Have you ever asked the question, "What is Foreclosure?" To some, the foreclosure information is clearly defined but there is a lot to know when coming to banks foreclosing on a property. Be sure you know.

Foreclosure be defined as a legal process initiated by a lien-holder, usually the lender, to gain ownership of the property as well as the right to sell it and use all proceeds to satisfy the mortgage loan in default. In other words, when you stop paying your mortgage and fail to negotiate your options to either stay in your home or sell it, your home will eventually be repossessed and sold at a foreclosure auction.


Types of Foreclosure

Now that we've answered the question 'What is Foreclosure?' by defining it, we must also be sure you understand there are different types of foreclosure that exist in the U.S. and two are widely used: Foreclosure by Judicial Saleand Foreclosure by Power of Sale. Other foreclosure modes such as "Strict Foreclosure" are less common, but still plausible in a few states.

Foreclosure Information: Security Documents

When a borrower defaults on a loan and such default leads to foreclosure, the step-by-step process and development of the foreclosure event will be determined by the type of security document (loan document) utilized in the state where the property is located. When you purchased your property you either signed a "Deed of Trust" or a "Mortgage Agreement". Although they are both security documents that allow the lender to repossess your property if you default, their foreclosure procedures are actually distinct.

Foreclosure Information: Timelines

In general, the lien-holder initiates the foreclosure process at a predetermined time specified in the mortgage documents. In the past, the foreclosure process would last about six months. However given the recent surge in home foreclosures and all pending mortgage modifications, foreclosures have become much lengthier actions. Lenders are typically the lien-holders engaging in foreclosures, however, other entities can do the same for other debts such as overdue taxes, past-due contractor's bills (Mechanic's lien) or unpaid homeowners' association dues or assessments.

After Foreclosure

Whenever the sale of the foreclosed property results in an amount that is insufficient to completely satisfy the debt and if a "Recourse Clause" is present in the Mortgage Agreement or Deed of Trust, the lender can file a claim for "Deficiency Judgment". Loans said not to contain such clause are called Non-Recourse loans. If a member of the military is one of the owners of a property facing foreclosure, there are additional safeguards required by federal and in some cases, state laws as well.

Home foreclosure is a fearsome and traumatic experience for any homeowner regardless of the circumstances involved. There are some foreclosure options you should consider if you are in default.


Top 10 cities to buy real estate foreclosures:

  • Kansas City, Missouri - Average foreclosure sales price: $73,257
  • Boston, Massachusetts - Average foreclosure sales price: $195,672
  • Pittsburgh, Pennsylvania - Average foreclosure sales price: $73,142
  • Tulsa, Oklahoma - Average foreclosure sales price: $86,725
  • San Francisco, California - Average foreclosure sales price: $307,803
  • Cape Coral-Fort Myers, Florida - Average foreclosure sales price: $102,022
  • Charlotte, North Carolina - Average foreclosure sales price: $118,808
  • Seattle, Washington - Average foreclosure sales price: $212,565
  • Tucson, Arizona - Average foreclosure sales price: $112,660
  • Columbus, Ohio - Average foreclosure sales price: $98,223

The 10 cities with the most homes in foreclosure:

  • Riverside - San Bernardino-Ontario, California - Foreclosure rate: 1 in 213 homes
  • Las Vegas - Paradise, Nevada - Foreclosure rate: 1 in 249 homes
  • Miami - Ft. Lauderdale - Pompano Beach, Florida - Foreclosure rate: 1 in 273 homes
  • Sacramento - Arden - Arcade - Roseville, California -  Foreclosure rate: 1 in 277 homes
  • Atlanta - Sandy Springs - Marietta, Georgia -  Foreclosure rate: 1 in 298 homes
  • Salt Lake City, Utah - Foreclosure rate: 1 in 309 homes
  • Phoenix - Mesa-Scottsdale, Arizona -  Foreclosure rate: 1 in 313 homes
  • Tampa - St. Petersburg - Clearwater, Florida -  Foreclosure rate: 1 in 315 homes
  • Chicago, Illinois - Naperville, Indiana - Joliet, Wisounsin -  Foreclosure rate: 1 in 321 homes
  • Orlando - Kissimmee, Florida  Foreclosure rate: 1 in 347 homes

Top 10 prime home foreclosure markets for first-timer buyers:

  1. Tucson, Ariz.
  2. Reno, NV
  3. St. Louis, MO
  4. Columbia, S.C.
  5. Fresno, Calif. 
  6. Gainesville, GA
  7. Redding, Calif.
  8. Visalia, CA
  9. Las Vegas, NV
  10. Myrtle Beach, S.C.

Markets with the highest rates of foreclosure filings for 2010:

  • Las Vegas-Paradise, Nevada
  • Cape Coral-Fort Myers, Florida
  • Modesto, California
  • Phoenix-Mesa-Scottsdale, Arizona
  • Miami-Fort Lauderdale-Pompano Beach, Florida
  • Riverside-San Bernardino-Ontario, California
  • Stockton, California
  • Merced, California
  • Orlando-Kissimmee, Florida
  • Vallejo-Fairfield, California

Top 10 foreclosure cities Based on inventory:

  • Las Vegas, Nevada -  $9,000,000 (4/4) 3120 sq. ft.
  • Miami, Florida -  $4,000,000 (3/2) 2,264 sq. ft.
  • Chicago, Illinois - $1,200,000 (condo)
  • Phoenix, Arizona - $3,800,000 (3 baths) 1,394 sq. ft.
  • Los Angeles, California -  $13,524,000 (4/4) 3,276 sq. ft.
  • Sacramento, California -  $4,000,001 (single family home)
  • Cape Coral, Florida -  $1,155,000 (3/2) 2,974 sq. ft.
  • Orlando, Florida -  $999,999 (single family home)
  • Tampa, Florida -  $1,567,900 (7/7) 6,257 sq. ft.
  • San Diego, California - $10,250,000 (2/2) 1,420 sq. ft. (condo)

Markets with the lowest rates of real estate foreclosure filings for 2010:

  • Utica-Rome, New York
  • Burlington-South Burlington, Vermont
  • Charleston, West Virginia
  • College Station-Bryan, Texas
  • Syracuse, New York
  • Tuscaloosa, Alabama
  • Lincoln, Nebraska
  • Albany-Schenectady-Troy, New York
  • Buffalo-Niagara Falls, New York
  • Lubbock, Texas

Top 12 cities to buy a foreclosure, based on discount percentages:

  • Palm Bay, Florida – 28% discount
  • Rochester, New York – 25% discount
  • Albany, New York – 35% discount
  • New York, New York – 40% discount
  • Lakeland, Florida – 15% discount
  • Tampa, Florida – 27% discount
  • Jacksonville, Florida – 32% discount
  • Poughkeepsie, New York – 28% discount
  • Orlando, Florida – 19% discount
  • Chicago, Illinois – 46% discount 
  • El Paso, Texas - 22% discount 
  • Miami, Ft. Lauderdale, Pompano Beach, Florida -  31% discount 

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