The foreclosure process goes through 3 distinct phases
- Pre-foreclosure
- Foreclosure at auction
- Post-foreclosure (the property goes back on the books with the lender. The lender want money not any property.
So in order to making cash at this way, you should to know everything about the foreclosures just before they’re all become a public knowledge. FIRST COME, FIRST SERVE! BE THE FIRST TO LEARN AND ACT!
Non-payment for 2 or 3 months gets the foreclosure ball rolling. Letters start arriving from the bank. Then handed over to an attorney (4 to 6 week period), who will send further letters to the owners suggesting a cure date. Cure date is the latest date problems can be cleared up by before the foreclosure sale.
The earlier in the process you can intervene, the greater your leverage. Leverage means taking a small amount and using it to do big things. You’re saving the owner’s face and credit and getting a good deal in the process. More legwork here, but greater leverage! Keep in mind that you did not create the situation, but you can provide a win/win solution. MY PREFERENCE is to enter into the process before that cure date or after auction (REOs).
There are differing laws and procedures between states, and even between counties in the same state. In general, states differentiate according to the security instrument(s) used to establish financing and legal status. There are two categories of security instruments: 1) mortgage, and 2) deed of trust. Methods of foreclosure where mortgages are the security instruments include judicial, non-judicial, or power of sale, and entry and possession. The method of foreclosure where a deed of trust is the security instrument is almost exclusively power of sale (in Utah, trust deeds are combined with a judicial process).