Real Estate Ph: (617) 247-1933 581 Boylston Street, Boston MA 02116

Search Massachusetts Foreclosures

Massachusetts Foreclosures: An Overview

Whether you're buying your first home or looking for a great investment property, a foreclosed home is an option that's worth considering. While it's understandable to want to buy a home that's move-in ready, some of the deals you'll get on foreclosed homes in Massachusetts are simply incredible. Even after paying to fix it up, you should still find that you've paid far less than the current market value. If you'll be occupying the home, you should start building equity right away. If you'll be selling it, or flipping it, you should be able to get pretty good bang for your buck.

The Current Foreclosure Market in Massachusetts

The Great Recession may be over - along with the worst of the housing crisis - but that doesn't mean foreclosures are a thing of the past in the Bay State. In fact, there's been a pretty significant uptick in foreclosure activity in Massachusetts of late, and savvy home buyers and investors are making the most of it. While foreclosures are abundant right now, it won't be like that forever. Without acting soon, you could miss out on some truly amazing, once-in-a-lifetime deals. Visit our Boston foreclosures page for more information on the current foreclosure market in Boston.

View foreclosure listings by Boston Neighborhood

When you consider a few statistics, it's plain to see that foreclosures in Massachusetts are hardly disappearing. In October 2014, the number of foreclosures initiated in the state rose for the eighth month in a row for a total of 965. In October 2013, only 504 were initiated, so the rate has nearly doubled in a single year.

Completed foreclosures have also increased in Massachusetts. 387 were completed in October 2013, and 623 were completed in October 2014. That represents a jump of about 9.3 percent, and that's nothing to sneeze at. In a single month, more than 600 foreclosed homes became available. Odds are that a similar number will become available for each month in the foreseeable future, so buyers should be able to take their pick from a very healthy selection of foreclosed homes.

If statistics from a single month aren't enough to impress you, don't worry - there's a lot more where those came from. For instance, during the first 10 months of 2014, around 6,400 foreclosures were initiated in Massachusetts. That's 36.5 percent higher than the same period in 2013. The number of completed foreclosures dipped by only 6.7 percent, so they've been holding fairly steady. In the first 10 months of 2013, there were 3,173 completed foreclosures in the state. During the same period in 2014, there were 2,961. It's plain to see that at any given moment, buyers can browse a large selection of foreclosed Massachusetts homes.

Why are Foreclosures Still Flooding the Market in Massachusetts?

If the Great Recession has run its course and the housing crisis is largely over, why has there been an increase in foreclosure activity in Massachusetts? That's mostly because lenders are finally getting around to clearing up old properties that have been distressed for some time. At the height of the housing crisis, it was all lenders could do to handle the glut of foreclosures and short sales on the market. Not surprisingly, they fell behind a lot. These days, they are playing catch-up. While that's bad news for the people who live in those homes, it's great news for people who are interested in buying Massachusetts foreclosures.

Is it Worth it to Buy a Foreclosure in Massachusetts?

Whether you're looking to buy a home for you and your family or want to scoop up a great investment property, a foreclosure is something you should at least consider. Like many people, you may be unsure about it because you don't want to spend a lot of time fixing it up. That's understandable, but you should know that the money you ultimately save can often far exceed the amount you spend to rehabilitate a distressed property.

Another thing to keep in mind is that you may be eligible for a special loan that doesn't just cover the cost of the mortgage - it covers the cost of repairing and/or modernizing the property too. It's called an FHA 203(k) loan, and special eligibility requirements apply. At the very least, you could look into it to see if you would qualify. The professionals at Boston City Properties understand the nuances of these and similar loan products and can help you investigate the available options through our network of lending institutions.

Tips for Buying a Massachusetts Foreclosure

Regardless of what you plan to do with it, let's say you're ready to buy a foreclosed home somewhere in Massachusetts. First, your timing is impeccable. Currently, the market is fairly flooded with foreclosed properties. That doesn't mean you can just snap up the one you want, though. Competition is incredibly fierce, and available inventory is still far below the heights that were reached during the housing and mortgage crisis. Still, no reasonable real estate agent will advise you not to buy a foreclosure at this juncture. There are still tons of amazing deals out there, and you could save huge amounts of money through the years by acting now.

With all of that being said, it pays to know the basics of buying a foreclosure in Massachusetts. A few of the most important things to keep in mind when doing so include:

Now is the Time to Buy Foreclosures!

There's no telling what the future will bring for Massachusetts foreclosures. No one wants the real estate market to sink back to the depths it fell to back during the housing crisis, and that seems very unlikely to happen. The recent uptick in foreclosures in Massachusetts largely stems from lenders finally clearing them away. In short, these conditions won't last for too long. If you don't act relatively soon, it will be all the more difficult to score a great deal on a distressed home. Boston City Properties works with home buyers, investors and others who are in the market for foreclosed homes in Massachusetts, and we're ready to assist you. Please give us a call today!

What's the Difference Between a Short Sale, Pre-Foreclosure and Foreclosure?

Short sale, pre-foreclosure and foreclosure are all important real estate terms that can help homeowners learn how to navigate the home buying and home ownership process. Each term has a different meaning, and it's important for prospective home buyers to understand how these terms work individually and collectively.

Short Sale

A short sale is a real estate purchase that happens when a property owner owes more money than the market value of his or property. When this happens, the homeowner can ask the bank or lending institution to accept as short-term payoff of the loan.

The appeal of a short sale for many homeowners searching for a house is that they can get a property for a lower rate than the normal asking price. While this may seem like an opportunity to jump on, prospective homeowners should be aware that short sales may carry some risks too. One aspect of short sales that often takes homeowners by surprise is the amount of time that it takes for them to complete. The typical short sale can take up to six months to complete, and it's not uncommon for these sales to take up to a year to become finalized. Another consideration that prospective home buyers may not be aware of is that the home's seller does not have to be in default and have ceased mortgage payments before instituting a short sale request. Lenders may consider a short sale if the home's market price has fallen, even if the seller is still current. For the prospective buyer, this means that the perceived discounted rate that he or she is paying on the home may actually be more representative of the home's actual current worth, and in the end it doesn't amount to much of a discount, if there is even one at all.

Since short sales can carry some risks, prospective homeowners are advised to consult the help of a real estate agent with a background in short sales. An experienced agent can anticipate impending problems and stop them from happening. He or she is also more likely to act with the prospective buyer's best interests in mind. This includes simple steps like ensuring all milestones are met, such as taking care of requisite paperwork. Homeowners can also do a bit of background research beforehand to get a sense of the home's history and find out if they are about to encounter any sort of legal or financial problems in the short sale. One easy and convenient way to do this is by searching through public records. Many local courthouses and town municipal offices have public records available in person or through a web-based portal. Basic public record searches can provide critical information such as whether or not foreclosure notices have previously been filed, and if they have, how much money is owed to the lender. Prospective buyers should pay particular attention to a home with a double mortgage loan, which could create a complicated situation. In the case of two mortgage loans, the first lender is protected against the homeowner's hardship by the second lender. This means that any outstanding mortgage payments must go to both lenders simultaneously, or the home is at risk of foreclosure.

Considering all the risks involved, prospective buyers may still be ready to go through with an attempt to secure the short sale. For those who want to forge ahead, the first step in the process requires qualifying the home and seller for a short sale. Since short sales can be risky and costly for lenders, they will only agree to short sales if certain conditions apply. The first requirement is that sellers have no equity and can't repay the difference between existing loans and the home's sale price. In this case, sellers will give a hardship letter to the lender. In return, lenders may require sellers to pay taxes for the debt amount that is forgiven. At this point in the process, prospective buyers (and their agents) should be on the lookout for any suspicious activity, which can very well take place when desperate homeowners resort to last measures to save their finances. Real estate experts suggest watching out for transactions where sellers offer to give buyers the right to purchase their property for a set amount of money. This is fraudulent behavior, and both seller and buyer can be pursued through legal action for this practice. If the lender does agree to the short sale, prospective buyers can move on to the next step, which involves submitting documentation and an offer or purchase to the lender. Sellers must first accept the offer, and then the listing agent can will the letter to the lender for approval. The final closing deal is contingent upon the lender's acceptance; the deal will fall through and be void without the lender's official nod of approval, even if both parties are willing and ready to go through with the sale. To ensure it is entering into a stable financial situation with the forthcoming homeowner, the lender will need to see adequate legal documentation and proof of financial competence before accepting the sale. This includes a copy of one's income from all sources and proof of employment. The lender has the right, based on this information, to increase the asking price of the home. Lenders will also want to see that incoming homeowners have their own personal home loans and have been pre-approved for a home loan. To prove this, homeowners must send a letter, dated within the past 30 days, of their pre-approval. To expedite the process, prospective homeowners are advised to send the lender a list of comparable sales that help support the price point that they are willing to pay for the new home.

After submitting that information, prospective buyers must be patient, as it can take some time for lenders to respond. However, buyers are allowed to set a time frame for the lender's response. If they fail to respond in that period of time, the transaction can be cancelled. This process gives the lender some time to consider and authorize the request, but it ensures that the request does not fall through the cracks and become obsolete. Lenders have different processes of reviewing and verifying these requests. Some lenders send the approvals to a board or committee for review and verification, which can take a bit longer. Generally, the approval process will be completed in a matter of several weeks or up to three months. Before sending in the letter for approval, the listing agent should make sure that he or she has the requisite contact information for at least one individual at the lending institution, as this helps make sure that the process doesn’t become unnecessarily impeded. Buyers should be aware, however, that they do not have the right to contact anyone at the lending institution before the process is finalized.

As with most real estate purchases, and especially ones that involve the assistance of a real estate agent, homeowners should be aware that there are commissions involved for agents when they are hired to help with a short sale. The seller is responsible for paying commissions from the sale, which may be negotiated with the lender. The lender can negotiate the commission with the broker listing the house, who can then share the commission rate with the hired agent. Sometimes, prospective buyers sign a broker's agreement with the agent. In this case, the buyer should ask if the agent will waive the difference, or if it must be paid with out-of-pocket expenses. This practice might penalize the agent, but it is ultimately the lender's decision to make.

As when going through any process of buying a home, prospective buyers have the right to request an inspection. The risk of buying a house through a short sale is that lenders generally request homeowners to purchase the property as is, without having the privilege of having requisite repairs made first. Because of this sometimes risky condition, it's important for buyers to arrange for home inspections beforehand.

Understanding Mortgages

To understand a short sale, it's important to understand what a mortgage is, as well as its inherent risks and benefits. Mortgages are essentially loans that banks and lending institutions can give homeowners to cover the cost of financing a home. Mortgages provide relief for home buyers, as they can help them afford to buy homes that they might not otherwise be able to finance up-front. Mortgages have four basic components, which are a principal, taxes, insurance and interest. Mortgages are usually paid on a monthly basis. These payments include expenses to cover the principal, which is the initial loan amount borrowed, as well as the interest. Taxes are often included in the mortgage payment as well, and they are calculated based on the value of the home. Taxes fluctuate over time, which means that homeowners may end up spending more or less money on their monthly mortgage payments after making the initial home purchase. The last component of a mortgage payment is mortgage insurance. A mortgage insurance protects the home and property in the event of a catastrophic loss, such as a natural disaster or a flood. Insurances vary depending on company and location. In flood-prone regions, for instance, homeowners may need to purchase flood insurance through an outside agent, such as FEMA. Homeowners' insurance is also an assurance for lenders that their investment in the home will not result in a loss in the event of an accident that destroys the home or property in it. Mortgage insurance payments are usually more common in conventional home loans on down payments of 20 percent or less. This is due to the fact that loans made on lower down payments carry more risk for lenders in the first place.

While mortgages give homeowners the ability to purchase a new home, they also carry some risks and requirements, as do other types of loans. Homeowners should ideally be able to spend 20 percent of the home's value on a down payment. For a home that costs $200,000, for example, homeowners should aim to put a down payment of no less than $20,000 on the house. While some banks and lending institutions will finance a home mortgage as low as a 10 percent down payment, many either don't accept payments that low, or they consider those loans to be riskier than typical mortgage payments and consequently impose a large interest rate. Mortgages also bestow on home owners the obligation to pay back the money in a set period of time. In general, the higher a down payment the homeowner makes on a home (and consequently the less amount of money that he or she borrows from the bank), the lower his or her interest rates will be. To ensure that the homeowner can and will make the requisite monthly payments, lenders require signatures on various legal documents. This legally binding agreement means that the lending institution can take measures to acquire the owed money in the event that the homeowner fails to make the monthly payments on time. The homeowner's failure to make his or her monthly mortgage payments is called a default, and it can result in the imposition of financial penalties. In the most extreme cases, failure to make a mortgage payment on time will result in the home's foreclosure. As with other types of loans, mortgages come in the form of fixed rates and variable rate payments. Fixed mortgage rates mean that the borrower pays the same amount of interest for the entire duration of his or her loan. The monthly principal and interest payments in this case don't change between the first mortgage payment and the last. Most loans that fall into this category have a lifespan of 15 to 30 years. The benefit for homeowners in these long-term mortgages is that they have some predictability in how much they'll have to budget each month to reach the requisite payment limits. While homeowners can't fall behind on their monthly payments, they do have the option of making accelerated payments, which usually come with a ceiling limit. In making accelerated payments, homeowners can reduce the lifetime of their loan. They often end up paying less for the loan using this method, as they pay less in interest over the course of the mortgage's life. Interest rates, which are usually even higher for loans on down payments below 20 percent, can add significant amounts to the homeowner's mortgage rate over the mortgage's lifespan. The other type of mortgage, which carries less predictability, is a variable rate mortgage. In this arrangement, which is called a variable-rate mortgage (or an ARM), homeowners pay a fixed amount for the first term of the mortgage, but then the mortgage payment rates fluctuate with the market interest rate. At first, this arrangement may seem more appealing to homeowners because the initial mortgage rate is usually lower than the going market rate. This can be deceiving because it makes the mortgage appear more affordable (less expensive) than it normally is. Some homeowners enjoy this type of mortgage, as they know that there are some months when they'll be paying lower mortgage rates, which in turn leaves a financial cushion for other expenses. However, the disadvantage is that market interest rates can also rise, sometimes dramatically, which can cause homeowners' monthly expenses to increase sharply. This situation is particularly prevalent during housing bubbles. In housing bubbles, homeowners with this type of mortgage can easily find themselves in financial trouble when they find they are suddenly having trouble paying off their mortgage. Before deciding on the type of mortgage they want to get, homeowners are advised to seek the help of a financial planner or other professional, who can evaluate their current financial situation and make recommendations based on the homeowner's income, lifestyle and personal propensity for risk-taking. People can also use mortgage calculators to evaluate their personal finances and plan for long-term housing expenses. Mortgage calculators are beneficial for giving homeowners an accurate sense of the interest rates that they will be paying for their chosen mortgage over a set period of time. These calculators, which can be found online, help homeowners calculate the cost of the interest during the mortgage's lifespan, which in turn helps them understand how much they can realistically and safely pay on a mortgage each month. The shortest loans average about 10 years, while the longest loans have a lifespan of 30 years or more. The benefit of shorter loans is that they typically carry a lower interest rate than longer-term loans, but they have a higher monthly payment requirement. Longer-term mortgages, in contrast, require a lower principal repayment each month, and usually a lower interest payment as well. The downside of longer-term mortgages is that they often have higher interest rate payments in the end. By the time the mortgage is paid off, people may end up spending thousands more on mortgage interest rates with a longer-term mortgage than with a shorter-term mortgage. Longer-term mortgages may be more appealing to first-time home buyers and those with less financial resources. Short-term mortgages, in contrast, are often used by seasoned home buyers or those who are confident in their ability to make higher monthly payments over the loan's duration. This approach carries more risk for the homeowner, as it means that he or she must maintain the requisite financial resources to avoid falling back on the monthly mortgage payment, which can in turn carry the consequences of financial payments and eventually a home foreclosure.

In addition to primary mortgages, homeowners sometimes take out a second mortgage loan to help finance their home. They are likely to do this when they encounter other life expenses that require them to shift their financial resources to other expenses, such as paying for a long-term illness or a child's college tuition. Second mortgages are called home equity lines of credit, or HELOCs. They give homeowners the financial protection to reallocate their finances without facing the risk of losing their home in the process. As with primary mortgages, second mortgages carry some risks and benefits for both the homeowner and lender. Overall, however, they are viewed negatively by lenders, who consider a homeowner's request for the financial deferment to be a sign that he or she is more likely to encounter financial problems, and in turn be unable to repay the mortgage expenses, further down the road. Second mortgages exist in several forms, including lump sum, line of credit and rate choices. Lump sum payments are one-time, up-front payments that give homeowners a single, one-time payment that lets them use the money for whatever purpose they desire. These loans are paid back over a set period of time, much like a primary mortgage. This repayment is called amortization, and it is the term that refers to a payment comprised of interest and the loan balance. Lump sum payments are usually repaid on a monthly basis. Another type of loan payment is called a line of credit. Line of credit payments operate much in the same way that credit card line of credits too. In this mortgage structure, homeowners can tap into a pool of money that they can use at their will. Unlike lump sum payments, which automatically distribute money to homeowners, people do not have to take out any money at all with a line of credit. Instead, the money is simply there for borrowing if and when they do decide to take it out. People who withdraw money using this method have a maximum borrowing limit – called a ceiling – and they can continue borrowing money until they reach that limit. If the limit is reached, homeowners can either cease to take out any more money or repay the money owed, which automatically resets the rate ceiling back to the original amount. Like primary loans, second mortgages come with the options of making repayments using fixed rates or variable rate structures. Variable rate loans, in contrast to most mortgage loans, are standard for lines of credit.

As with primary mortgages, second mortgages have distinct benefits, but they carry some risks as well. The main advantage of second mortgages is that they allow homeowners the option of borrowing often sizable chunks of money. This makes it possible to pay for other more urgent life expenses. Since loans are secured against the house (called collateral), homeowners have the freedom to borrow more than they would otherwise be able to. The amount that the homeowner can borrow is established by the lender, but the homeowner can typically expect to borrow up to 80 percent of the home's value. Another advantage of second mortgages is that they have lower interest rates than many other types of debt. The one catch to that, however, is that their interest rates are still usually higher than interest rates attached to primary mortgages, since second mortgages are considered riskier endeavors than primary mortgages. While personal loans, such as those on credit cards, may reach double digits, interest rates on second mortgages rarely exceed single digits. The other benefit of second mortgages is that they may come with tax breaks. People who take out second mortgages may receive deductions for interest paid on those mortgages. However, there may be some catches to those tax benefits and deductions, so people with second mortgages are advised to consult a financial professional before making deductions.

As with any loan, second mortgages have possible disadvantages too. The biggest danger with a second mortgage, like a first mortgage, is a home foreclosure. What homeowners might not realize and fully appreciate is that in securing a second mortgage, they are essentially putting their home in harm's way if their financial situation changes for the worst. Homeowners who fail to make mortgage payments will be at risk for the lender issuing a foreclosure, which can cause major problems for the homeowner and his or her family. Because of that risk, homeowners are advised to only use a second mortgage in the case of emergencies instead of superfluous current lifestyle expenses like vacations and leisure. Despite the fact that second mortgages provide homeowners with more money that they can use (more or less an allowance), they can still be expensive. Homeowners may not appreciate the additional, and sometimes embedded, costs that are tacked on to second mortgages, including credit checks, origination fees, appraisals and more.

As with primary mortgages, second mortgage loans are typically used for one of several purposes. Home improvements are the main choice for second loans, as home improvements are usually intended to be an investment in the home's future. When the homeowner maintains the home or makes improvements, it's usually done with the assumption that the improvements will ultimately increase the value of the home. Another reason people get second mortgages is to avoid paying a private mortgage insurance, or a PMI. People may get a second mortgage loan for the purpose of avoiding this sometimes costly insurance payment. However, they should be aware that it might end up being more costly to get that insurance and then cancel it later on. A third reason why people get second mortgages is for debt consolidation. With debt consolidation, people generally get a lower interest rate. The trade-off, however, is that they take the risk of getting unsecured loans as a result. Second lenders generally consider debt consolidation to be risky, which means that they're less likely to provide financing. The worst case scenario with an unsecured loan, as with a mortgage, is that people run the risk of losing their home through foreclosure. Lastly, people sometimes take out second mortgages to help finance a child's education. The consequence with this, as with a mortgage, is that if the expenses of education become too much, they might result in the home's foreclosure. Therefore, parents are advised to look into getting other types of standard student loans first. These loans may also be expensive and have high interest rates, but they won't result in the loss of a person's home if the parents and/or student cannot keep up with the required loan payments.

As with any type of loan, people should do some shopping around and make comparisons before settling on a loan or a lender. Experts advise selecting at least three potential lenders, which may be a bank, a credit union or a mortgage broker. People should also be aware of predatory lenders, and look for telltale signs of a bad loan arrangement. Aspects of troublesome loans include the potential for excessive payments that the homeowner won't be able to cover, voluntary insurance payments that might overlap with existing insurance payments and substantial loan repayment penalties, which prevent homeowners from making high enough payments to end their loan term at an earlier than expected date.


For those who run into trouble making mortgage payments, a house may go into a state of pre-foreclosure. This means that the home has been relinquished by the bank or lending institution. When a home is in a state of pre-foreclosure, it means that the bank or lending institution assumes all responsibility for the home or property, including paying off liens and going through with an eviction, which forces the homeowner to vacate the home against his or her will. Lenders who assume homes in this state may be willing and ready to sell the home on the market, but a home that is in a state of pre-foreclosure is not necessarily immediately up for sale. The term simply means that the home is in the period of time between when a Notice of Default has been issued (in the case of non-legal foreclosure) or when a lis pendens has been issued against the house, as is the case in a more formal, or judicial, legal closure. At this point, the home has been taken and is made available on the foreclosure market.

As with a short sale, homeowners may get a good deal on a home that is in the state of a pre-foreclosure. But, like a short sale, there are certain conditions that prospective buyers should be aware of that might make investing in a pre-foreclosed home more difficult or not worth doing. Potential buyers should take several steps to assess the probability of a pre-foreclosure sale being a good deal. The first step is finding properties in this state. This step can be tricky, as not all pre-foreclosed homes will be on the market yet. In addition to searching online sites, like Zillow, buyers can browse their local newspaper sections for foreclosure notices. Some people also advertise their willingness to buy homes, such as by posting signs like "will pay cash for your house." After finding a home for sale, people should see the property in person by driving by or walking by. An in-person visit can sometimes lead to a conversation with the home's owner or a neighbor. At the very least, it gives people a sense of what kind of condition the house and property are in, and whether or not major repairs might be in order. The next step is to contact a trustee who filed the pre-foreclosure paperwork, or alternatively seek out the help of a local foreclosure professional, who can in turn inform the buyer of the home's pre-foreclosure status changes. Next, people can check public records to figure out the outstanding loan balance and look for any outstanding liens on the home. This can be accomplished by visiting the local town municipal building or hiring local real estate agents to help. If at this point a pre-foreclosure sale still looks promising, prospective buyers can calculate the costs of acquiring the home, which includes factoring costs like insurance, liens and a loan balance. This can be helpful for personal financial calculations and in price negotiations with the current homeowner if the sale reaches that point. The next step should be reaching out to make contact with the current homeowner. It will be helpful for the homeowner to know that a buyer is interested in the house at this point, especially if he or she needs to vacate the premises quickly. Knowing that someone's ready to purchase the property might also make the current owner more willing to settle for a lower sale price. Buyers should be aware, however, that homeowners might also be frazzled and emotionally exhausted at this point, which means that it's important to respect their space and not be too pushy. Once they've established contact with the owners, and ideally developed at least a minimal benchmark of trust, prospective buyers can politely ask to have a tour of the property. It's always a good idea to have a tour, and ideally an inspection, of a house before making a final purchase, as homes are sometimes sold with major issues that buyers won't be able to detect without the help of a professional. If the walk-through checks out okay, it's time to negotiate on a price. Experts recommend negotiating for a price about 20 percent lower than the calculated break-even number. This might involve some creative thinking, such as agreeing to let the current homeowner stay in the house for an extra month or two while he or she makes other living arrangements. After settling on a price, the buyer should create a formal written purchase agreement indicating that he or she is legally acquiring the title to the home. Buyers who don't have the knowledge or experience to complete this step are advised to seek the help of a real estate agent or a real estate attorney. The written agreement should make the home sale transaction contingent upon a complete title search and a professional property inspection, if one has not been done already. The final step is to enlist the help of a third-party company to assist with the transfer of money from one account to another and settling the financial aspects of property ownership.


A foreclosure is the official legal action taken against a homeowner who fails to pay his or her mortgage on time and in full. In the process of a foreclosure, the owner surrenders all of his or her rights to the property. If the owner can't repay his or her debts, or sell the property through a short sale, the home goes up for sale on the foreclosure auction market. If the home fails to sell, the lending institution repossesses it.

Foreclosure laws are established at the state level, which means that there may be some variation in legal proceedings surrounding foreclosures among the states. However, there are five basic steps that the legal foreclosure process takes. The first is that the homeowner must have missed his or her requisite mortgage payments. This is often due to hardships like a death in the family, a divorce or the loss of a job. Occasionally, however, homeowners deliberately fail to make payments. This happens if the cost of the mortgage exceeds the home's value, or if property management becomes too tedious or cumbersome. The next legal step is for the lender to put up a public notice of foreclosure. This usually happens anywhere from three to six months of missed payments. This is called a "Notice of Default" in some states and a "lis pendens" in others. The home then goes into a pre-foreclosure phase, during which time the buyer can work with the lender to make a short sale or pay off outstanding debts. If this doesn't happen, the foreclosure process moves ahead, and the lender posts the home for sale at an auction. Many states grant the homeowner the "right of redemption" during this time, which means that he or she can pay off the debt up until the minute the house is sold. If the house fails to sell at the auction, it is repossessed by the lender and legally titled a bank-owned property or a real estate owned property.

Click Here to Search