Home > Guides > Foreclosure > Foreclosure basics > State foreclosure procedures

State foreclosure procedures

By | Published: Jul 28, 2010 | 31 Comments

The foreclosure process varies somewhat from state to state, and depends primarily on whether the state uses mortgages or deeds of trust for the purchase of real property. Generally, states that use mortgages conduct judicial foreclosures, using the court system to execute the foreclosure. States that use deeds of trust conduct non-judicial foreclosures, using an out-of-court procedure defined by state law.

To foreclose in accordance with the judicial procedure, a lender must prove in court that the mortgagor is in default. Once the lender has exhausted its attempts to resolve the default with the homeowner, the next step is to contact an attorney to pursue court action. The attorney contacts the mortgagor (homeowner) to try to resolve the default. If the mortgagor is unable to pay off the default, the attorney files a lawsuit against the mortgagor to establish the default amount and the right to have the collateral (home) sold and the sale proceeds applied towards the outstanding loan. The purpose of the action is to provide evidence of a default and get the court's approval to initiate foreclosure. In connection with the lawsuit, a lis pendens (lawsuit pending notice) is filed with the county clerk or other public property records repository. The lis pendens gives notice to the public that a pending action has been filed against the borrower in default to collect the defaulted debt, including having the collateral (home) sold.

Non-judicial foreclosures are based on deeds of trust that contain a power-of-sale clause. The clause enables the trustee to initiate a foreclosure sale of the collateral (home), without having to file a lawsuit or go to court. The trustee is typically required to issue a notice of default and notify the trustor (borrower) accordingly about the defaulted loan status. If the trustor does not respond, the trustee then initiates the steps for conducting the foreclosure sale of the collateral (home).

Compare state foreclosure procedures and timelines and review foreclosure laws for specific states.


By Fran Rokicki,  Fri Jan 7 2011, 16:48
Purchasing a home going into foreclosure, or one that is in, foreclosure status, is always risky. There is no history about the condition of the home.
By Racgtc,  Wed Mar 23 2011, 07:54
We worked with a real estate agent that talked us into short selling a rental investment property we'd bailed out of forclosure several times. At the end of the short sale the buyers fell out of escrow, which takes forever with a short sell, and the property was auctioned without notice to us. I've felt robbed since then, never had a forclosure in my life. We could have done a modification. To late now.
By Magdalena Contreras,  Thu Apr 7 2011, 09:15
what happenes if the owner of the house is making arrangements with the mortagage. and the mortgage tell the owner that the foreclosure is on HOLD but the next day the owner calls to see how everything is going and the house si SOLD. Can the owner write a dispute letter to the attorney but the mortgage tells the owner that in Texas dont have a rediction period. but all comments and notes are on the system the mortgage have. comments like

Your case still in final review
your foreclosure is in hold, good news for you
you qualified for modification, not a repayment plan

still the house was sold, whats the owners next step? leave the house?
By Kitten,  Thu Aug 4 2011, 00:58
Realtors are only useful for an "old-fashioned" type of purchase. They only know a couple of options in the real estate market. Brokers may seem like they cost more, but realtors work for brokers. If you can deal with the property owner yourself, or the bank, I suggest you start there with trying to get what info you need in purchasing and making an offer yourself. Anyone can write up a loan. It can be as simple as an IOU you write up for your kids when they want money from future allowance. Don't let anyone make it seem harder than it is. If you feel like you NEED a realtor, then definately have the wrong realtor. Realtors are to make purchasing easier. There are also other professionals who are not exactly reators or brokers. They are companies who are there just to help where you need it. The fees are usually less and the process will be fun and relaxing instead of having to worry about predator companies. Buyers agents should be there for the buyer. If you for a moment feel like they are serving the sellers agent, they may be trying to boost the purchase price because they get paid by a percentage of how much the house sells for (or points).
By Susie Martin,  Fri Jan 6 2012, 09:27
I am a realtor and have helped people buy all kinds of unconventional real estate deals. And you are not correct about the loan process, it is not at all as easy as writing an IOU. I have had dozens of loans. Never easy.
Just choose a recommended realtor. It doesnt matter if they represent the sellers. Sometimes you can get a discount when they do. When you work with a realtor you are covered in so many legal ways, that you are not when you purchase without one.
I used to be an investor and didnt work with realtors in some cases and it always bit me in the butt. It doesnt cost the buyer anything to work with a professional. And anyone in the real estate field in this day and time is going to be working with unconventional real estate deals. Or they are just not working. Most of the sales are foreclosures.
By Brunoja,  Sat Feb 25 2012, 17:05
Well Susie.

I have scouted RE in Florida. I try to study trends in a community and all other logistics..
Obviously I'm looking from out of State. Well.....simple put your information was simple and succinct. Valuable to people like me are from out of state looking for the best deal to retire. Thanks JB
By Kelly Fisher,  Wed Mar 7 2012, 11:44
I'm a realtor as well and will back Susie up on the issue of loans. Underwriters are very thorough these days and that can mean all sorts of unexpected issues. Foreclosures can be a tricky deal regarding the condition of the home but always reserve the right to having the home inspected by a qualified inspector and/or a contractor. The bank may or may not agree to making repairs but you'll know what you're in for with a thorough inspection report in hand and will be able to make a better informed decision on if you want to buy the home. They're a great way, for an informed, prepared buyer, to get into a nice area with automatic equity when it's the right purchase!
And - I'd rather deal with a foreclosure sale than a short sale anytime. A short sale is a moving target and I've had more than one deal fall apart at the very last minute because the second mortgage holder didn't agree to all terms... difficult situation for the first mortgage holder who lost out on regaining any monies, the agents who worked hard to get the deal done and the seller, who had to file bankruptcy. Short sales are hard.
Happy house hunting!
By Bumb Deal,  Sat Mar 24 2012, 07:54
Bank owned Foreclosures can be a real Bumb Deal for the buyer! Banks by law are not required to make any disclosures regarding the condition of the property. Believe me when I say IT IS BUYER BEWARE! A perfect example of this is the REO property located a 2138 Paseo Donito, Alpine, CA 91901. The roof leaks & needs to be replaced & there is mold & water damage on both the first & second floors due to the leaking roof. There are 2 private road maintenance agreements tied to the property. There are a number of access easements across the property. Alpine Fire is owed $4,500.00 for hazard abatement work done by them. None of this was or will be disclosed by the BANK! BUYER BEWARE!
By Wei Liu,  Sun Mar 25 2012, 14:26
Do you need a realtor agent to find foreclosure or short sale houses?
By seamist,  Thu Apr 19 2012, 06:45
What is meant by transfer value on a property owned by the bank?
By matt sullivan,  Tue May 1 2012, 19:41
Good Point That's why we have Home Inspections.
By Foreclosuredefenseattorney,  Mon May 28 2012, 09:30
Homeowners have several legal options both before and after a foreclosure sale has occurred, which can be very successful, avoid a short sale, and allow you to keep the property and lower your payments. I strongly suggest people investigate these options before walking away or falling for a short sale.
By 04peace,  Mon May 28 2012, 17:58
if the property is heir and not yet in the names of the heirs how can it just be refinanced? A reverse mtg was left on da property and last parent died over a year ago
By Matie,  Tue Jun 5 2012, 03:00
I'd rather deal with a foreclosure sale than a short sale anytime. A short sale is a moving target and I've had more than one deal fall apart at the very last minute because the second mortgage holder didn't agree to all terms... difficult situation for the first mortgage holder who lost out on regaining any monies, the agents who worked hard to get the deal done and the seller, who had to file bankruptcy. Short sales are hard.
By Regina McGlashen,  Mon Jul 2 2012, 09:53
Why do realtors keep saying it doesnt cost anything to work with them? The cost varies from state to state and may include anything from 2 percent to 12 percent of the market or sale value of a home. that is not free. if a realtor does not sell your home in the contractual time frame, it may not cost anything.
It is like shopping. You can look at anything you want for free, but if you want to keep it you must pay, so to say it is free is not actual. Look at it this way...if a realtor is professional and experienced, it will cost you because they will get the job done , but if they are not good at their job, their attempts will be a free service to you because they have not accomplished the contractual agreement.
By C,  Fri Aug 24 2012, 22:17
How do you size up a foreclosed property's condition? Is the prospective bidder/buyer allowed to have a look at the property, or is purchased only from sizing up the exterior and an inspector's tour?
By Chris Blackwell,  Sun Nov 25 2012, 23:36
Many of the points you are making are completely incorrect.
1) Realtors stating there is no charge "working" with them are referring to BUYER REPRESENTATION. The seller of a home is the who is paying the "cost" or commission.
2) The cost (sales commission) does not vary from state to state. It is illegal for an office/ state to have a set commission percentage. There are norms in local markets (typically it is 6% in S. FL); however that is often split when home is sold by an outside "cooperating" brokerage firm; whom would then finally split the commission between the listing & selling brokerage firm and the actual designated listing agent and selling agent.
3) The commission paid between LISTING BROKERAGE and OWNER/ SELLER is a percentage that is based of the SALES PRICE of the home. The market value can have no reflection of the sales price in some cases.
4) In some cases homes just don't sell. The agent & seller may mutually agree, the sellers may decide to not sell for whatever reason but some realtors will put a CANCELLATION FEE in the listing agreement to compensate for the work that has been put into the listing, marketing, showing, and etc the home.
5) Many seller's will do their due diligence in interviewing and "shopping" different realtors; in which we would simply discuss listing the home, price, etc. which is smart to do but in NO case whatsoever is hiring a realtor with intentions of entrusting a licensed, professional realtor to sell your home "SHOPPING" them, having them work to keep their stay until it either sells and money is coughed up or it doesn't sell and is either cancelled, expired, etc. If you have absolutely no trust in the individual I advise you to sell by owner, hire an attorney, or both. Your choice of words really are quite sour; insinuating that because a home didn't sell because the realtor wasn't good at their job, so their attempts "WILL" be a free service because the contractual agreement wasn't fulfilled? What you as a seller couldn't meet your ends of the agreement by never making the property available to show, denying showings to certain people, etc. Living like a hoarder & grossly overpricing your home would make for a hard sale on Mr. Realtor as well. Realtors are people too; not superhuman- and they can always 100% without a doubt say NO THANK YOU and "SHOP" you as a customer and not taking your listing, or cancelling it at any time given that it is at will contract. Funny how so many things go unappreciated when a there is money involved.
By Eric Larder,  Fri Jan 25 2013, 22:33
How do you deal with right of redemption in the state of Alabama? Should I worry about this?
By Brian Smith,  Sun Apr 14 2013, 02:28
Short sales can be a good alternative option because a foreclosure is a very expensive process and lenders are interested to save their money. But I think that before buying foreclosed property it’s necessary to turn to an agent or consultant to make sure that you’re making everything properly. I think that it’s always better to discuss important purchases with the professionals to avoid financial mistakes. Foreclosure is a complicated process and it’s necessary to do your best to avoid it. When you take out a mortgage, make sure that you really can afford this house and make payments in time. There’s a lot of hassle with a foreclosure and losing a house you have been paying off for years is always very sad and unpleasant thing.
Brian from http://paydayloansat.com/fast-payday-loans/
By Rubeng167,  Mon Apr 22 2013, 19:32
what address is located this house still on sale or already sold out please someone know please
By Mercedes,  Thu Jun 20 2013, 08:39
I believe this one is sold.
By Amy Pierce,  Sun Jun 30 2013, 17:24
Anyone know anything about rehab loans?
By Aleiaue Ramirez,  Tue Jul 16 2013, 14:01
I have been trying to purchased a home in ocala fl for over a year I finally landed a realtor from home run realty I thought was honest and fair I paid inlanta lenders $350 for a appraisal that did not exist I later contacted the corporate office in Wisconsin explained what the lender had done the corporate apologized and refunded my money home run realty explain to me all realtors have a courtesey turn on utilities accounts to get the home inspected before purchased last minute before inpsection realty drop the bomb in my lap I paid depoisit for electric over the phone I had to leave Gainesville fl to go in person to pay deposit to turn water on I would love to buy a home in ocala fl , but too afraid to go through purchasing and later realty tells me the deal fell through and did not know why between utilities deposits,home inspection and transportation running back and forth was a waste of time and money that could been save toward a safer purchase. I am too afraid to try Ocala fl again,all said and done utilities and inspection $550.00 in the whole. My experience with ocala fl lender and realtor has been a nightmare from elm street
Thank You
Aleiaue Ramirez
By Dawn,  Tue Jul 30 2013, 20:33
Please be aware that it is very difficult to get board approval at 745 east 31st, Brooklyn, NY, especially if the coop is a short sale. Since march of 2012, apt 6k has been listed, gone into contract, reduced in price and re-listed five times because each buyer has been denied board approval. The board drags out the purchasing process, charging non-refundable fees and gives the client a hard time getting their deposit back. it's not worth it. You're better of buying a condo or a coop that does not require board approval.
By Gary Papirov,  Tue Apr 15 2014, 10:17
When a property is in foreclosure, the owner has stopped making payments, and the lender has given the borrower a written Notice of Default that the payments must be brought up to date or the property will be sold off. The notice is a public document (which is why so many websites offer foreclosure lists). It normally takes about two missed payments for a lender to issue a Notice of Default, but not always.

If the owner doesn't respond to the Notice of Default or make the payments needed to reinstate the mortgage, the lender can apply to the courts to take back the title the property so it can then be auctioned off or otherwise disposed of. This doesn't happen right away, though. Each state has a different time period during which the former owners can still rescue the property.

Foreclosure auctions are usually public -- in fact in Reno, NV, foreclosure auctions are still done on the front steps of the Courthouse once a week.
By Mailbag26,  Thu Jul 31 2014, 00:41
I would just like to know why this property is still on this site, if this is 264 Raven Ln, which it looks like it is, I bought this 2 1/2 years ago. Time to remove it.
Cheryl Smith
By Neal Grant,  Fri Aug 15 2014, 05:00
If you are a buyer, you should consider the fact that if you do not hire an agent, you can ask the seller's agent to reduce or eat a portion of his/her fees in order to make a deal happen. Furthermore, a seller's agent is more motivated to sell to an unrepresented buyer because he/she will receive the entire commission. Obviously, if you (buyer) are not knowledgeable about property contracts and transactions, I strongly recommend you hire an agent to assist you.
By williamkar2000,  Fri Jan 2 2015, 03:14
Please can any one help
I am looking for a beach property near ort in C.A , Santa Monica, Venice beach , Newport beach or Laguna beach, under 800000 cash .
I can not get any bank listing or foreclosures listing without some one wants to charg me and get me down again.
thank you
By Mark Saunders,  Thu Feb 5 2015, 09:47
good article
By Bob,  Mon Jan 25 2016, 13:34
Thanks for the post! This is really great information about state foreclosure products.
By Scottdjunkins,  Mon Apr 4 2016, 16:16
I am interested in a 'same street' foreclosure - however this motorcycle gang has been in it squatting since August 2015 and our HOA is either afraid to do anything or has not pursued action. Best of all, the VP lives directly across the street from these gangsters. I and other neighbors continue to complain and meetings and their only answer (property manager as well) says submit video to us. Why are we paying for a lawyer in the HOA when not a single action has been executed in over 4 years? Who ultimately evicts the squatters?

Leave a comment


6/5 guides | View all

Home buyers may be able to get deals on foreclosures, which are often discounted in price, but buying foreclosures can be risky. It's essential to understand the pros and cons of buying a foreclosure before making a purchase. First of all, there are several ...


Got a real estate question? 

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer