Actions Leading To A Foreclosure Auction

Foreclosure Auction

This is part one of a five part series explaining everything you ever wanted to know about foreclosure auctions  and how to proceed with finding and purchasing one.

Before we get into purchasing a foreclosure auction it may be wise to have a little background information on the few things that have to happen before a house is available for purchase as foreclosure.
Though there are several situations that can lead to a foreclosure auction the most common cause occurs when the mortgagee has stopped making their mortgage payments.  Generally at this point the mortgage company will send a letter to the mortgagee advising them that if the payments aren’t made to bring the mortgage current, then they will sell the property to the highest bidder.
Although not as common, a house can also be foreclosed on because of the failure to pay overdue taxes, for unpaid contractors’ fees, also for unpaid Home Owners Association fees.
In the case of a foreclosure due to an unpaid mortgage if these payments are made by the mortgagee then of course all is well and the mortgagee will keep their house.  Sometimes, especially in these trying times, with the economy being bad lender’s have been more willing to agree to more lenient payment arrangement terms with the mortgagee.  However if this agreement is not kept, and past due fees are not settled then the lender will proceed further with the foreclosure.
The time frame from when a mortgagee becomes default and when the home actually goes to the auction will vary from state to state.  This is mainly determined by whether or not the state practices judicial or non-judicial foreclosures.  In breadth, in a judicial foreclosure you have the right to a hearing in a non-judicial you do not.   Therefore, if you are in a state with a judicial foreclosure the time before a house is sent to a foreclosure auction is usually a little longer because the mortgagee has the right to dispute the legitimacy of the claim.
Now that I’ve given you a little background history of the steps leading to a foreclosure auction be sure to meet on my next post where we will discuss how to find these homes before they make it to the foreclosure auction.  Having your research done prior to attending the auction will on make you that much more prepared to invest in foreclosures.