means the deed can only be foreclosed through court action. Mortgage foreclosure is usually referred to as a judicial foreclosure.

A mortgage is a security document that allows the borrower to keep title of the property while using the property as security or collateral for a loan. The lender then places a lien on the property in the event the owner does not pay the agreed payment. When the borrower pays off the loan, the lender gives the borrower a satisfaction of mortgage that removes the lien from the property. About half the states in the U.S. use mortgage foreclosure as the means of satisfying the loan balance.

As with most mortgage foreclosure lawsuits, it starts with a summons and a complaint is issued to the borrower and any other parties with inferior rights in the property. Usually the lender’s attorney is the one who issues the notice. The complaint is usually filed in the court where the trial is to be held. Here’s the interesting part. Once the borrower has been notified, he or she has 20 days to respond back to the court challenging them on the mortgage foreclosure lawsuit. Once this occurs, the court now has 40 days to respond back to the borrower. Keep in mind that each correspondence must be legit and deal with some specific part of the complaint. This process may go back and forth as long as the borrower finds something erroneous with the complaint. This slows a mortgage foreclosure greatly because it must go through the court system. It may go as long as a year if needs be or even longer. This is how many homeowners stay in their homes for months often years after they have stopped making their house payments.

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Chapter Seven You Have Been Warned: Foreclosure Scams on the Rise!

Foreclosure Scams are on the rise because of the increasing number of foreclosures.

It's very important as homeowners to know about these scams...

Common Foreclosure Scams 1. EQUITY SKIMMING: You are approached by a "buyer" that offers to buy your home at full asking price. The potential buyer claims he will solve all your financial problems by "promising" to pay off your mortgage. He claims to take over the existing mortgage and give you a sum of money after the property is sold. But in order to do so, he suggests that you move out right away and deed the property over to him. So you move out and assume the "buyer" will continue to make the mortgage payments. However, the "buyer" collects rent for the next 6 - 8 months and does not make any mortgage payments. The lender has no choice but to foreclose and all the while you have no idea what's happening because you've moved out.

2. THE BAIT-AND-SWITCH: Very similar to taking over "subject to", but the acclaimed buyer is only after the equity.

The buyer tells the homeowners he will bring the mortgage current and tells them they can stay in the home. But in order to do so, he must have a few documents signed that protect his interest and gives him ownership of the property. Then a few weeks down the road, the homeowner receives an eviction notice.

3. THE BAILOUT: Again very similar to the previous two, where the homeowners sign over the deed with the assumption that they will be able to remain in the house as a renter or lease it back from the buyer and eventually buy it back over time. The terms of these types of scams are so harsh that they make it nearly impossible to buy-back which was the plan to begin with. The homeowner is left with nothing and the buyer walks off with most or all of the equity.

4. PHANTOM ASSISTANCE: Typically these are online companies claiming to have the magic touch in stopping the foreclosure auction. They know all the ins and outs and what to say to the lender to stop the auction. Then these companies charge outrageous fees for simple phone calls and paperwork the homeowner could have completed themselves.

5. COUNSELING AGENCIES: Some groups, most of them online, calling themselves "counseling agencies" may approach you or ask you to submit your information for a personal consultation to review your situation. They then proceed to offer certain services for a fee. Most of the 16 |

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time these "special services" you are paying for are FREE, such as negotiating a new payment plan with your lender, working out a forbearance, or lowering your interest rate.

These are all things your lender will assist you with at no charge. Be careful giving ANYONE money online that claims they can assist you out of foreclosure. There are dozens of good, non-profit organizations and free counseling agencies that are ready and willing to assist.

6. SHORT SALE COMPANIES: This is the newest breed of companies to avoid. Here is the bottom line; they make all their money from the fees you pay them at the start of the process. In other words, they have little to no incentive to get your short sale actually accepted and closed.

NOT A SCAM: One of the largest foreclosure assistance programs right now is 888995-HOPE. This is available to any homeowner in America having trouble paying their mortgage. It is provided free of charge by the Homeownership Preservation Foundation, a nonprofit dedicated to preserving homeownership.

Here are a few things you can do to avoid foreclosure scams... * DON'T SIGN any papers that you don't fully understand, or you could make bad matters worse. * DON'T SIGN any papers that you feel pressured into signing. Take your time. * DON'T MAKE mortgage payments to anyone other than your lender. * DON'T SIGN over the deed without some closure or agreement for your protection. Talk to your attorney or title company if you need help. * DON'T EVER pay anyone who claims to stop foreclosure. You can stop the auction yourself.

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Chapter Eight What are the Options For Homeowners Facing Foreclosure?

1. Contact your lender immediately and talk to them about a loan modification. This is the first thing every home owned should do. The lender does not want your home, they do not want you to lose your home either. They may be willing to drop the interest rates, adjust the payments and in some cases, very rare, adjust the balance owed.

2. Try to “make nice� with your lender. You can call your lender and ask them to reinstate the loan. You may be allowed to reinstate or make the loan current by paying a lump sum or making scheduled payments to your lender over a given amount of time. Just explain to them you had a few bad months and things are now better and most lenders will try to work something out with you.

3. IF you have equity, refinance. Usually the lender would refinance the existing loan and include as part of the new loan any late payments, and fees that you would need to regain control. It would all be "wrapped" into one mortgage.

4. Assuming you have no equity and have to sell, you can list your home with a Realtor who has been trained how to do short sales. Almost always your best option.

5. You can give the property back to the lender. If there are no other liens on the title, the lender may agree to take the property back. This process of transferring ownership from you to the lender under these circumstances is called a Deed in Lieu of Foreclosure, and is sometimes referred to as a "friendly foreclosure" because in essence that what it is. You just walk away. You must discuss this with your lender.

6. You can file bankruptcy. First, you need to seek the advice of an attorney. In no way are we trying to provide legal advice. Only an attorney can give legal advice.

The two most common "chapters" of bankruptcy are Chapter 7 and Chapter 13.

Bankruptcies are "work out" others are "wipe out". Chapter 7 is the "wipe out" and Chapter 13 is the "work out". Bankruptcy is a federal court action designed to help individuals repay their debts or eliminate their debts depending on their circumstances. Chapter 13 bankruptcies are designed to reorganize debts in an effort to repay all debt. Chapter 7 bankruptcies are geared more towards liquidation of assets. Both Chapter 7 and Chapter 13 immediately stop the foreclosure process and any creditors from taking further action against you.

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Chapter 7 Bankruptcy When someone files a Chapter 7 bankruptcy, all assets are frozen. The attorney creates what is called an automatic stay. Meaning everything "Stays" put. The homeowners can't buy anything, they can't sell anything, and they can't even give away anything. If they try to sell their home, they couldn't. If they try to give away money in savings, they can't. Any unsecured debt like credit cards, unsecured loans, etc. are eliminated or wiped out. They do not exist anymore. Then the trustee or attorney who represents the court and the creditors will look at all the assets (house, car, furniture, equipment) anything of value and decide what must be liquidated to pay some of the debt that was wiped out.

If the homeowners are in the middle of foreclosure, a Chapter 7 will stop the foreclosure process. Usually banks will then ask the trustee to release the property from the automatic stay so they may continue with the foreclosure process. Once the property has been released from the bankruptcy, the foreclosure process starts right where it left off. Typically you have anywhere from 3-5 weeks until the foreclosure process begins again.

Chapter 13 Bankruptcy When someone files a Chapter 13, they don't take all the assets and sell them. Instead they take all the monthly payments and discount them for pennies on the dollar. It's like a debt consolidation plan. Whatever amount is agreed upon has to be paid to the bankruptcy court every month for the next 3-5 years. So the homeowners get to keep their house, their cars, and all their assets. Now, as long as the homeowner stays current with the mortgage payments and pays the amount agreed upon, they will be fine. However, if any payments are missed, the trustee will dismiss the bankruptcy and the foreclosure process will begin.

7. And finally, you can just let it go to foreclosure. Basically you don't do anything.

You leave with nothing in hand and a foreclosure on your creditreport. This is without question the worst option of all.

Another solution available is the Soldier Relief Act of 1940. When a property is owned by a person in the military and the mortgage payments are not made, then this relief act may stop foreclosure based on certain criteria. The person has to be in active duty in order to qualify. The mortgage loan had to be established before the soldier was called out to active duty. Not only will this stop foreclosure, but it will stop seizure of any personal property while the soldier is actively serving and several months thereafter.

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Chapter Nine You Now Want To Do A Short Sale. Top 10 Seller Short Sale Questions, Answered.

Number 10 I can’t make my house payments but I do have an ability to pay back all or part of the negative equity. Also, I want to preserve my credit score…is a short sale right for me?

Probably not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder) it makes sense for them to work out a repayment plan.

The lender will then release the lien and allow the home to close.

Number 9 If I pay mortgage insurance and default on my loan, wouldn't that cover the deficiency amount?

The mortgage insurance is not there for your protection, it protects the mortgage lender.

Number 8 Do I have to have my home ‘Approved’ by my lender prior to offering it for sale as a short sale?

No. Technically speaking, there is no such thing as being ‘Short Sale Approved’. The actual approval only happens with an accepted offer. *This may be changing with some lenders offering pre-approved short sales when marketing the property.

Number 7 I just missed a payment and I know I will miss more….how long does the foreclosure process take and is there time to do a short sale?

The foreclosure process takes differing times depending on your state. In the Midwest a foreclosure can take over a year. In California it’s taking 6+ months. Generally speaking a well-priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days.

In Arizona, the Notice of Default (NOD) may be filed approximately 90 days after the first missed payment. The actual foreclosure itself may take place approximately 90 days after that. The entire process typically take 7 months or longer.

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Number 6 Will I still have to pay property taxes if I do a short sale?

Property taxes will always have to be paid as part of any accepted short sale. Whether it’s you or the lender depends on their policies and the specific agreement you reach while negotiating the short sale.

Number 5 I owe more than my home is worth and I can’t make the payment, do I have to somehow qualify for a short sale?

The simple answer is NO. If someone can’t make their payment and they are otherwise insolvent they qualify for a short sale. Note: insolvent simply means their total debts are great than their assets.

Number 4 Do I have to pay income taxes? I have heard that I will get a 1099. Will the loss the bank takes be treated as a taxable gain to me...the seller...is this true?!

It WAS true, now it’s not. Consult your Tax Attorney or Qualified CPA. Recently the tax law was modified and now most people who do a short sale will have no taxes due.

This law can change. Consult your Tax Attorney or Qualified CPA. Number 3 How do you, my listing agent get paid? Who pays your commission?

The bank will pay the commission along with all the other usual closing costs.

Number 2 Do I have to miss a payment to do a Short Sale?

No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.

Number 1 I want to do a short sale and have a 2nd mortgage, does this make me ineligible?

No. Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender. Most short sales do involve 1st and 2nd lien holder.

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Chapter Ten But, I Thought Rates Were Falling. Won’t That Help Me? The Federal Reserve has been lowering rates to bail out the economy. Does this mean that those mortgage rates will fall?

In some cases yes in most cases no…read on.

Let’s start with the 30-year fixed rate mortgage. The 30-year fixed rate mortgage is not tied to short-term treasuries. Fixed mortgage rates are tied to long-term bond yields that move based on the outlook for the economy and inflation. True, even as the Fed has lowered rates, the 30-year fixed has come down, but that’s because of the outlook for slower economic growth in the months ahead. While the decline in treasury yields has helped push mortgage rates lower, the decline in long term rates hasn't been in lockstep thanks to the fact that these mortgages are securitized and sold on the global market. Investors now demand a higher risk premium on these mortgages due to higher delinquencies and foreclosures.

Next let’s take a look at 7 and 5-1 Adjustable Rate Mortgages (ARMs) Yes, this is good news if your 5-year (or 7 year) ARM is pegged to a treasury index. So if you’re facing a reset on, say, a $200,000 loan, you’re now getting a payment increase of about $150 a month, as opposed to $370 a month, which you would have had before the Fed started cutting rates.

Do the Fed Rate Drops Help Sub-Prime mortgage Holders?

Nope. Unfortunately if you have a sub-prime ARM it is more than likely pegged to LIBOR, which has moved in the opposite direction. Because of the liquidity issues in global financial markets, LIBOR rates have actually increased at the same time that treasury and other benchmark yields have been declining, so the Fed lowering rates today would not help too many sub-prime mortgage holders.

Even with lower rates, the home still must appraise for the amount being borrowed plus another 10 to 20%. In most places, depreciation alone has eliminated the opportunity to refinance and take advantage of rate adjustments.

How are Home Equity Lines of Credit Affected?

How about my Home Equity Line of Credit (HELOC): Yes, if you have that home equity line of credit that you used to renovate your bathroom/kitchen recently, then when the Fed lowers rates, your rate comes down as well. That’s because HELOCs are predominantly pegged to the prime rate, which moves in step with the Federal Reserve.

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Chapter Eleven Life After Short Sale: When You Want To Buy A Home Again...FHA To The Rescue!

Remember, after a short sale, it’s possible to obtain a new mortgage in as few as 18 to 24 months, assuming all other credit has been kept clean.

Get ready for FHA loans to become the best choice EVEN in the high priced areas like California!

It’s now possible to get a FHA Mortgage in certain parts of the country for over $700,000!

Visit this web address for updated FHA mortgage limits for your state. http://www.hud.gov/offices/hsg/sfh/lender/sfhmolin.cfm You Must Know How FHA Loans Work: First, it’s important to understand that FHA is not only for first time home buyers, anyone can sign up for an FHA loan, as long as you don’t have more than one FHA Loan at a time.

Your job is to establish a relationship with an FHA approved lender. Not all lenders hold this qualification.

Little Known SECRETS of FHA Loans: *FHA Can Help Clients With Blemished Credit History. New programs are coming out that will allow borrowers with credit score in the high 500s buy a home. * Bankruptcy. You can obtain an FHA loan two years from the date of your bankruptcy discharge, as long as you've maintained good credit since your debts were discharged. *Foreclosure. If you keep your credit in excellent shape after a foreclosure, an FHA loan will be available to you two years from the final date of your foreclosure.

Ultra Competitive Rates & Terms * There is little or no adjustment to the interest rate for an FHA loan, as the rates vary within .125 percent of a conventional loan. * Mortgage insurance is funded into the loan, meaning a premium of 1.5% is added to the loan balance instead of being paid out-of-pocket. In addition, a small portion for the 23 |

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mortgage insurance premium is added to the monthly payment, but it is far less than private mortgage insurance premiums. * Qualifying Borrowers can finance 97% of the purchase price and put down 3 percent. In some instances, when combined with other types of loans, the down payment can be zero.

•

Allowable debt ratios are higher than the debt-ratio limits imposed for conventional loans.

•

Borrowers can get up to 6% back from the seller to help with all of their closing costs.

Forget what you thought you knew about FHA… At one point, FHA repair demands were so excessive that sellers would discount the list price to buyers who would agree to obtain conventional loans over FHA loans. Today the requirements appear more reasonable. * You can purchase a home in need of repairs and finance the repair costs with the mortgage. This way you can make the necessary repairs immediately without having to come up with the money yourself. * You can purchase manufactured homes and condominiums with a FHA loan. * You can finance the cost of energy-efficient repairs with the mortgage. * Defective roofs that leak still need to be replaced but an older roof does not necessitate replacement if it doesn't leak. A roofing certification is acceptable in most cases. * Windows that stick upon opening or have cracked panes do not require replacement. * FHA appraisals do not take the place of a home inspection, and never have. Buyers should still obtain a professional home inspection.

It’s time to take advantage of the return of the FHA loan! It’s about to become significantly better than before, with higher limits and an easier appraisal process.

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Chapter Twelve Something You Should Know: The Death Of The HELOC….Millions Of Homeowners Shut Out. Most major lenders have frozen withdrawals from Home Equity Lines of Credit (HELOCs) – and I don’t want you to be caught off guard by this development. If you were planning on using your HELOC for spring home improvements or college tuition chances are the money has been shut off.

You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing (performing Broker Price Opinions, or Appraisals) properties and then suspending access for account holders who have seen a downward slide in their home value. Many real estate agents who do BPOs are reporting to us a dramatic increase in BPO requests from lenders for this reason.

Actual notice from Countrywide...sent to borrowers: ‘Important message about your loan: At Countrywide Home Loans we are committed to helping customers sustain homeownership. As part of the commitment, and in keeping with its sound risk-management and responsible lending practices, Countrywide Home Loan is reviewing and analyzing home equity lines of credit in its servicing portfolio.

We believe that the decline in the value of your property, from its original appraised value at the time your loan is significant. In accordance with the terms of your Home Equity Credit Line Agreement and Disclosure Statement (Agreement), we have elected to suspend further draws against your account as of the Effective Date above.’

The Los Angeles Times recently reported that Countrywide notified many homeowners they’ve lost their right to borrow against their credit lines: ‘Tens of thousands of homeowners with home equity lines of credit are getting a rude surprise: They’ve been told by their lender that they can no longer take money out on their credit lines because sinking home prices have left them with little or no equity.

Among the lenders taking such action is Countrywide Financial Corp., which sent 122,000 letters to customers last week telling them they could no longer borrow against their credit lines. In some cases, according to the company, the borrowers are now “upside down” — the total debt on the home exceeds the market value of the property.

Calabasas-based Countrywide, the nation’s largest mortgage lender, says it uses computer modeling that factors in changes in home prices to determine which customers will have their money tap shut off.’

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If there was any question that consumers were feeling the pinch before…just wait until they are told that their homes are worth LESS than what they owe. Or in the word of Countrywide, “Significantly Less”. Do you think that will have an effect on the economy? Think this will make consumers feel more confident about housing?

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Conclusion Myself and the members of The Valley Solutions Team at Solutions Real Estate hope you have found this book helpful, informative and easy to use.

Please note that with the amount of information in this book, some of the facts may change from time to time.

I would also like to reinforce the fact that every situation is different, every lender works differently and everyone has different circumstances and expectations regarding short sales and foreclosures. Setting the correct expectations with you about the possible outcome is paramount. This is not a normal market and there is nothing normal or short about short sales.

You have our word that we will always be open and honest when trying to help you.

Sometimes it might not be your best option and we want to help you make the best decisions regardless.

Please contact a member of The Valley Solutions Team by visiting www.ValleySolutionsTeam.com or sending an email to us at info@valleysolutionsteam.com Thank you and best wishes,

David Dion The Valley Solutions Team Solutions Real Estate

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Appendix A: Loss Mitigation Companies and Contact Info This is the most complete list of loss mitigation phone numbers for lenders on the Internet. It is sorted in alphabetical order. The first step to stop foreclosure is to contact your lender and try and obtain a reasonable loan workout or repayment plan. The quicker you get the ball rolling, the better chance you have of striking a deal with your lender, so you can save your home and your credit. The hardest call is the first. It only gets easier after that. Time is ticking and it goes by fast when you’re behind the infamous 8 ball. As Nike would say, “Just Do It!” Here’s the list: Lender/Servicer Loss Mitigation Phone Numbers & Contact Information: ABM AMRO Mortgage (800) 783-8900 Web: https://www.mortgage.com/C3/application.busAccredited Home Lenders (877) 683-4466 AMC Mortgage Services (Also handles loans originated by Ameriquest and Argent) (800) 211-6926 1600 McConnor Parkway Schaumburg, IL 60173 Web: https://www.myamcloan.com/malwebapp/begin.do American Home Mortgage Corp. (877) 304-3100* Ameriquest Mortgage (Debt collection — see AMC Mortgage Services) (800) 2116926 Aurora Loan Services (Debt collection) (800) 550-0508

By Overnight Mail: 601 5th Avenue Scottsbluff, NE 69361 Attn: Customer Service

By Regular Mail: P.O. Box 1706 Scottsbluff, NE 69363 E-mail: ccnmail@alservices.com Web: https://www.alservices.com/Consumer/UI/SSL/Authentication/Login.aspx?ReturnUrl=%2 fConsumer%2fUI%2fSSL%2fServ icing%2fDefault.aspx Avelo Mortgage LLC (866) 992-8356*Bank of America (800) 846-2222BB&T Mortgage (800) 827-3722* AmTrust Bank (aka Ohio Savings Bank) (888) 696-4444

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Beneficial (800) 333-5848 Central Pacific Bank (800) 342-8422* Charter One (800) 234-6002 Chase (800) 548-7912 Loss Mitigation (877) 838-1882 ext 52195 The Number you will be directed to after you give your loan number: (866) 665-7629 (business hours are 11AM-8PM M-TH, 8AM12PM F) Chase Home Finance (800) 848-9136 (customer service) (858) 605-2181 (delinquency customer service) Chase Home Finance-New Jersey (800) 446-8939*Chevy Chase Bank (800) 933-9100* Web: https://chaseonline.chase.com/chaseonline/logon/sso_logon.jsp?fromLoc=ALL&LOB=C OLLogon Chase Manhattan Mortgage (800) 446-8939 (Ohio Servicing Center) (800) 526-0072 (Florida Servicing Center) (800) 527-3040 x533 (Florida Servicing Center) Chevy Chase Bank (800) 933-9100 Web: https://www.chevychasebank.com/htm/payment.html (Payment Addresses) Citi Financial Mortgage (800) 753-3673 Citimortgage (800) 283-7918 Countrywide (800) 262-4218 Web: https://customers.countrywide.com/se‌t_login254.asp Ditech (800) 852-0656 (800) 449-8582 Downey Financial Corp. (800) 824-6902, ext. 6696 Deutsche Bank National Call Number on Mortgage Statement EMC (800) 723-3004 P.O. Box 141358 Irving, TX 75014-1358 Web: https://www.emcmortgageservicing.com/ccn/ccnsecurity.asp EverBank (800) 669-7724 ext. 4730 Equity One (Debt collection) (866) 361-3460 First Horizon Home Loans (800) 489-2966* Fifth Third Bank (800) 375-1745 Option 3

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First Merit Bank (888) 728-9931 Flagstar Bank (800) 968-7700, ext. 9780 Fremont Investment & Loan (866) 484-0291 GMAC Mortgage (800) 850-4622 GreenPoint Mortgage Funding (800) 784-5566, ext. 5383* Green Tree (877) 816-9125 Homecomings Financial (800) 799-9250 HomeEq Mortgage Servicing (Debt collection) (866) 822-1471 Household Finance (An HSBC Co.) (800) 333-5848 Household Mortgage (800) 333-4489 HSBC Mortgage (800) 338-6441 Default Resolution Team (if long term problem) 2929 Walden Avenue Depew, NY 14043 (888) 648-3124 Loss Mit (732) 352-7519 Fax Web: http://us.hsbc.com/personal/mortgage/existing/difficulties.asp Huntington National Bank (800) 323-4695 Indymac Bank (877) 736-5556 C/O Loan Resolution Department P.O Box 7014 Pasadena, CA 91107 (Monday - Friday 6:15am-7:15pm. (Pacific Time) Web: https://www.indymacbank.com/contactus/loanResolution.asp Irwin Mortgage (888) 218-1988 P.O Box 7014 Pasadena, CA 91107 Web: https://www.irwinmortgage.com/wps/portal/!ut/p/cxml/E-mail: deliquency.prevention@irwinmortgage.comJames B. Nutter & Company (800) 3157334Key Bank (800) 422-2442 LaSalle National Bank (800) 783-8900 Litton Loan Servicing (800) 999-8501 or (800) 548-8665 Fax (713) 966-8820 30 |

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4828 Loop Central Drive Houston, Texas 77081-2226 Web: https://www.littonloan.com/index.asp Loss Mitigation Department Hours: Monday Eastern: 9 a.m. - 7 p.m. Central: 8 a.m. - 6 p.m. Mountain: 7 a.m. - 5 p.m.

Pacific: 6 a.m. - 4 p.m.

Tuesday-Thursday Eastern: 9 a.m. - 9 p.m. Central: 8 a.m. - 8 p.m. Mountain: 7 a.m. - 7 p.m. Pacific: 6 a.m. - 6 p.m.

Friday Eastern: 10 a.m. - 6 p.m. Central: 9 a.m. - 5 p.m. Mountain: 8 a.m. - 4 p.m.

Pacific: 7 a.m. - 3 p.m.

Default Counseling Department representatives are also available most weekends on Saturday from 8 a.m. to 12 p.m. and Sunday from 10 a.m. to 2 p.m. (CST).

Midland Mortgage (800) 552-3000 or (800) 654-4566 Web: https://www.mymidlandmortgage.com/MyMortgage/Login/Login.asp Mortgage Lenders Network (800) 691-0129 E-mail: customerservice@mlnusa.com Web: http://www.mlnusa.com/customers/info_credithelp.aspMortgage Electronic Registration Systems (MERS) (888) 679-6377National City (800) 367-9305, Ext. 53221 or (800) 523-8654 Attention: Homeowner’s Assistance 3232 Newmark Dr. Miamisburg, Ohio 45342 (8AM-10:30PM ET, Monday - Thursday) (8AM-5PM ET, Friday) (8AM-Noon, Saturday) Web: http://www.nationalcitymortgage.com/service_assistance.asp Nationwide Advantage Mortgage Company (800) 356-3442, ext. 6002* NationStar Mortgage (888) 850-9398* Press 0 for operator New Century Financial Now Carrington Mortgage Services (800) 790-9502 or (877) 206-9904 (6:00 a.m. to 7:00 p.m. Pacific Time, Monday - Thursday) (6:00 a.m. to 6:00 p.m. Pacific Time, Friday) Web: https://myloan.newcentury.com/webapps/servicing/myloans/index.do NovaStar Mortgage Loan Resolution Department (888) 743-0774 Non-English: (888) 743-0774, ext. 4523 Ocwen Federal Bank (800) 746-2936 or (877) 596-8560 Web: http://www.ocwencustomers.com/csc_fa.cfm Attention: Financial Information 12650 Ingenuity Drive 31 |

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Orlando, Florida 32826 or Ocwen Financial Corporation 1661 Worthington Rd., Suite 100 West Palm Beach, Florida 33409 Phone: 877-226-2936 For serving Ocwen with legal process, please send to their registered agent: Corporation Service Company 2711 Centerville Road, Suite 400 Wilmington, DE 19808 Phone: 561-682-8000, x8386 Option One (866) 711-1962 or (888) 275-2648 Web: http://www.oomc.com/servicing/servicing_baifaqs.asp PHH Mortgage (Formerly Cendant) (800) 257-0460 For borrowers facing possible delinquency: (800) 330-0423* For borrowers in the foreclosure process: (800) 750-2518 Web: https://www.phhmortgage.com/sso/mq/login ResMae Mortgage Corp. (877) 473-7623, ext. 5944 Saxon (800) 665-7367 Select Portfolio Servicing (888) 818-6032 Fax: (801) 293-3936 Loan Resolution Department P.O. Box 65250 Salt Lake City, UT 84165-0250 (Monday - Thursday 10:00 a.m. - 10:00 p.m. EST) (Friday 10:00 a.m. - 7:00 p.m. EST) (Saturday 9:00 a.m. - 1:00 p.m. EST) Web: http://www.spservicing.com/services/customer/loanresolution.htm SkyBank (800) 290-3359 Sun Trust Mortgage (800) 634-7928 PO Box 26149 Richmond, VA 23260-6149 Mail Code RVW 3003Web: https://www.suntrustmortgage.com/generalquestions.asp# Third Federal Savings (888) 844-7333 US Bank (800) 365-7900 Wachovia Bank of Delaware (866) 642-8608 32 |

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Washington Mutual (866) 926-8937 or (888) 453-3102 or (800) 478-0036 or (800) 2543677 Waterfield Mortgage (800) 957-7245 Fax: (260) 459-5390 c/o Loss Mitigation Dept.

7500 W. Jefferson Blvd.

Fort Wayne, IN 46804 (7 am – 10 pm EST Monday – Thursday) (7 am – 9 pm EST Fridays) (8 am – 2 pm EST Saturdays) E-Mail: saveyourhome@waterfield.com Web: http://www.waterfield.com/scripts/cgiip.exe/WService=wfg/pub/borrowerservices/delqas st Wells Fargo (877) 216-8448 or (866) 261-5642 or (800)766-0987 or (800) 678-7986 for payment assistance Borrower Counseling Services Monday - Friday 8:00 a.m. - 9:00 p.m., CT Saturday 9:00 a.m. - 2:00 p.m., CT Web: https://www.wellsfargo.com/mortgage/account/ Wendover Financial Services Corporation (800) 934-1081 or (800) 436-1022 Web: http://www.wendover.com/borrowers.html Wilshire Credit Corporation (888) 502-0100 P.O. Box 8517 Portland, OR 97207-8517 From 6 a.m. to 5 p.m. (Pacific time) Monday through Friday Web: http://www.wfsg.com/borrower/borrower.aspx *No direct line to the loss mitigation or loan modification department. But we are working on it

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APPENDIX B What’s the difference between Short Sale vs. Short Payoff?

In our current real estate environment it is crucial that to fully understand the difference between a “Short Sale” and a “Short Payoff”.

A Short Sale is where the lender or investor agrees to accept an amount less than actual owed on the property.

The Criteria for a Short Sale are that the borrower demonstrates a verifiable long term hardship.

A Short Payoff is when the lender agrees to release the lien (their interest) on the property and allow the property to be “conveyed” to a new owner. The lender agrees to accept less than the amount owed on the property to release the lien however they extend a certain amount of “credit” to the borrower in the form of an unsecured line of credit or promissory note.

The Criteria for a Short Payoff – The mortgage is current, the borrower has great credit, the borrower had and can demonstrate the ability to pay off the debt.

When would you request a Short Payoff? – You would request a short payoff when the home has lost value dramatically and you do not have the ability to pay the large amount to get completely out of the property.

Note – Not all lenders will allow for a Short Payoff, however you will never know if you never ask.

Advantages of a Short Pay-Off: • You are able to move out of the property and get on with your life.

• You SHOULD receive no negative feedback on your credit.

• You may obtain a lower interest rate on the loan. Sometimes 1-2%.

If for some crazy reason your ability to pay changes and you client are not able to pay on the note, the credit ramifications are significantly smaller.

How to apply for a short payoff 1. If possible call the lender and ask them if they will accept a short payoff. Remember you may need to talk to a supervisor or to loss mitigation directly.

2. Put together your package, this is the same information as your short sale package, however the goal is to show the lender the ability to pay not the inability to pay.

3. Do not accept the first no as the answer, and never paint a lender or servicer with a broad brush. Remember most lenders do not work with just one investor, lenders sell 34 |

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their loans to different investors so if Countrywide says no today that does not mean no tomorrow.

Man in the Arena "It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat."

Theodore Roosevelt

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APPENDIX C: The Complete State-by-State Guidebook on the most Common Foreclosure Procedures.

This section is written for the purpose of providing current information in regard to the topics as set forth in the text. It is not the intention of any author or publisher herein, to provide the reader with specific legal, financial, tax, accounting or professional advice.

Understand that each business transaction presents a whole different or unique set of circumstances. Each state is different and applicable laws, regulations and terminology for related subjects may vary in different jurisdictions. Considerable efforts are made to provide the reader with timely and accurate information; however there are no guarantees. Therefore, if expert assistance and advice is required, the reader should always seek the services of a competent professional.

The following information was compiled by David E. Dion and Members of the Valley Solutions Team at Solutions Real Estate from sources such as www.ForeclosureLaw.org.

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Common Foreclosure Terminology Accelerate An option given to lenders through an "acceleration" clause in the mortgage or deed of trust requiring the borrower to pay the entire balance of the loan all at once if their loan is in default.

Affidavit A sworn statement in writing usually given while under oath or in the presence of a notary.

Appraisal The process in which a licensed or authorized person gives an estimate of property value.

Appreciation The difference between the increased value of the property and the original value.

Assignment The transfer of property to be held in trust or to be used for the benefit of the creditors (lenders).

Bid The offered amount for a property for sale at auction.

Certificate of Sale A document given to the winning bidder at a foreclosure sale stating their rights to the property once the borrowers redemption period has expired.

Clear Title A title that is not burdened with defects.

Credit Bid A bid on behalf of the lender at a foreclosure sale. The bid amount must be less than or equal to the balance of the loan in default.

Decree A judicial decision.

Deed A signed document that transfers ownership of property from one party to another.

Deed-in-lieu of Foreclosure An instance where borrowers voluntarily convey their rights in a property to the lender.

Deed of Trust A three party security instrument conveying the legal title to real property as security for 37 |

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the repayment of a loan. The three parties included in a deed of trust are the borrower, lender and trustee.

Default A mortgage or deed of trust is said to be in default when the borrower fails to make the payments as agreed to in the original promissory note.

Deficiency Judgment A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.

Equitable Title The present right to possession with the right to acquire legal title once a preceding condition has been met.

Fair Market Value The price a property would sell for on the open market.

Foreclosure The forced sale of property pledged as security for a debt that is in default.

Free & Clear Ownership of property free of all indebtedness.

Judicial Foreclosure A foreclosure that is processed by a court action.

Lien A charge upon real or personal property for the satisfaction of a debt.

Legal Description A formal description of real property sufficient to locate it by reference to government surveys or approved recorded maps.

Lender A person who lends money for temporary use on condition of repayment with interest (i.e., the bank, mortgage company, etc.).

Lis Pendens A recorded notice of pending lawsuit.

Mortgage A written pledge of property that is used as security for the repayment of a loan.

Non-judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a 38 |

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mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default.

Notary A public officer licensed by the state to attest to and certify the validity of signatures of others. A notary is often referred to as a notary public.

Notice of Sale A notice giving specific information about the loan in default and the proceedings about to take place. This notice must be recorded with the county where property is located and advertised as stated in the security document or as dictated by state law.

Personal Property Property other than real property consisting of things temporary or movable.

Posting To publish, announce or advertise by physically attaching a notice to an object.

Postponement Postponement means to put off to a later time. In the case of a foreclosure sale, this is generally done by announcement at the original sale or by posting notices establishing the new date and time the foreclosure sale will take place.

Right of Redemption A borrower's right to reacquire property lost due to a foreclosure.

Request for Notice A recorded document requiring a trustee send a copy of a Notice of Default or Notice of Sale concerning a specific deed of trust in foreclosure to the person who filed the document.

Subject To The purchase of a property with an existing lien against the title without assuming any personal liability for the liens payment.

Title The instrument that is evidence of a person's right in real property (i.e., a deed).

Trustee A neutral party who advertises the foreclosure property for sale and conducts the auction to sell said property to the highest bidder.

Trustee Sale An auction of real property conducted by a trustee. Also known as a Sheriff's Sale.

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Upset Bid A recorded bid placed after a foreclosure sale has ended that is higher than the highest bid received at the actual foreclosure sale.

Writ An order or mandatory process in writing issued in the name of a court or judicial officer commanding the person to whom it is directed to perform or refrain from performing a specified act.

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Alabama Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Varies by Process; Typically 30 - 60 days - Right of Redemption: 12 months - Deficiency Judgments Allowed: Yes In Alabama, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. However, when no power of sale is present, lenders may, at their option, choose to forego a lawsuit and foreclose by selling the property, as outlined below in the "No Power of Sale Foreclosure Guidelines".

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, if the deed of trust or mortgage contains a power of sale clause, but does not specify the time, place and terms of sale, then a foreclosure sale may take place at the front or main door of the courthouse of the county where the property located, after default of the deed of trust or mortgage, for cash to the highest bidder. The sale may not take place until thirty (30) days after the last notice of sale is published.

Said notice of sale must be given by publication once a week for four (4) successive weeks in a newspaper published in the county or counties in which the property is located. If the property is under mortgage in more than one county, the publication is to be made in all counties where it is located. The notice of sale must give the time, place and terms of said sale, together with a description of the property.

If no newspaper is published in the county where the lands are located, the notice shall be placed in a newspaper published in an adjoining county for four (4) successive weeks.

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No Power of Sale Foreclosure Guidelines If no power of sale is contained in a mortgage or deed of trust, the lender, or any assignee thereof, may, after default of the mortgage or deed of trust, either file a lawsuit to foreclose or foreclose by selling the property to the highest bidder for cash at the courthouse door of the county where the property is situated. Said sale may not take place until after notice of the time, place, terms and purpose of the sale has been published for four (4) consecutive weeks in a newspaper published in the county wherein said lands, or a portion thereof are situated. *Courtesy of www.ForeclosureLaw.org

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Alaska Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Varies by Process; Typically 90 days - Right of Redemption: Varies by Process - Deficiency Judgments Allowed: Varies by Process In Alaska, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or nonjudicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, has been instituted more since the late 1980's, when lenders found that they were foreclosing on residential property worth substantially less than the amount owed. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

In the case of judicial foreclosure, the process is carried out according to the rules of equity, deficiency suits are permitted and the borrower has no rights of redemption.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed, provided it meets the minimum protection laws set forth by the State of Alaska. Otherwise, the non-judicial power of sale foreclosure is carried out in the following three phases: The trustee must record a notice of default in the office of the recorder of the recording district in which the property is located not less than thirty (30) days after the default and not less than three (3) months before the sale.

Said notice of default must state the name of the borrower, the book and page where the deed is recorded and it must describe the property, the borrower’s default, the amount the borrower owes, and the trustee’s desire to sell. It must also state the date, time and place of the sale.

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Within ten (10) days after recording the notice of default, the trustee must mail a copy of the same by certified mail to the last know address of (1) the borrower, and (2) any person whose claim or lien on the property appears of record or is known to the lender of trustee and (3) any occupant. The trustee may have the notice delivered personally instead of sending it by certified mail.

Any time before the sale, the borrower may cure the default and stop the sale by paying a sum equal to the missed payments plus attorney’s fees. The lender may not require the borrower to pay off the entire remaining principal balance of the loan to cure the default, just the missed payments and attorney’s fees.

If the lender has recorded a notice of default two or more times, then the Alaska statutes provide that the lender can refuse to accept the borrower’s monies for the missed payments and attorney’s fees and proceed with the foreclosure sale instead.

The sale must be made at a public auction held at the front door of a courthouse of the superior court in the judicial district where the property is located. The trustee must sell to the highest and best bidder and the lender may bid at auction.

The trustee may postpone sale of all or any portion of the property by delivering to the person conducting the sale a written and signed request for the postponement to a stated date and hour. The person conducting the sale shall publicly announce the postponement to the stated date and hour at the time and place originally fixed for the sale. This procedure shall be followed in any succeeding postponement.

When this type of foreclosure process is used, the borrower has a right to redeem the property and deficiency suits are not allowed.

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Arizona Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: None - Deficiency Judgments Allowed: Varies In Arizona, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or nonjudicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: The trustee must record a notice of sale in the office of the recorder of the county where the property is located. Within five (5) days after the notice is recorded, the trustee must mail, by certified mail, a copy of the notice of sale to each of the people who are parties to the trust deed, except for himself. Additionally, the notice must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the last notice being published not less than ten (10) days prior to the date of the sale.

Optionally, if it can be done without a breach of the peace, the trustee can post the notice at least twenty (20) days prior to the date of the sale, in some conspicuous place on the property to be sold and/or he or

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she can post the notice at the courthouse or at a specified place at the place of business of the trustee in the county in which the property is located.

The trustee or the trustee’s agent must conduct the sale. The sale is for cash to the highest bidder, except that the lender can make a "credit bid," which means to cancel out some part (or all) of the money the borrower owed the lender on the lean, instead of paying cash. A successful high bidder must pay the bid price by 5 pm of the day after the bid, other than a Saturday or legal holiday. Every bid is an irrevocable offer until the sale is completed, which happens when the bidder pays the bid price to the trustee’s satisfaction. If the high bidder fails to make the payment by 5:00 pm, the day after being notified of the option to buy, then the trustee may postpone the sale.

The trustee may postpone the sale to another time, or another place, by giving notice of the new date, time and place by public declaration at the last place and time the property was offered for sale. No other notice is required. A trustee may also, by written agreement, extend the time for a buyer to come up with the payment.

Once the sale is complete, the proceeds will go to the payment of the obligations secured by the deed of trust that was foreclosed, then to junior lien holders in order of their priority. The successful bidder gets a trustee’s deed, which provides conclusive evidence that the trustee conducted the foreclosure sale property.

A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. However, in foreclosures against other types of property, a deficiency suit is allowed, but is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within ninety (90) days of the power of sale foreclosure.

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Arkansas Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 120 days - Right of Redemption: Varies - Deficiency Judgments Allowed: Varies In Arkansas, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. However, an appraisal of the property must be made prior to the schedule date of foreclosure.

In any foreclosure under a mortgage or deed of trust in Arkansas, the property must sell for not less than two-thirds of the appraised value. If it does not, then it may be offered for sale again within twelve (12) months. The second sale may be to the highest bidder without reference to the previous appraisal.

Judicial Foreclosure In judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, then the clerk of the court, as commissioner, advertises the property for sale.

Sales of real property under court order will be on a credit of not less than three (3) months, but not more than six (6) months, or on installments to not more than four (4) months credit overall. To secure payment, a lien will be retained on the property for its price and the purchaser must also give a bond with surety for the amount of the purchase price.

The lender may bid at the sale by crediting a portion (or all) of the amount the court found was owed to the lender against the sales price of the property purchased at the foreclosure sale. If the real estate does not sell for an amount equal to what’s due on the mortgage loan, then the lender may seize other property from the borrower as in an ordinary judgment.

The borrower has one (1) year from the date of the sale to redeem the property by paying the amount for which the property was sold, plus interest.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

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If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: The trustee must record a notice of sale in the office of the recorder of the county where the property is located. The mortgagee's or trustee's notice of default and intention to sell shall be mailed within thirty (30) days of the recording of the notice by certified mail to the borrower. This includes any borrower of record or of whom the lender has actual notice. The notice must also be mailed to anyone who records a Request for Notice that specifically described the mortgagee including its recording information.

Within five (5) days after the notice is recorded, the trustee must mail, by certified mail, a copy of the notice of sale to each of the people who are parties to the trust deed, except for himself. Additionally, the notice of default and intention to sell must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the last notice being published not less than ten (10) days prior to the date of the sale.

Said notice of default and intention to sell must contain the names of the parties to the mortgage or deed of trust, a legal description of the trust property and, if applicable, the street address of the property, the book and page numbers where the mortgage or deed of trust is recorded or the recorder's document number, the default for which foreclosure is made, the mortgagee's or trustee's intention to sell the trust property to satisfy the obligation, including, in conspicuous type, a warning as follows: "YOU MAY LOSE YOUR PROPERTY IF YOU DO NOT TAKE IMMEDIATE ACTION" and the time, date, and place of sale.

Any person including the mortgagee (lender) may bid at the sale, except the trustee, who may bid on the behalf of the beneficiary (lender) but not for himself or herself in deed of trust sales. The high bidder must pay the price bid at the time of sale, or within ten (10) days. The lender may bid by canceling out what it is owed on the loan, including unpaid taxes, insurance, costs or sale and maintenance, but for cash for any higher price.

The trustee may postpone the sale by public proclamation at the time, place and date last appointed for sale, up to seven (7) days past the original date, but if for a longer time, then the whole notice procedure must be performed a second time, including the sixty (60) day wait.

Once the sale is complete, the proceeds will go to the pay for the expenses of the foreclosure sale, then toward the obligations secured by the trust deed that was foreclosed and then to junior lien holders in order of their priority. The original borrower is entitled to receive any remaining funds. The successful bidder receives a trustee’s deed.

The lender may sue the borrower for a deficiency within twelve (12) months of a power of sale clause foreclosure. The lender may sue for (1) the difference between the foreclosure sale price and the balance due on the loan, or (2) the balance due on the loan minus the fair market value of the property, whichever is less.

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California Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 120 days - Right of Redemption: Varies - Deficiency Judgments Allowed: Varies In California, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Using this type of foreclosure process, lenders may seek a deficiency judgment and under certain circumstances, the borrower may have up to one (1) year to redeem the property.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: A notice of sale must be: 1) recorded in the county where the property is located at least fourteen (14) days prior to the sale; 2) mailed by certified, return receipt requested, to the borrower at least twenty (20) days before the sale; 3) posted on the property itself at least twenty (20) days before the sale; and 4) posted in one (1) public place in the county where the property is to be sold.

The notice of sale must contain the time and location of the foreclosure sale, as well as the property address, the trustee's name, address and phone number and a statement that the property will be sold at auction.

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The borrower has up until five days before the foreclosure sale to cure the default and stop the process.

The sale may be held on any business day between the hours of 9:00 am and 5:00 pm and must take place at the location specified in the notice of sale. The trustee may require proof of the bidders ability to pay their full bid amount. Anyone may bid at the sale, which must be made at public auction to the highest bidder. If necessary, the sale may be postponed by announcement at the time and location of the original foreclosure sale.

Lenders may not seek a deficiency judgment after a non-judicial foreclosure sale and the borrower has no rights of redemption.

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Colorado Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically four months - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Colorado, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines The foreclosure process in Colorado is quite a bit different than in other states because here, the governor appoints a "Public Trustee" for each county in the state. The trustee must act as an impartial party when handling a power of sale foreclosure. In Colorado, the non-judicial power of sale foreclosure is carried out as follows: The process begins when the attorney representing the lender files the required documents with the Office of the Public Trustee of the county where the property is located. The Public Trustee then files a "Notice of Election and Demand" with the county clerk and recorder of the county. Once recorded, the notice must be published in a newspaper of general circulation within the county where the property is located for a period of five (5) consecutive weeks.

The Public Trustee must also mail, within ten (10) days after the publication of the notice of election and demand for sale, a copy of the same and a notice of sale as published in the newspaper, to the borrower and any owner or claimant of record, at the address given in the recorded instrument. The Public Trustee

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must also mail, at lease twenty-one (21) days before the foreclosure sale, a notice to the borrower describing how to redeem the property.

The owner of the property may stop the foreclosure proceedings by filing an "Intent to Cure" with the Public Trustee's office at least fifteen (15) days prior to the foreclosure sale and then paying the necessary amount to bring the loan current by noon the day before the foreclosure sale is scheduled.

The foreclosure sale must take place between forty-five (45) and sixty (60) days after the recording of the election and demand for sale with the county clerk and recorder. The Public Trustee may hold the sale at any entrance to the courthouse, unless other provisions were made in the deed of trust.

The lender has the option to file a suit for deficiency in Colorado and the borrower has up to seventy five (75) days after the sale to redeem the property by paying the foreclosure sale amount, plus interest.

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Connecticut Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 60 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes In Connecticut, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure The judicial foreclosure process in Connecticut is carried out by either strict foreclosure or a decree of sale.

With strict foreclosure, no actual foreclosure sale is held. Instead, the lender goes to court to try and obtain a court order demonstrating the borrower is in default of the mortgage. If successful, the title transfers to the lender immediately.

However, the court sets an established amount of time in which the borrower may redeem the property, but if they fail to do so, the title becomes absolute to the lender and the borrower has no longer has any claim to the property. The lender then has thirty (30) days to record a certificate of foreclosure, which must contain a description of the property, the foreclosure proceedings, the mortgage and the date the title became absolute.

With a decree of sale, the court: 1) establishes the time and manner of the sale; 2) appoints a committee to sell the property; and 3) appoints three appraisers to determine the value of the property.

The borrower may stop the foreclosure proceedings at any time before the sale by paying the balance due on the mortgage. If no such payment is made, the committee will go forward with the sale.

The lender may sue to obtain a deficiency judgment in Connecticut.

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Delaware Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 90 days - Right of Redemption: No - Deficiency Judgments Allowed: No In Delaware, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure Lenders in Delaware are given a number of options in which they may pursue judicial foreclosure, but the most commonly used procedure is the Scire Facias.

This proceeding is quite different from other judicial foreclosures because instead of the lender having to prove the borrower is in default of the mortgage, the borrower has to prove he isn't. Although the suit to obtain an order for foreclosure is filed by the lender, the borrower must appear in court within twenty (20) days of being served a writ to provide evidence as to why the foreclosure should not take place. Unless the court is satisfied with the borrowers explanation and evidence, they will authorize a foreclosure sale.

Said sale must be conducted by the sheriff and held either at the courthouse or at the property itself at least fourteen (14) days after the notice of sale is posted on the property and in other public places throughout the county in which it is located.

The buyer has no right of redemption once the court has confirmed the sale.

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Florida Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 180 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Florida, all mortgages are foreclosed in equity. In a mortgage foreclosure action, the court severs, for separate trial, all counterclaims against the foreclosing lender. The foreclosure claim shall, if tried, be tried to the court without a jury.

The court order of foreclosure will specify how the foreclosure must take place, and the foreclosure must take place on those terms. Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is required to be placed in a newspaper, it is the responsibility of the lender or their representative to place such advertisement, publication, or notice.

Equitable Right of Redemption ends at the foreclosure sale (or at another time specified by the courts, but this rarely happens). There is a period of time after the sale that "the court reviews the sale to ensure a fair price has been paid." Basically, this period of time allows parties to object to the sale on the basis that proper procedures were not followed or collusion existed between the bidders, for example. This period is usually 10 days, after which the Certificate of Sale is filed and title passes, if the sale is confirmed. If the sale is not confirmed, another sale is ordered. (Reference F.S. Chapter 702) The lender may sue to obtain a deficiency judgment in Florida.

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Georgia Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Georgia, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.

Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: A foreclosure notice must be mailed by certified mail, return receipt requested to the borrower no later than 15 days prior to the date of the foreclosure sale. The time period begins the day the letter is postmarked. The notice must be mailed to the address given to the lender by written notice from the borrower. No waiver or release of the rights to notice is valid if it was signed at the same time as the original documents.

The notice must be published in a newspaper of general circulation in the county where the sale will be held once a week for four (4) weeks proceeding the date of the foreclosure sale.

The sale must be made by public auction on the first Tuesday of the month between 10:00 am and 4:00 p.m. at the courthouse.

Lenders may seek a deficiency judgment in Georgia.

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Hawaii Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: None - Deficiency Judgments Allowed: Yes In Hawaii, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or nonjudicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. The notice of intent to foreclose must be published once a week for three (3) successive weeks, the last publication to be not less than fourteen (14) days before the day of sale, in a newspaper having a general circulation in the county in which the mortgaged property is located.

Copies of the notice must be mailed or delivered to the mortgagor, the borrower, any prior or junior creditors, the state director of taxation and any other person entitled to

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receive notice. Additionally, the notice must be posted on the premises not less than twenty-one (21) days before the day of sale.

Said notice must state: 1) The date, time, and place of the public sale; 2) The dates and times of the two (2) open houses of the mortgaged property, or if there will not to be any open houses, the public notice shall so state; 3) The unpaid balance of the moneys owed to the mortgagee under the mortgage agreement; 4) A description of the mortgaged property, including the address or description of the location of the mortgaged property, and the tax map key number of the mortgaged property; 5) The name of the mortgagor and the borrower; 6) the name of the lender; 7) The name of any prior or junior creditors having a recorded lien on the mortgaged property before the recordation of the notice of default; 8) The name, the address in the State, and the telephone number in the State of the person in the State conducting the public sale; and 9) The terms and conditions of the public sale.

Additional wording, as required by the State of Hawaii, may be found here.

2. Up until three (3) days before the sale, the borrower may cure the default and stop the sale by paying the lien debt, costs and reasonable attorney's fees, unless otherwise agreed to between the lender and the borrower.

3. The sale, which may be held no earlier than fourteen (14) days after the last ad is published, is to be made at auction to the highest bidder.

4. Any sale, in which notice has been given, may be postponed from time to time by public announcement made by the lender or their representative.

There are no rights of redemption in Hawaii.

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Idaho Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: No - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust - Timeline: Typically 150 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Idaho, lenders may foreclose on deeds of trusts in default using the non-judicial foreclosure process.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: The notice of sale must be recorded in the county where the property is located and given to the borrower and the occupants of the property (if not the borrower) at least one hundred twenty (120) days before the date of the sale.

The notice must be published in the newspapers in the county where the property is located at least once a week for four (4) consecutive weeks. The final ad must be run not less than thirty (30) days in advance of the foreclosure. The published notice must contact a legal description of the property, its street address and the name and phone number of someone who can give directions.

Said notice must describe the nature of the default, a legal description of the property, as well its street address, the lender's name, the date, time, and place of the sale, and the name and phone number of the person conducting the sale.

The foreclosure sale must take place on the date, at the time and at the place specified in the notice.

However, the sale may be postponed and held at a new time and place, so long as it is within thirty (30) days of the originally scheduled sale.

If the property consists of more than twenty (20) acres, the buyer has a period of one (1) year to redeem said property. If it is less than twenty (20) acres, the period of time is lessened to six months.

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Illinois Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Typically 210 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes Lenders in Illinois have a number of options available to them to foreclose on a mortgage in default.

Judicial Foreclosure A notice of the lenders intent to foreclose must be given to the borrower, and any other person entitled by Illinois statutes to receive notice, at least thirty (30) days prior to the courts judgment of foreclosure.

If the court finds in favor of the lender and issues a notice of sale, the sale will be conducted on the terms and conditions specified in the notice of sale, provided they meet the minimum standards provided in the Illinois Statutes.

The sheriff or any judge within the county where the property is located may conduct the sale. The borrower has no rights of redemption after the foreclosure sale.

Deed in Lieu of Foreclosure If the borrower has defaulted on the mortgage and the lender agrees, the borrower may simply give the deed to the lender and his interests in the property securing the deed will be terminated. If the lender agrees and accepts the deed, they may not seek to obtain a deficiency judgment against the borrower at any time afterward.

Consent Foreclosure In this type of foreclosure, the court enters a judgment satisfying the mortgage by giving absolute title to the property secured by the mortgage to the lender. The borrower has no rights of redemption after this type of foreclosure judgment has been rendered and the lender may not file for a deficiency judgment.

Lenders may also foreclose on a mortgage in default by using the common law strict foreclosure method, but Illinois law does not permit non-judicial power of sale foreclosures.

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Indiana Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 150 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Indiana, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder. However, there is a wait time between the date the suit was filed and the day the property is sold.

In Indiana, the date the mortgage was signed determines the length of time a lender must wait between filing the suit and proceeding with the foreclosure sale. The wait time is anywhere from three (3) to twelve (12) months, but the owner may file a waiver of the time limit, which allows the sale to proceed without delay. When this occurs, the lender loses the right to pursue a deficiency judgment.

The foreclosure sale process involves publishing an ad once a week for three weeks. The first ad must be run 30 days before the sale. At the time the first ad is run, each owner must be served with notice of the foreclosure sale by the sheriff. The sheriff conveys title by a deed given immediately after the sale. The owner may reside in the property, rent free, until the foreclosure sale, provided the owner is not committing waste, which means tearing up the property.

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Iowa Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Typically 150 - Right of Redemption: No - Deficiency Judgments Allowed: No In Iowa, lenders may foreclose on a mortgage in default using either the judicial or the alternative nonjudicial foreclosure process.

Judicial Foreclosure The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold.

Notice of the sale must be posted in at least three public places of the county, one of which shall be at the county courthouse. In addition, there shall be two weekly publications of such notice in some newspaper printed in the county, with the first publication being at least four weeks before the date of sale, and the second at a later time before the date of sale. If the borrower is in actual occupation and possession of the property, the notice must be served on them at least twenty days prior to the date of the sale.

The sale must be at public auction, between 9:00 am and 4:00 pm and the time must be stated clearly in the notice of sale. The sheriff shall receive and give a receipt for a sealed written bid submitted prior to the public auction. The sheriff may require all sealed written bids to be accompanied by payment of any fees required to be paid at the public auction by the purchaser, to be returned if the person submitting the sealed written bid is not the purchaser. The sheriff must keep all written bids sealed until the commencement of the public auction, at which time the sheriff will open and announce the written bids as though made in person.

The sale may be postponed, but if it postponed for more than three days, notice of the new sale must be publicly announced at the time the sale was to have been made.

Alternative non-judicial foreclosure procedure Borrowers in Iowa have the option of avoiding a foreclosure suit by voluntarily conveying all of their rights in the property secured by the mortgage to the lender. If the lender accepts the conveyance from the borrower, they are given immediate access to the property. However, they must waive any rights to file for a deficiency judgment against the borrower.

Additionally, the borrower is required to sign a "disclosure of notice and cancellation", which states, among other things, that they are voluntarily giving up their rights to reclaim or occupy the property. The borrower and lender must also file a jointly executed document with the county recorders office stating that they have chosen to proceed with the foreclosure using the voluntary foreclosure procedures.

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Kansas Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 120 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Kansas, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

The notice of the time and sale must be advertised once a week for three (3) consecutive weeks, with the last publication being no more than fourteen (14) and no less than seven (7) days before the scheduled date of sale. Notice of the sale must also be sent to the borrower within five (5) days of the first advertisement.

Unless otherwise ordered by the court, the sale is typically held at the courthouse of the county in which the property resides. The sale is by public auction to the highest bidder, who will receive a certificate of purchase. After the sale is confirmed, the winning bidder will be entitled to receive a sheriff's deed, which will vest good and perfect title to the foreclosure bidder, once the borrowers right of redemption has expired. The borrower typically has twelve (12) months from the date of the foreclosure sale to redeem the property.

Lenders may sue to obtain a deficiency judgment for the difference between the foreclosure sale price and the amount due on the original mortgage.

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Kentucky Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Varies - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes, but with restrictions In Kentucky, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure Generally, in judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, the clerk of the court then advertises the property for sale.

At some point prior to the scheduled date of foreclosure, an appraisal of the property must be made. If the foreclosure sale price is less than two-thirds of the appraised value, the borrower has a period of one year (12 months) from the date of the sale to redeem the property by paying the amount for which the property was sold, plus interest.

It is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the original loan and the foreclosure sale price, but only if the borrower was personally served with the lawsuit, or failed to answer.

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Louisiana Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 60 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes In Louisiana, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure There are two types of judicial foreclosure proceedings in Louisiana, executory and ordinary process.

The executory process takes place when the lender uses a mortgage that includes an "authentic act that imparts a confession of judgment", as provided in the Louisiana statutes. Essentially, this means the borrower signed and acknowledged the obligations of the mortgage in the presence of a notary public and two witnesses. This type of mortgage makes the foreclosure process easier for the lender because once the suit has been filed and the original note and a certified copy of the mortgage has been provided, the court will issue an order for the process to begin.

Once ordered, the borrower must be then be served with a demand for the delinquent payments. The borrower has three (3) days to provide the delinquent payments or the court will order a writ of seizure and sale and the property will be sold after proper notice has been advertised for thirty (30) days.

Lenders may also sue to obtain a deficiency judgment, but buyers have no rights of redemption.

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Maine Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 90 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Maine, lenders may foreclose on mortgages in default by using either a judicial or strict foreclosure process.

Judicial Foreclosure Although Maine allows lenders to pursue foreclosure by judicial methods, which involves filing a lawsuit to obtain a court order to foreclose, it is only used in special circumstances. The primary method of foreclosure in Maine is strict foreclosure.

Strict Foreclosure The strict foreclosure process is based on Maine's foreclosure doctrine in which the lender owns the property until the mortgage has been paid in full. If the borrower breaks any of the conditions established in the mortgage prior to the time the loan is paid in full, he or she will lose any right to the property and the lender will either take possession of the property or arrange for it's sale.

In either case, the borrower has either a three (3) month (post-1975 mortgages) or a twelve (12) month (pre-1975 mortgages) redemption period. If the lender has taken possession of the property, they must hold possession of it for the entire redemption period to finalize the foreclosure. If the lender chooses to sell the property without taking possession of it first, they must file an initial suit and then wait until the redemption period has passed to sell the property by special procedures set forth by the court.

The lender may file a for a deficiency judgment, but it is limited to the difference between the fair market value, as determined by an appraisal, and the balance of the loan in default.

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Maryland Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes, with restrictions - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes In Maryland, lenders may foreclose on a mortgage or deed of trust in default using either the judicial, assent to decree, or non-judicial foreclosure process.

Judicial Foreclosure In cases where the security instrument contains neither a power of sale nor an assent to a decree, a lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. The court will then determine whether a default has occurred.

If the court finds that a default has occurred it shall: 1) fix the amount of the debt, interest, and costs then due; and 2) provide a reasonable time within which payment may be made. The court may order that if payment is not made within the time fixed in the order, the property must be sold to satisfy the debt.

Assent To Decree Foreclosure Assent to a decree foreclosure is used when a provision in the security document declares an assent to the entry of an order for the sale of the property upon a specified default. Lenders who use the assent to decree foreclosure must file a complaint to foreclose. However, it is not necessary for a hearing to be held prior to the foreclosure sale.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.

Despite the permission given in the power of sale clause, lenders in Maryland must still file an order to docket before foreclosure proceedings can begin. However, it is not necessary for a hearing to be held prior to the foreclosure sale.

Foreclosure Guidelines Unless otherwise stated in the original loan document or ordered by the court, the following guidelines must be adhered to in any foreclosure proceedings:

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1. A notice of sale must be published in a newspaper of general circulation in the county where the property resides at least once a week for three (3) successive weeks, with the first publication to be not less than fifteen (15) days prior to sale and the last publication to be not more than one week prior to sale. The notice of sale must also be sent by certified and by registered mail, not more than thirty (30) days and not less than ten (10) days before the date of the sale, to the borrower at their last known address.

2. The sale must be conducted by the person authorized to make the sale (i.e. trustee, sheriff) and may take place immediately outside the courthouse entrance, on the property itself or the location advertised in the notice of sale, if different. The terms of the sale vary by process.

3. If the sale is postponed, notice of the new date of sale shall be published in the manner the original notice of sale was given.

4. Within thirty (30) days after the sale, the person authorized to make the sale must file a complete report of the sale with the court. The clerk of the court will then issue a notice containing a brief description to identify the property and stating that the sale will be ratified unless cause to the contrary is shown within 30 days after the date of the notice. A copy of the notice shall be published at least once a week in each of three successive weeks before the expiration of the 30day period in one or more newspapers of general circulation in the county in which the report of sale was filed.

5. Lenders have a period of three (3) years to file for a deficiency judgment, but it is limited to the balance of the loan in default after the foreclosure sale proceeds have been applied.

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Massachusetts Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: No - Deficiency Judgments Allowed: No In Massachusetts, lenders may foreclose on deeds of trusts or mortgages in default using either an entry by possession or non-judicial foreclosure process.

Foreclosure by Possession After the borrower defaults on the mortgage, the lender may recover possession of the property by: 1) obtaining a court order; 2) entering the property peaceably; and 3) by proper consent of the buyer. If the lender maintains possession peaceably for three years from the date of possession, the borrower loses all rights of redemption.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the foreclosure may proceed as follows: A notice of sale must be recorded in the county where the property is located. The notice must also: 1) be sent, by registered mail, to the borrower at his last known address at least fourteen (14) days prior to the foreclosure sale; 2) published once a week for three (3) weeks, with the first publication being at least twenty one (21) days before the sale, in a newspaper of general circulation within the county where the property is located.

Said notice must contain the place, time and date of the foreclosure hearing, the date the mortgage was recorded, the borrowers name, the amount of the default and the terms of the sale.

The sale must be conducted at public auction on the date, time and place specified in the notice of sale.

The property will be sold to the highest bidder.

The borrower has no rights of redemption.

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Michigan Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Varies In Michigan, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure In judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, then the court will issue a notice of sale.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: 1. A notice of sale must be published once a week for four (4) in a newspaper of general circulation in the county where the property is located. The notice must also be posted on the property at least fifteen (15) days after the first notice of sale is published.

2. The notice must contain the borrower and lenders name, a description of the property, the terms of the sale and the time, place and date of the sale.

3. The sale must be made at public auction to the highest bidder. The trustee or the sheriff of the county, if different, may conduct the sale between the hours of 9:00 am and 4:00 pm on the date specified in the notice of sale.

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4. The sale may be postponed by posting a notice at the time and place where the sale was to originally be held. If the postponement is for more than one week, it must also be published in the manner as the original notice of sale was given.

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Minnesota Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Minnesota, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, in Minnesota, a non-judicial foreclosure may only occur if: 1) no lawsuit to collect the on the mortgage is already underway; 2) the mortgage and any assignments of the mortgage to new lenders have been recorded; and 3) a notice has been given eight (8) weeks before the foreclosure on a homestead.

If all of these conditions have been met, then the foreclosure may proceed as follows: 1. A notice of sale, containing the borrower and lender(s) name, the original loan amount and current amount of default, the date of the mortgage, a description of the property and the time, place and date of the foreclosure sale, must be recorded in the county where the property resides.

2. The sheriff of the county in which the property is located must conduct the sale on the date specified in the notice of sale. At some point during the sale, the sheriff must read an itemized statement, which has been filed by the lender, of the amount due at the time of the sale. The

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property is sold to the highest bidder, who will receive certificate of sale.

3. Lenders may pursue a deficiency judgment, but it is limited to the amount of the fair marker value of the property and the unpaid balance of the original loan. Borrowers have up to one (1) year to redeem the property by paying the past due amount on the loan.

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Mississippi Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: No - Deficiency Judgments Allowed: No In Mississippi, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: 1. The trustee must record a notice of sale containing, at minimum, the borrowers name and the date, time and place of the sale in the county where the property is located. This notice must also be posted at the courthouse door in the county where the property is located and published in a newspaper of general circulation in said county for a period of three (3) consecutive weeks before the schedule date of the sale.

2. The borrower may cure the default and stop the foreclosure process at any time before the foreclosure sale by paying the delinquent payments, plus costs and fees.

3. The sale must be made at public auction for cash to the highest bidder. The sale may be held in the county where the property is located, or, if different, in the county where the borrower resides.

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In either case, the sale must be conducted at the normal location for sheriff's sales within the given county. Borrowers who lose their property as the result of a non-judicial foreclosure have no rights of redemption in Mississippi.

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Missouri Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: Yes - Deficiency Judgments Allowed: No In Missouri, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the foreclosure may proceed as follows:

1. A notice of sale must be mailed the borrower, at his last known address, at least twenty (20) days prior to the scheduled day of sale. The notice of sale must also be published in a newspaper within the county.

2. The sale is conducted by the trustee at public auction for cash to the highest bidder. Anyone may bid, including the lender. If the lender is the winning bidder, the borrower has one year (12 months) to redeem the property.

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Montana Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 150 days - Right of Redemption: No - Deficiency Judgments Allowed: Varies In Montana, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure In judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, then the court will issue a notice of sale.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: A notice of sale must be recorded in the county where the property is located and then: 1) mailed, by registered or certified mail, to the borrower at his last known address at least 120 days before the foreclosure sale; 2) published once a week for three (3) successive weeks in a newspaper of general circulation in the county where the property is located; and 3) posted on the property at least twenty (20) days before the foreclosure sale.

The notice must contain the time, date and place of sale, the borrowers, lenders and trustees name, a description of both the property and the default, and the book and page where the deed is recorded.

The trustee must conduct the sale between the hours of 9:00 am and 4:00 pm at the courthouse in the county where the property is located. The property must be sold at public auction to the highest bidder.

The sale may be postponed for up to fifteen (15) days by posting a notice at the time and place where the sale was originally scheduled.

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Lenders may not obtain a deficiency judgment against the borrower and the borrower has no rights of redemption.

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Nebraska Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 180 days - Right of Redemption: Yes - Deficiency Judgments Allowed: No In Nebraska, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure Generally, in judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, the clerk of the court then advertises the property for sale.

In Nebraska, the court may order the entire property to be sold, or just some part of it. The order of sale may be delayed for up to nine (9) months after the judgment if the borrower files a written request for a delay with the clerk of the court within twenty (20) days after the judgment is rendered. Otherwise, the order commanding the sale of the mortgaged property will be given twenty (20) days after the judgment.

The borrower has the right to cure the default at any time while the suit is still pending by paying the delinquent amount owed on the mortgage, as well as any interest and costs that have accrued. However, the court may still enter a decree of foreclosure and sale, which may be enforced if the buyer goes into default on the mortgage again in the future.

The sheriff must give public notice of the time and place of the sale by: 1) posting the notice on the courthouse door; 2) posting the notice in at least five other public places in the county where the property is located; and 3) by advertising the property for sale once a week for a period of four (4) weeks in a newspaper published in the county where the property is located.

The court must confirm the sale after it takes place and once this is occurs, the borrower has no right of redemption.

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Nevada Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 120 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Nevada, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or nonjudicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

The borrower has one year (12 months) after the foreclosure sale to redeem the property if the judicial foreclosure process is used.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: 1. A copy of the notice of default and election to sell must be mailed certified, return receipt requested, to the borrower, at their last known address, on the date the notice is recorded in the county where the property is located. Any additional postings and advertisements must be done in the same manner as for an execution sale in Nevada.

Beginning on the day after the notice of default and election was recorded with the county and mailed to the borrower, the borrower has anywhere from fifteen (15) to thirty five (35) days to cure the default by paying the delinquent amount on the loan. The actual amount of time given is

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dependent on the date of the original deed of trust.

2. The owner of the property may stop the foreclosure proceedings by filing an "Intent to Cure" with the Public Trustee's office at least fifteen (15) days prior to the foreclosure sale and then paying the necessary amount to bring the loan current by noon the day before the foreclosure sale is scheduled.

3. The foreclosure sale itself will be held at the place, the time and on the date stated in the notice of default and election and must be conducted in the same manner as for an execution sale of real property.

Lenders have three (3) months after the sale to try and obtain a deficiency judgment. Borrowers have no rights of redemption.

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New Hampshire Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Varies by Process; Typically 60 days - Right of Redemption: None - Deficiency Judgments Allowed: Yes In New Hampshire, lenders may foreclose on a mortgage or deed of trust in default by using either the judicial or non-judicial foreclosure processes or any of the following special methods: Entry under Process, Entry and Publication or Possession and Publication.

Judicial Foreclosure In New Hampshire, the judicial process of foreclosure is very similar to that of the strict foreclosure process used in other New England states. The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold. Anyone may bid at the foreclosure sale, including the lender.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out in the following phases: A notice of sale must be recorded in the county where the property is located and then: 1) mailed to the borrower at least twenty-five (25) days before the sale; and 2) published once a week for three (3) weeks, with the first publication appearing not less than twenty (20) days before the sale, in a newspaper of general circulation in the county where the property is located.

The notice should contain the time, date and place of sale, a description of the property and the default, as well as a "warning" to the borrower, informing him the property is going to be sold and what rights he has to stop the procedure.

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The foreclosure sale must be held on the property itself, unless the power of sale clause specifies a different location.

Special Methods of Foreclosure

1. Entry under Process - The lender may foreclose by entering the property under process of law and maintaining actual possession of the property for one year.

2. Entry and Publication - By peaceable entry onto the property and continued, actual, peaceable possession for a period of one year, and by a publishing a notice stating the time of possession, the lender and borrowers name, the date of the mortgage and a description of the property in a newspaper of general circulation in the county where the property is located. The notice must be published for three (3) successive weeks, with the first publication appearing at least six (6) months before the borrowers right to redeem has expired.

3. Possession and Publication - By the lender in possession of the property publishing a notice stating that from and after a certain day, the property will be held for default of the mortgage and the borrowers rights to the property will be foreclosed. Said notice must be published in a newspaper printed in the county where the property is located for three (3) successive weeks and must give the borrower and lenders name, the date of the mortgage, a description of the property and the lenders intention to hold possession of the property for at least one (1) year.

Borrowers have no rights of redemption when any of the three (3) special methods of foreclosure are used.

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New Jersey Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Typically 90 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In New Jersey, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure Generally, in judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, the clerk of the court then advertises the property for sale.

Once the process begins, a foreclosure notice must be: 1) posted in the county office of the county where the property is located; 2) posted on the property in foreclosure; and 3) published in two (2) newspapers in the county. The lender must also notify the borrower at least ten (10) days prior to the foreclosure sale.

It is possible for the lender to obtain a deficiency judgment and borrowers have a right to redemption and/or objection within ten (10) days after the sale.

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New Mexico Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 120 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In New Mexico, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure Generally, in judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, the court then issues a notice of sale.

The notice of sale must contain a legal description of the property and state the place, the time and the date, which must be at least thirty (30) days after the notice of sale is issued, on which the foreclosure sale is to be held. The property will then be sold to the highest bidder on the date specified in the notice.

In most cases, the borrower has up to nine (9) months to redeem the property by paying the amount of the highest bid at the foreclosure sale, plus costs and interest.

Non-judicial foreclosure is only available for commercial and business properties valued at over $500,000.

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New York Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 120 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes In New York , lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold by the sheriff of the county or a referee.

Typically the foreclosure sale is advertised for 4 to 6 weeks. The sale is made by public auction to the highest bidder. Anyone may bid, including the lender.

After the property has been sold, the officer conducting the sale must execute a deed to the purchaser.

The officer must also pay, out of the proceeds, the amount of the debt, including interest and costs, to the lender and then obtain a receipt for the payment from the lender.

Within thirty days after the completing the sale and executing the deed to the purchaser, the officer must file a report of sale, which must include the receipt from the lender, with the clerk of the court. Unless otherwise ordered by the court, the sale can't be confirmed until three months past the filing of the report of sale.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.

Although this type of foreclosure is permitted in New York, it is rarely used by lenders.

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North Carolina Foreclosure Law Summary Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Varies In North Carolina, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, in North Carolina, a preliminary hearing must be held before a power of sale foreclosure can take place.

After the preliminary notices have been issued, the clerk of the court will conduct a hearing to determine whether or not a foreclosure sale may take place. If and when the clerk issues a notice of sale, the foreclosure may proceed as follows:

1. A notice of sale must be: 1) mailed first class mail to the borrower at least twenty (20) days before the sale; 2) published in a newspaper of general circulation in the county where the property is located once a week for two (2) successive weeks, with the last ad being published not less than ten (10) days before the sale; and 3) posted on the courthouse door for twenty (20) days prior to the foreclosure sale.

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2. Said notice must name the borrowers, the lenders, provide a description of the property and state the date, time and place of sale.

3. The sale must be conducted at the courthouse in the county where the property is located between the hours of 10:00 am and 4:00 pm. The property will be sold to the highest bidder.

Upset bids may be filed with the court clerk for a period of ten (10) days after the foreclosure sale.

4. The sale may be postponed by announcing the need to postpone at the time and place the regular sale would have taken place. A notice of the postponement, stating the new date and time the foreclosure sale will be held, must be posted on the courthouse door.

Lenders may pursue a deficiency judgment and borrowers retain the right to redemption.

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North Dakota Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Typically 90 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In North Dakota, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure Generally, in judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, the clerk of the court then advertises the property for sale.

However, in North Dakota, the lender must give the borrower no less than thirty (30) days advance notice of their intent to foreclose. Said notice must be sent registered or certified mail no later than ninety (90) days before the suit is filed and must contain: 1) a description of the real estate; 2) the date and amount of the mortgage; 3) the individual amounts due for principal, interest and taxes paid by the lender; and 4) a statement that a lawsuit will be filed to foreclose if the amount is not paid within thirty (30) days from the date the notice was mailed.

The borrower may stop the foreclosure process by paying the delinquent amount, plus foreclosure costs, prior to the time the sale is confirmed by the court.

All sales in North Dakota must be made by the sheriff or his deputy of the county and in the county where the property is located. The property will be sold to the highest bidder, who will be issued a certificate of sale until the borrowers redemption period has ended. Borrowers typically have a period of one (1) year to redeem the property by paying the balance due on the loan, plus costs, but it may be only six (6) months if the mortgage includes short-term redemption rights.

It is possible to obtain a deficiency judgment against the borrower in North Dakota.

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Ohio Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Typically 150 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Ohio, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure Generally, in judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, the clerk of the court then advertises the property for sale.

At some point prior to the scheduled date of foreclosure, an appraisal of the property must be made by three disinterested freeholders of the county. A copy of the appraised value must be filed with the court clerk and the property must be offered for sale at a price of not less than two-thirds of said value.

The sale may not take place until the notice of sale has been published once a week for three (3) consecutive weeks in a newspaper of general circulation in the county in which the property is located. The sheriff will conduct the sale at the courthouse and the property will be sold to the highest bidder.

Lender's may obtain a deficiency judgment and the borrower may redeem the property at any time before the court confirms the foreclosure sale by paying the amount of the judgment, plus costs and interest.

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Oklahoma Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: None - Deficiency Judgments Allowed: Varies In Oklahoma, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

However, unless the borrower waives the right to an appraisal in the mortgage, the property must be appraised before it can be sold at foreclosure. At the foreclosure sale, the property may not be sold for less than two-thirds of the appraised value.

A lender may sue to obtain a deficiency judgment, but the action must be taken within ninety (90) days after the date of sale. There can be no redemption once the court confirms the foreclosure sale.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: A written notice of intention to foreclose by power of sale must be sent by certified mail to the borrower at the borrower's last known address. The notice must describe the defaults of the borrower under the loan, and give the borrower thirty five (35) days from the date the notice is sent to cure the problem. If the borrower cures the default within the thirty five (35) days, then the foreclosure can be stopped. However, if there have been three (3) defaults, then the lender need not send another notice of intent to foreclose, and if the borrower has been in default four (4) times in the past twenty four (24) months, and has been notified as above, then no further notice will be required.

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1. The notice must be recorded in the county where the property is located within ten (10) days after the borrower has gone through the thirty five (35) day notice period.

2. The notice must appear in a newspaper in the county where the property is located once a day for four (4) consecutive weeks, with the first publishing being not less than thirty (30) days before the sale.

3. Said notice must state the names of the borrower and lender, describe the property (including the street address) and state the time and place of sale.

4. The property must be sold at public auction to the highest bidder at the time and on the date specified in the notice. If the highest bidder at the sale is anyone other than the borrower, they must post cash or certified funds equal to ten (10) percent of the bid amount. If the highest bidder is unable to do so, then the lender may proceed with the sale and accept the next highest bid.

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Oregon Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 180 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Oregon, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or nonjudicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

In this type of foreclosure, the borrower may redeem the property by paying the purchase price, with interest, the foreclosure costs and the purchaser's expenses in operating and maintaining the property within 180 days after the date of sale. The borrower must file a notice no less than two (2) days and not more than thirty (30) with the sheriff to redeem.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. A notice of default must be recorded in the county where the property is located and the borrower and/or occupant of the property must be served with a copy of the notice at least 120 days before the scheduled foreclosure sale date.

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2. A copy of the notice must be published once a week for four (4) successive weeks, with the last notice being published at least twenty (20) days prior to the foreclosure sale.

3. Said notice must contain a property description, recording information on the trust deed, a description of the default, the sum owing on the loan, the lender's election to sell and the date, time and place of sale.

4. The borrower may cure the default at any time prior to foreclosure by paying all past due amounts, plus costs.

5. The sale must be at auction to the highest bidder for cash. Any person, except the trustee, may bid at the sale, which take place between 9:00 am and 4:00 pm at the location stated in the notice of record.

6. The sale may be postponed for up to 180 days from the original sale date if at least twenty (20) days advance notice is given, by mail, to the original recipients of the notice.

A deficiency judgment cannot be obtained through a non-judicial foreclosure, but may be pursued when other foreclosure methods are used.

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Pennsylvania Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Typically 90 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes In Pennsylvania, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure In Pennsylvania, the lender must send a notice of intent to foreclose to the borrower before any foreclosure proceedings may begin.

The notice of intent must be sent, by first class mail, to the borrower, at their last known address and if different, to the property secured by the mortgage. The notice should not be sent until the borrower is at least sixty (60) days behind in their mortgage payments.

In the notice, the lender must make the borrower aware that his or her mortgage is in default and that it is their (the lender's) intention to accelerate the mortgage payments if the borrower does not cure the default within thirty (30) days. This means that the remaining balance of the original mortgage will come due immediately.

If the borrower does not cure the default by paying the past due amount, plus any late charges that have accrued, within the thirty (30) days, the lender may then file a suit to try and obtain a court order to foreclose on the property.

If the court finds in favor of the lender and issues an order of sale, the property will be sold at a Sheriff's sale under the guidelines established by the court. The borrower has the right to cure the default and prevent the sale at any time up to one hour before the Sheriff's foreclosure sale.

Lenders have up to six months after the foreclosure sale to file for a deficiency judgment. Borrowers have no rights of redemption once the foreclosure sale is complete.

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Rhode Island Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: Varies by Process - Deficiency Judgments Allowed: Yes In Rhode Island, lenders may foreclose on deeds of trusts or mortgages in default: 1) by using the judicial foreclosure process; 2) by filing a lawsuit seeking eviction; 3) by taking possession of the house; 4) by the borrower voluntarily giving up possession; or 5) by using the non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Special Procedures In instances where the lender takes possession of the house, they must do so peaceably and in the presence of two witnesses. Said witnesses must give a certificate of possession, which must then be notarized. Additionally, borrowers who voluntarily give up possession of the property must do so in the presence of a notary. In these instances, the lender will obtain the full title to the property if they are able to maintain possession for an established period of time.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

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1. The lender must mail a written notice of the time and place of sale, by certified mail, return receipt requested, to the borrower at his or her last known address, at least twenty (20) days prior to the first publication, including the day of mailing in the computation.

2. The lender must give notice of the sale by publication in some public newspaper at least once a week for three (3) successive weeks before the sale, with the first publication of the notice being at least twenty-one (21) days before the day of sale, including the day of the first publication in the computation.

3. Said notice must contain the names of the borrower and lender, the mortgage date, the amount due, a description of the premises and the time and place of sale.

Any person may bid at the sale, including the lender.

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South Carolina Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instrument: Mortgage - Timeline: Varies - Right of Redemption: No - Deficiency Judgments Allowed: Yes In South Carolina, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold.

In South Carolina, the property is generally sold in the following manner:

1. A notice of sale, containing a description of the property, the time and place of sale, the borrowers name and the lenders name, must be published at the courthouse door and two other public places at least three weeks prior to the date of sale. The notice must also be published in a newspaper of general circulation within the county where the property resides for the same time period.

2. Unless otherwise ordered by the court, the sale must be conducted at the courthouse where the property is located by the sheriff of said county. The sale must be held on the first Monday in each month, unless it is a holiday and then the sale may take place on the following Tuesday.

The sale may begin at 11:00 am and go until 5:00 pm, but the sheriff may close the bidding prior to that time.

3. Despite the fact that the bidding at the public sale has ended, in South Carolina, the auction actually stays open for a full thirty days after the date of the public sale. During this thirty day time period, anyone may place a bid higher than the last bid amount and the successful purchaser will be the one with the highest bid at the end of the thirty days. This ongoing bid process is referred to as upset bidding. Anyone, other than the successful purchaser, who has placed a bid during this time, will be entitled to a refund of any deposit made in good faith and he or she will have no further interest in the property.

4. If no objection to the sale price of the property has been filed with the sheriff's office within three months after the date of sale, the sale will be considered confirmed and the sheriff will make any necessary deed endorsements.

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Lenders in South Carolina may file for a deficiency judgment against the borrower and borrowers have no rights of redemption.

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South Dakota Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: Varies - Deficiency Judgments Allowed: Varies In South Dakota, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. A foreclosure notice must be published once a week for four successive weeks in a newspaper of general circulation in the county where the premises are located.

2. At least twenty-one days prior to the date set for sale, the lender must serve a written copy of the notice of foreclosure sale on the borrower and any lien holder whose interest in the property being foreclosed would be affected by the foreclosure.

3. Said notice must contain the names of the borrower and lender, the mortgage date, the amount due, a description of the premises and the time and place of sale.

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4. The sale must be made by the sheriff of such county, or his deputy, between the hours of 9:00 am and 5:00 pm to the highest bidder. Any person including the mortgagee (lender) may bid at the sale. The winning bidder will receive a certificate of sale.

5. The sale may be postponed, from time to time, by inserting a notice of such postponement, as soon as possible, in the newspaper in which the original advertisement was published, and continuing such publication until the time when the postponed sale occurs.

If the property is 40 acres or less, and the mortgage contains a power of sale clause, then a 180-day period of redemption exists. If the property is abandoned, the time period is reduced to 60 days.

Generally, unless special short-term redemption mortgage provisions apply, borrowers may redeem within one year of the date of sale.

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Tennessee Foreclosure Law Summary Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Tennessee, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. A notice of sale must be published at least three (3) different times in a newspaper published in the county where the sale is to be made, with the first publication appearing at least twenty (20) days prior to the sale.

2. Unless otherwise ordered, if no newspaper is published in said county, the notice of sale must be posted at least thirty (30) days in advance of the sale in at least five (5) public places within the county. At least one of these notices must be placed at the courthouse door and another in the neighborhood of the property itself.

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3. A notice of sale must also be served upon the borrower at least twenty (20) days prior to the date of sale if the borrower is in possession of the property.

4. The sale must be held between the hours of 10:00 am and 4:00 pm for cash to the highest bidder.

The sheriff of each county in the state of Tennessee may set a minimum acceptable price for the property as long as the price is equal to or greater than fifty percent (50%) of the fair market value.

5. The successful bidder at the foreclosure sale will receive a certificate of sale and may be entitled to receive a deed once the borrowers right of redemption has expired.

Deficiency judgments are allowed in Tennessee and the borrower has a period of two (2) years to redeem the property, unless their right of redemption was waived in the original deed of trust.

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Texas Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes In Texas, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or nonjudicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. Prior to proceeding with a foreclosure, Texas laws state that the lender must mail the borrower a letter of demand, informing the buyer he has twenty (20) days to pay the delinquent payments or foreclosure proceedings will begin.

2. At some point after the borrowers twenty (20) days have expired, but at least twenty one (21) days before the foreclosure sale, a foreclosure notice must be: 1) filed with the county clerk; 2) mailed to the borrower at their last known address; and 3) posted on the county courthouse door.

3. The foreclosure sale must take place on the first Tuesday of any month, even if said Tuesday falls on a legal holiday, but only after the proper preliminary notices have been given. The sale is

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on the courthouse steps by auction to the highest bidder for cash. Anyone may bid, including the lender, who bids by canceling out the balance due on the note, or some part of it.

Lenders may obtain deficiency judgments, but they are limited to the difference between the fair market value of the property at the time of sale and the balance of the loan in default.

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Utah Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instrument: Deed of Trust, Mortgage - Timeline: Varies - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Utah, lenders may foreclose on a mortgage in default by using the judicial foreclosure process.

Judicial Foreclosure The judicial foreclosure process is one in which the lender must file a complaint against the borrower and obtain a decree of sale from a court having jurisdiction in the county where the property is located before foreclosure proceedings can begin. Generally, if the court finds the borrower in default, they will give them a set period of time to pay the delinquent amount, plus costs. If the borrower does not pay within the set period of time, the court will then order the property to be sold in the manner of normal execution sales.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. A notice of sale must be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the county where the property is to be sold. The last publication must be at least ten (10) days but not more than thirty (30) days before the date of sale is scheduled.

2. The notice of sale must also be posted, at least twenty (20) days before the date of sale is scheduled, in some conspicuous place on the property to be sold and at the office of the county recorder of each county in which the property is located.

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3. The place of sale must be clearly advertised in the notice of sale and the sale must be held between the hours of 8 am and 5 pm.

4. Borrowers do have a right of redemption in Utah, but the court may extend the redemption time past the time allowed in regular judgments so there is no set length of time.

It is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the original loan and the foreclosure sale price and the lender may be able to seize the property until the differing amount is paid.

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Vermont Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 210 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Vermont, lenders may foreclose on mortgages or deeds of trust in default using the strict or the power of sale foreclosure process.

Strict Foreclosure The strict foreclosure process is based on the premise that the lender owns the property until the mortgage has been paid in full. If the borrower breaks any of the conditions established in the mortgage prior to the time the loan is paid in full, he or she will lose any right to the property and the lender will either take possession of the property or arrange for it's sale. In Vermont, a suit must be filed in the county where the property is located before either of these actions can occur. The borrower will be served a summons to appear before the court and informed of his rights, at which time the lender may move for a summary judgment and avoid the trial altogether.

Regardless, the borrower has either a six (6) month (post-1968 mortgages) or a twelve (12) month (pre1968 mortgages) redemption period.

Power of Sale Foreclosure A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee.

In Vermont, power of sale foreclosures are conducted either judicially or non-judicially, depending on the type of property securing the deed of trust or mortgage.

Judicial Foreclosure In Vermont, lenders who wish to obtain a foreclosure using the power of sale clause in the deed of trust must first file a complaint in a court having jurisdiction in the county where the property is located to try and obtain a decree of sale. This form of foreclosure must be used when the property includes a dwelling of two units or less, with the owner using said property as their principal residence. The sale of this type of property may not be held until seven (7) months after the decree of sale has been issued.

Non-Judicial Foreclosure

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In Vermont, when a power of sale is contained in a mortgage relating to any property except for a dwelling house of two units or less, that is occupied by the owner as a principal residence, or farmland, the lender may exercise the power of sale without first commencing a foreclosure action or obtaining a foreclosure decree.

Power of Sale Guidelines

1. At least thirty (30) days prior to the publication of a notice of sale, a notice of intent to foreclose must be sent to the borrower by registered or certified mail at his or her last known address. The notice of intent must include information on the mortgage to be foreclosed, state the condition breached and the lenders right to accelerate the mortgage, and include the total amount necessary to cure the default. The borrower must also be informed that he or she is entitled to receive a notice of sale at least sixty (60) days prior to the date of sale.

2. The borrower may redeem the property at any time prior to the foreclosure sale by paying the full amount due on the mortgage, plus costs.

3. The sale must be held on the property itself, unless otherwise ordered by the court, and the property must be sold to the highest bidder. Anyone may bid at the sale, including the lender. The borrower is entitled to receive any surplus from the sale, but they may also be sued for deficiency if the sale price is not enough to cover the amount of the mortgage in default.

4. If the property is sold without court action, as in non-judicial foreclosure by power of sale, the notice of sale must include the following language: 5. "The mortgagor is hereby notified that at any time before the foreclosure sale, the mortgagor has a right to petition the superior court for the county in which the mortgaged premises are situated, with service upon the mortgagee, and upon such bond as the court may require, to enjoin the scheduled foreclosure sale. Failure to institute such petition and complete service upon the foreclosing party, or their agent, conducting the sale prior to sale shall thereafter bar any action or right of action of the mortgagor based on the validity of the foreclosure, the right of the mortgage holder to conduct the foreclosure sale, or compliance by the mortgage holder with the notice requirements and other conditions of section 4532 of Title 12. An action to recover damages resulting from the sale of the premises on the date of the sale may be commenced at any time within one year following the date of the sale, but not thereafter."

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Virginia Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: Varies - Deficiency Judgments Allowed: Yes In Virginia, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or nonjudicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

The borrower has two hundred forty (240) days from the date of the sale to redeem the property by paying the amount for which the property was sold, plus six (6) percent interest.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

1. If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. However, additional requirements must be met, as outlined below in section one (1).

Even when the deed of trust makes allowances for advertising the foreclosure sale, Virginia Statutes require ads to be published no less than once a day for three days, which may be consecutive days. These requirements are in addition to the advertising terms stipulated in the deed of trust. If the deed of trust does not provide for advertising, then the ad shall be run once a week for four successive weeks. However, near a city, an ad on five different days, which may be consecutive, will be sufficient.

A copy of the advertisement or a notice with the same information must be mailed to the borrower

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at least 14 days before the foreclosure sale.

2. The foreclosure sale ad must include anything required by the deed of trust and may include a legal description of the property, a street address and a tax map identification or general information about the property's location. The notice must include the time, place and terms of sale. It must give the name of the trustee and the address and phone number of a person who will be able to respond to inquiries about the foreclosure sale.

Any time before the sale, the borrower may cure the default and stop the sale by paying the lien debt, costs and reasonable attorney's fees.

3. The sale, which may be held no earlier than eight (8) days after the first ad is published and no more than thirty (30) days after the last advertisement is published, is to be made at auction to the highest bidder. Any person other than the trustee may bid at the foreclosure sale, including a person who has submitted a written one-price bid. Written one-price bids may be made and shall be received by the trustee for entry by announcement of the trustee at the sale. Any bidder in attendance may inspect written bids. Additionally, the trustee may require bidders to place a cash deposit of up to ten (10) percent of the sale price, unless the dead of trust specifies a higher or lower amount.

In the event of postponement of sale, which may be done at the discretion of the trustee, advertisement of such postponed sale shall be in the same manner as the original advertisement of sale.

4. Once the sale is complete, the proceeds will go to: 1) the expenses of executing the trust; 2) to discharge all taxes, levies, and assessments, with costs and interest if they have priority over the lien of the deed of trust; 3) to discharge in the order of their priority, if any, the remaining debts and obligations secured by the deed, and any liens of record inferior to the deed of trust under which sale is made; 4) any remaining proceeds go to the borrower.

Lenders may obtain deficiency judgments, without limits, in Virginia.

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Washington Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 120 days - Right of Redemption: Yes, but may be precluded.

- Deficiency Judgments Allowed: Yes In Washington, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. The notice of sale must be transmitted both by regular mail and by certified mail, return receipt requested, to the borrower at their last known address, and by regular mail to the attorney of record for the borrower, if any, not less than thirty (30) days prior to the day of sale.

The sheriff must publish a notice of the sale once a week, consecutively, for four (4) weeks, in any daily or weekly legal newspaper of of general circulation published in the county in which the property is located. Additionally, the sheriff must also post the notice in two public places, one of which must be the courthouse door, in the county where the sale is to take place for a period of not less than four weeks prior to the day of sale.

Said notice must contain the time and place of the foreclosure sale, the names of the parties to the deed, the date of the deed, recording information, a property description, the terms of the

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sale, and the borrowers rights (or lack of) redemption.

2. The borrower has up to eleven (11) days before the sale stop the foreclosure process by paying the past due payments, plus expenses, including trustee and attorney fees.

3. The sale must be made by auction between 9:00 am in the morning and 4:00 am in the afternoon at the courthouse door on Friday unless Friday is a legal holiday and then the sale must be held on the next following regular business day. The sale may not be conducted less than 190 days from the date of default and the highest bidder will receive a certificate of sale.

The sheriff may postpone the sale (not exceeding one (1) week next after the day appointed) by giving notice and by posting written notices of the adjournment under the notices of sale originally posted.

Unless redemption rights have been precluded, the borrower may, within eight (8) months after the date of the sale, redeem the property by paying the amount of the highest bid at the foreclosure, plus interest.

If the non-judicial foreclosure process is used by the lender, then it cannot sue for a deficiency judgment.

On judicial foreclosure sales, the borrower can be sued for a deficiency, unless the property is found to be abandoned for six (6) months before the decree of foreclosure.

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Washington DC Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: No - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust - Timeline: Typically 60 days - Right of Redemption: No - Deficiency Judgments Allowed: Yes In Washington D.C., lenders may foreclose on deeds of trusts in default using the non-judicial foreclosure process.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed.

If the terms of the sale are not established in the deed of trust, the lender, or his representative, must obtain a court order specifying the terms of the sale.

However, no foreclosure sale may take place unless the lender gives written notice, by certified mail (return receipt requested), to the borrower at his last known address. This notice must also be sent to the Mayor of the District of Columbia, or his designated agent. Both notices must be sent at least thirty (30) days prior to the sale, with the thirty (30) day period beginning on the day the notice is received by the Mayor. This notice must be given in addition to any notices set forth by the court, the mortgage or the deed of trust.

In Washington D.C., lenders may obtain a deficiency judgment against the borrower for the difference between the foreclosure sale amount and the amount remaining on the original loan. The borrower has no rights of redemption.

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West Virginia Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 60 days - Right of Redemption: No - Deficiency Judgments Allowed: No In West Virginia, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. The notice of sale must be posted on the front door of the courthouse for the county in which the property to be sold is located, and three (3) other public places, one of which must be the property itself, at least twenty (20) days prior to sale. The notice must also be served upon the borrower and subordinate lien holders at least twenty (20) days prior to the foreclosure sale.

Additionally, the notice must be published as a Class III legal advertisement in the county where the property is located once a week for four (4) weeks.

Said notice must contain the time and place of the foreclosure sale, the names of the parties to the deed, the date of the deed, recording information, a property description and the terms of the

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sale.

2. The sale must be held at the time and place stated in the foreclosure notice and completed by public auction to the highest bidder. Unless the deed specifies the terms of sale, the buyer must pay one-third (1/3) of the bid amount in cash at the sale.

Deficiency actions are generally not permitted in West Virginia and there are no rights of redemption.

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Wisconsin Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Wisconsin, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder. However, in Wisconsin, no sale may be made for one year from the date the judgment is entered unless the lender waives the right to a deficiency, in which case the delay is six months, or two months if the property is abandoned. Sales by consent may be earlier.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower preauthorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. The foreclosure notice must be recorded with the county prior to the time the first notice of foreclosure is published. The notice, which must include the time and place of sale, must be published once a week for six consecutive weeks in a newspaper in the county where the property is located.

The notice must be served upon the borrower in the same manner that civil process in a lawsuit is served. In instances where the borrower can't be found, then the notice shall be posted in a

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conspicuous spot on the mortgaged premises and served on any occupant.

Said notice must specify the names of the borrower and lender, the date the mortgage was recorded, the amount due at the date of the notice, a property description and the time and place of sale.

2. The sale must be held at the time and place stated in the foreclosure notice. The winning bidder will receive a certificate of purchase. If necessary, the sale may be postponed.

3. Unless the foreclosure sale has been confirmed by court order, the borrower has one year (12 months) to redeem the property by paying the amount of the highest bid at the foreclosure sale, plus interest.

Wisconsin law allows a foreclosure sale to be confirmed by court order. If the lender states their intentions in the application for sales confirmation, then they may file a deficiency suit. Otherwise, deficiency suits are not allowed.

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Wyoming Foreclosure Law Summary

Quick Facts - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: Yes - Primary Security Instruments: Deed of Trust, Mortgage - Timeline: Typically 90 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Wyoming, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder.

Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

1. Written notice of intent to foreclose the mortgage by advertisement and sale must be served upon the record owner, and the person in possession of the mortgaged premises (if different than the record owner), by certified mail with return receipt, at least ten (10) days before the first publication of notice of sale.

The notice must be published at least once a week for four (4) consecutive weeks in a newspaper printed in the county where the property is located. If there is no newspaper printed in the county, then the notice must be published in a paper printed in the state and of general circulation in said county.

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Said notice must specify the name of the borrower, the lender and the lender's representative, the date of the mortgage and when it was recorded, the amount of the default, a description of the property and the time and place of sale.

2. The sale must be held at the front door of the courthouse of the county in which the premises to be sold, or some part of them, are situated, between the hours of 9:00 am and 5:00 pm, and must be conducted by the person appointed for that purpose in the mortgage or by the sheriff or deputy sheriff of the county. Anyone may bid, including the lender. The highest bidder will receive a certificate of purchase.

Such sale may be postponed from time to time by inserting a notice as soon as possible in the newspaper in which the original advertisement was published and continuing such publication until the time to which the sale shall be postponed, at the expense of the party requesting such postponement.

3. The borrower has three (3) months from the date of sale to redeem the property by paying the amount of the purchase price or the amount given or bid if purchased by the execution creditor or by the mortgagee under a mortgage, together with interest at the rate of ten percent (10%) from the date of sale plus the amount of any assessments or taxes and the amount due on any prior lien which the purchaser paid after the purchase, with interest.

Lenders may obtain deficiency judgments in Wyoming.

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The Valley Solutions Team at Solutions Real Estate www.ShortSalesAreHere.com

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The Valley Solutions Team at Solutions Real Estate www.ShortSalesAreHere.com

About The Co-Authors: Tim and Julie Harris have been leaders since day one of their careers. After selling more than 100 homes in their very first year and every year thereafter. They gained great acclaim when the National Association of Realtors named them Agents of the Year in 1997. They were consistently rated on the NARs lists of top 500 Agents in the US. They were also the youngest and fastest to achieve the Re/Max Platinum award. They are both Howard Brinton StarPower Stars, and have been longtime coaches for the Mike Ferry Organization. Having been involved in thousands of real estate transactions, Tim and Julie have shown their acumen not just for the business itself, but their abilities to impact their coaching clients.

Tim and Julie Harris are unique in the coaching and training field because they have actually done what they teach. In an industry filled with professional ‘speakers’ and ‘gurus’ whom have never sold real estate or haven’t sold real estate in decades Tim and Julie stand out - Matter of fact, they are still involved in the real estate sales industry every day.

Tim and Julie have contributed directly to the success of thousands of real estate professionals nationwide, through 124 |

The Valley Solutions Team at Solutions Real Estate www.ShortSalesAreHere.com

their unique and proven techniques. With over tens of thousands of coaching calls, they are proud to have some of the most successful agents in the country enrolled at The Harris Real Estate University.

Every day, over 11,000 agents participate in a Harris Real Estate University coaching program.

For more information, find Tim and Julie Harris at: www.HarrisRealEstateUniversity.com

or www.TimAndJulieHarris.com

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The Valley Solutions Team at Solutions Real Estate www.ShortSalesAreHere.com