In most states for a lender to file a foreclosure, the homeowner must fall ninety days behind on his mortgage payments.\u00a0<\/p>

If you have missed less than three payments, you are not entering into a foreclosure process.\u00a0<\/p>

This phase is very important as you have to go through it before the foreclosure process can start and this is the phase where the homeowners have the most options at their disposal.\u00a0<\/p>

If you are in the missed payment phase, this is the best time to rearrange your finances, call your lender to work out alternate options, and put your home on the market for sale.<\/p>

The second step in the process is called pre-foreclosure. Once the homeowner misses the payments for over ninety days, the lender records a public notice that the homeowner has defaulted on the mortgage payments and the notice is mailed to the homeowner.\u00a0<\/p>

In some states, this notice is called a notice of default in other states it is called lease pendants.\u00a0<\/p>

Depending on the guidelines in your state, the lender might be required to post the notice on your front door.\u00a0<\/p>

This phase is a grace period where the homeowner gets up to three months to clear the default. During this period, the homeowner can sell the home, come up with the cash for the defaulted amount or make some arrangement with the lender.<\/p>

In the third step of the process, the property will be auctioned if the default is not cleared within three months after the notice of default was issued.\u00a0<\/p>

The lender or their representatives are known as foreclosure trustees sets a date for the property to be sold through an auction called a trustee sale. The notice of trustee sales is recorded in the county recorder\u2019s office, delivered to the homeowner, posted on the door of the property, and published in the local newspaper to ensure the date, time, and place of the auction is known to everyone.\u00a0<\/p>

This auction is either held in a county courthouse or the trustee\u2019s office. In many states, the homeowners have the right to redemption by paying the outstanding amount and stopping the foreclosure process up to the moment the property is sold at the auction.\u00a0<\/p>

At the auction the home is sold to the highest bidder, however, in most states, these auctions require cash payments.\u00a0<\/p>

Hence, it is difficult for buyers coming for auction to bring such a huge amount of cash, and many times the property remains unsold.\u00a0<\/p>

This leads the lenders to make an agreement with the homeowners to take the property back in what\u2019s called a deed in lieu of foreclosure.<\/p>

The fourth stage is where the property remains unsold at the auction, the lender takes ownership of it. The property is considered bank-owned property or Real Estate Owned By Lender (REO).\u00a0<\/p>

REOs are mostly listed with a local realtor for sale on the open market. Some lenders may sell the REOs at REO liquidation auction and recover their money.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t