1. | Foreclosure Deals | Contact@ForeclosureDeals.com
The
Beginner’s
Guide to the
Foreclosure
Process
Contents
Introduction……………………… 1
Judicial vs. Non-Judicial
Foreclosure ……………………….2
Judicial Foreclosure
Process……………………………… 2
Non-Judicial Foreclosure
Process …………………………….3
Glossary/Contact info………..4
Foreclosure properties can be an inexpensive
source for that new family home or investment
property, but for first-timers the process can be
daunting. Buying foreclosures is different from
buying other kinds of real estate, so there are a lot
of new things to learn. In this guide, we’ll be going
over the basics of the foreclosure process.
[Volume 1, Issue 1]

2. Judicial vs. Non-Judicial Foreclosure
In the judicial foreclosure process:
2
A judicial foreclosure requires court approval. This
is common in states where a mortgage between the
homeowner and lender is the norm for financing. A
non-judicial foreclosure doesn’t require court
approval. This is common in states where deeds of
trust with a third party, or trustee, are used more
than mortgages. Some states allow for both kinds of
foreclosures.
 The lender hires an attorney to file a lawsuit against
the homeowner once all other methods of receiving
payment on the default have been exhausted.
 In conjunction with the lawsuit, a lis pendens (LIS) is
filed with the county. This notifies the public that a
lawsuit has been filed against the homeowner to
collect the default, which may include foreclosing on
the property.
 It is the burden of the lender to prove that the
homeowner has defaulted on their mortgage. If the
lender is able to sufficiently prove their case, the judge
will sign a Notice of Foreclosure Sale (NFS), giving
permission for a trustee to sell the foreclosed property
at auction.
 Depending on the state, court approval may be
required for a foreclosure sale to be confirmed. If this
is the case, the buyer will usually be required to prove
their ability to pay for the foreclosed property in order
for the sale to be approved. If the buyer is not paying
entirely in cash, they should bring mortgage
documents and/or any other proof that they have
secured financing.

3. In the non-judicial foreclosure process:
2
 The lender issues a Declaration of Default to the
trustee, which authorizes them to file a Notice of
Default (NOD) to the homeowner. This alerts them
that they have defaulted on their loan. The
homeowner is given time to pay back their debt prior
to the sale or arrange a short sale if they do not have
the money to pay the default.
 If no arrangement is made to pay back the loan, the
lender will issue the trustee a Publication Letter.
This signals the start of the Publication Period,
where the trustee is authorized to file a Notice of
Trustee Sale (NTS) to alert the public of the
foreclosure auction. The publication period ends
when the property is sold.
 The homeowner has between the date the NOD was
issued to up to five days before the auction sale to
pay back the debt. This is known as the
Reinstatement Period.
 If the homeowner is able to pay back the loan prior to
the sale, the trustee issues a Recession of Notice of
Default signed by the lender. This removes the
burden of the NOD.
What’s does that mean?
For more terms and definitions,
check out ForeclosureDeals.com’s
glossary page:
http://www.foreclosuredeals.com/G
lossary.php

4. Foreclosure Glossary
2
A foreclosure is the process in which a property that has
been defaulted on by the owner is sold off to satisfy the debt.
There are several ways in which foreclosed homes can be
sold:
 Public Auction: This is the most common type of
foreclosure sale. Depending on state law (see below),
a Notice of Default (NOD) or Lis Pendens (LIS) is
issued to begin the process. This is later followed by
a notice of sale.
 Real Estate Owned (REO): An REO usually occurs
when a foreclosure fails to sell at auction. This is
when the lender that provided the mortgage loan
gains ownership of the property. If the lender is a
large bank with an established REO department, they
may sell these properties themselves. Otherwise,
they may pass them onto real estate brokers or other
third party sellers.
 Government Owned (GOV): GOVs are foreclosed
houses sold by government agencies, such as HUD or
VA. This occurs when a home purchased with a
federally issued loan, such as the VA Vendee
Financing Program, goes into foreclosure. You do not
have to be a veteran or associated with a government
agency to purchase a GOV foreclosure.
 Short Sale: Also known as a pre-foreclosure, a short
sale actually prevents a home from going into
foreclosure. After receiving an NOD or LIS, the
homeowner can try to arrange an agreement with the
lender to sell their home for less than it is worth to
pay off their debt. The lender receives what they’re
owed, and the homeowner prevents a foreclosure on
their credit.
Foreclosure Deals
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Miami, FL 33181
FAX: 1-347-402-6620
Contact@foreclosuredeals.com
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Find us on the Web:
http://www.foreclosuredeals.com/
Now that you know the foreclosure basics and the different
types of foreclosure processes, you can start searching for a
foreclosure of your own. You can read more helpful guides
like this one in the Learning Center at
ForeclosureDeals.com:
http://www.foreclosuredeals.com/learning.html