Recent reports have shown that the foreclosure rate has fallen to levels not seen since 2007. Just last week the real estate data corporation Realty Trac Inc. The report claimed that there are just 1.2 million properties in some form of foreclosure. And the fewer foreclosures, the fewer opportunities thejudicial non judicial foreclosures casual real estate investor will have to acquire real estate at below market prices poised for the foreclosure process.

 

The timing of a foreclosure is really up to whoever services the loan. There are indeed specific legal guidelines that lenders must follow before a foreclosure can take place and while state laws will vary on certain facets of the foreclosure process, there is still a standard protocol in place leading up to an ultimate foreclosure filing.

Most states require a lender to send, by certified letter, an initial notice of default when the borrower misses two consecutive payments. The letter contains information regarding the past due amount, penalties and interest needed to bring the loan current and avoid a foreclosure filing. Many real estate investors research notices of default instead foreclosure filings as the notice is issued at least 30 days prior to a foreclosure. When the borrower misses three payments in a row, then a foreclosure filing is permitted. Yet depending upon where the property is located, the foreclosure may be a “judicial” or “non-judicial” foreclosure and will impact the time it takes to foreclose on a home.

A judicial foreclosure means the lender must file suit against the borrower and appear in court before a judge. Getting on the docket, requesting historical information and preparing for the lawsuit can take months or even years before a borrower ever faces the literal possibility of having the home taken away.

A non-judicial foreclosure state means just the opposite—there is no need for a judge or a courtroom hearing. The lender follows the proper protocol, issues the certified letters and required public filings and a foreclosure can take place within 60 days in some areas. That tells real estate investors that non-judicial states have gone through much of their distressed properties some time ago and the judicial foreclosure states are just now beginning to lighten the foreclosure mode.