Photo Scanner: California Foreclosure

Foreclosures is a situation in which a homeowner is unable to make full principal and interest obligations on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as specified in the mortgage agreement. One month after the homeowner misses a home loan payment, he/she is in default and will be notified by the lender. Three to six months after the homeowner does not show for a mortgage payment, presuming the mortgage is still delinquent, and the homeowner has not composed the missed payments in just a particular grace period, the financial institution will start to foreclose. Typically the farther behind the customer falls, the more difficult it becomes to get up since lenders add fees for payments that are 10-15 days past due.

Each state has its own foreclosure laws in the notices the lender must post publicly and/or with the homeowner, the homeowner's choices for bringing the loan current and avoiding property foreclosure, and the procedure for selling the property. In 22 states – including California, Illinois, and Nyc – judicial foreclosure is the norm, meaning the lender must go through the courts to get authorization to foreclose by proving the borrower is delinquent.

If the foreclosure is approved, the local sheriff online auctions the house to the highest bidder to try to recoup what the bank is owed, or the bank becomes the owner and offers the house through the traditional route to recoup its loss. The entire judicial foreclosure process, from the borrower's first, missed repayment through the lender's sale for the home, usually will take 480 to 700 days, based on the Mortgage Bankers Association of America.

The other 28 states – including Arizona, California, Georgia and Texas – mainly use non-judicial foreclosure, also called the power of sale, which tends to be faster and does not go through the courts unless the home owner sues the lender.

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