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The legislation - likely to be enacted soon - devotes $300 billion to helping troubled homeowners avoid foreclosure. See if you qualify. By Les Christie, CNNMoney.com staff writer
Last Updated: July 25, 2008: 10:15 AM EDT

Breaking down the housing rescue

NEW YORK (CNNMoney.com) — The House on Wednesday passed a $300 billion housing rescue bill aimed at helping troubled homeowners avoid foreclosure and supporting mortgage giants Fannie Mae and Freddie Mac.

If the bill is now passed by the Senate and signed by President Bush, who today withdrew his threat to veto it, thousands of at-risk borrowers will be able to refinance their unaffordable old mortgages into new low-cost fixed-rate loans insured by the Federal Housing Administration (FHA).

The Congressional Budget Office estimates that 400,000 borrowers with $68 billion in loans may benefit from the program - but the bill allows for as many as 1 million or 2 million borrowers to participate in the program.

Here’s what homeowners need to know.

Who’s eligible? Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 31% of their gross monthly income on mortgage debt to be eligible for the program.

They can be up to date on their existing mortgage or in default, but either way borrowers must prove that they will not be able to keep paying their existing mortgage - and attest that they are not deliberately defaulting just to obtain lower payments.

Before homeowners can get FHA-backed mortgages, they must first retire any other debt on the home, such as a home equity loan or line of credit. Borrowers are not permitted to take out another home equity loan for at least five years, unless it’s to pay for necessary upkeep on the home.

To get a new home equity loan, borrowers will need approval from the FHA, and total debt cannot exceed 95% of the home’s appraised value at the time.

How can I apply? Borrowers can contact their current mortgage servicer or go directly to an FHA-approved lender for help. These lenders can be found on the Web site of the Department of Housing and Urban Development.

How does the refinancing process work?
This is a voluntary program, so lenders holding the original mortgage have to agree to rework a given loan before things can get started. The bill requires lenders to make major concessions, writing down the value of the loan to 90% of the home’s current value. In areas where prices have plummented by as much as 20%, that will mean a substantial loss for the lender.

But lenders won’t sign off on a workout unless they think that they’ll lose less money on that than they would by allowing a home to go through the costly foreclosure process.

Each loan will have to be underwritten by an FHA lender on a case-by-case basis. That means the banks will do a new appraisal to determine the home’s current value, as well as examine and verify income statements, bank accounts, job histories and credit scores.

Based on that new appraised home value, the FHA lender must determine how much the original lender has to reduce the original mortgage, so that it will reflect 90% of the home’s market value.

If the original lender agrees to the writedown, the new lender buys the old loan and takes over the reworked mortgage.

As part of the deal, the old lender writes off any fees and penalties on the original mortgage, including prepayment penalties, and accepts the proceeds from the new loan on a paid-in-full basis. Additionally, it pays the FHA an up-front premium equal to 3% of the mortgage principal.

What does it cost? There should be little up-front costs for borrowers to bear. Loan origination fees will vary by lender, but these can usually be paid by the borrower over the life of the loan in the form of a slightly higher interest rate.

However, the refinanced loans do come with many strings. For one thing, borrowers are responsible for paying an insurance premium to the FHA guaranteeing the loan, which will be 1.5% of the principal annually.

Borrowers also agree to share any profits from future home-price appreciation with the FHA. To do that, they’ll pay a “3% exit fee” of the mortgage principal to the FHA when they resell or refinance.

Plus, they’ll agree to pay the FHA 100% of any profits they realize from higher home prices if they sell or refinance within a year. So if the original loan principal is $200,000 and the home sells for $250,000, the borrower will owe the FHA $50,000, minus costs.

After a year, borrowers will share 90% of the profits with the FHA. The percentage keeps dropping in 10% increments to 50% after the fifth year, where it stays.

What will I save? Savings depend on what borrowers are paying for their present loan and where they live, but for most people it will be substantial, even after factoring in the FHA fees.

In areas that have sustained huge price drops, such as Sacramento, Calif., where prices have fallen by about 30% over the past year, some loans might be reduced by more than 40%.

Additionally, the FHA loans carry reasonable interest rates, which are fixed for the life of the loan, as opposed to a subprime adjustable-rate mortgage that can jump higher every six months.

 CHICAGO (7/16/08) – A survey of Leading Real Estate Companies of the World® brokers in early July indicates some easing of adverse conditions in the housing market, with 59% of respondents from throughout the country indicating that they are seeing a stronger market in the last 60 days, even after factoring in normal seasonal changes.
 
 Overabundant supply has been one of the hurdles in the market, and nearly 20% of brokers are seeing a decline in inventory from a year ago, which has not been the case in the last several months. While the vast majority (82%) indicates that prices are down in the past year, 75% of those indicated that the decline was less than 10%, and 33% indicated a decline of under 5%.
 
 Interestingly, with all of the focus on foreclosures, only a third said that such properties have had a significant impact on prices in their area, which is consistent with the fact that the majority of foreclosures are occurring in about eight states.
 
 Experiences were mixed in terms of which market segments were the slowest in this environment, with 31% indicating the mid-range “move-up” market, 55% pointing to the high-end market, and 13% saying that the first-time buyer market is the most sluggish.
 
 Respondents were from all areas of the country: Southeast 38%; Northeast 29%; Midwest 17%; Southwest 14%; and Western states 6%.
 
 The Leading Real Estate Companies of the World® (LeadingRE) network is comprised of nearly 700 of the top locally-branded companies in the country, with 5,500 offices and annual homes sales of $370 billion in 2007, more than any national franchise brand. The organization also has members in 38 countries abroad.
 
 “We believe our affiliates represent a good cross-section of the U.S. brokerage community because many of these firms are the market leaders in their areas and encompass a large number of transactions. The findings from this month’s ‘Housing Beat’ survey mirror what others in the industry are reporting – that we are not out of the woods yet, but that inventory is beginning to be absorbed, financing difficulties have eased, sellers are more realistic about pricing and buyers are growing impatient with waiting to purchase their next home.”

Some believe housing recovery is still years away

July 24, 2008 07:55 AM

Where’s the bottom? Are Phoenix, Denver, Sacramento, South Florida and Las Vegas still in a tailspin? Is it time to make a run at a second home you felt you could never afford?

Perhaps we have been too driven and proud of the fact that 70 percent of all families in this country own their homes. In order to get there, lenders, real estate agents and consumers dipped into a “too easy” bucket where the value of ownership sunk to the same level of the cost of getting in the door — zero.

Sadly, greed became confused with privilege. We are now feeling the results of too much credit being offered to poor or borderline borrowers, overeager investors betting on dreams of continued double-digit appreciation, and impassioned move-ups wanting more housing than they could realistically afford.

The housing specialist first to label and predict a “foreclosure tsunami” for several areas of the country now predicts another round of foreclosures by homeowners who can afford to make their payments yet choose to walk away from their homes. When and if they do in any significant volume, it could lead to a housing meltdown.

“Virtually everyone missed the fact that housing appreciation is far more powerful to keep people paying than the legal consequences of default,” said Tom DiMercurio, a veteran of 38 years in the foreclosure business and former president of Fidelity National Asset Management Solutions. “For many folks in different states and different stages in their life, defaulting on their home loan makes economic sense.”

DiMercurio was the brains behind BuyBankHomes, a site that provides foreclosure information to interested parties such as consumers, investors and real estate agents. He also started Denver-based The Mercury Alliance, which offers conventional REO sales, management services, plus Internet auctions, and Paradigm Default Services, an operational platform for lenders and real estate brokers.

A decade of cheap money and incredibly flexible loan programs offered by many lenders sparked overbuilding by lenders, a flip-and-run mindset for speculators, and unrealistic expectations for first-time home buyers blinded by the low payments of a short-term loan. While the equity gained by rising home prices can cover many ill-conceived loan mistakes, a flat or sinking market only compounds problems for lenders and owners.

Credit is now tighter and borrowers are being screened and actually scrutinized for the first time in years. Yet, given the developments of the past 15 months, the key to getting a critical flow back into the housing picture may mean revamping the entire once-conservative loan-qualifying process.

“I also believe, that given the size of the growing number of people that have been and are continuing to be foreclosed, there will be no growth in the number of home buyers/borrowers — unless a foreclosure will be looked upon as a ‘late,’” DiMercurio said. “In order to have any kind of loan growth in the future residential market, something less than even subprime credit must be made satisfactory to lenders. And it won’t be easily substituted with down payment since values are also in the tank.”

Values are not in the tank everywhere, but homes certainly are not rising quickly in value and they are taking longer to sell. Multiple listing service figures that show a drop in new listings must be filtered with the number of would-be sellers not wanting to compete in a slow or flat market.

Some sellers, especially those in some select second-home markets, continue to believe that they are in the driver’s seat. A recent offer on a $739,000 home with three bedrooms and two baths in 1,440 square feet near Lake Tahoe did not even draw a counter from the seller when a potential buyer offered $669,000.

The buyer did his homework and made what he felt to be a generous offer. In seven sales in the immediate area from May 2007 through March 2008, the highest paid was $453 per square foot and the lowest price was approximately $370 per square foot. The buyer truly wanted the home and offered more than the highest price per square foot.

All real estate is regional. Blips and dips in one neighborhood can resemble a flat line just a few blocks away. But a return to a national “feel good” housing atmosphere likely is years away, not months. The components are varied and complex and certainly will not be sorted out this year. How is that even possible anyway when some people believe defaulting on your home loan makes economic sense?

July 24, 2008 10:19 AM

Sales of existing homes fell more sharply than expected in June as the housing industry continued to be bruised by the worst slump in more than two decades.

The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That was more than double the decline that had been expected and left sales 15.5 percent below where they were a year ago.

The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago. That was the fifth largest year-over-year price drop on record.

The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years.

Sales were down in all regions of the country except the West, which posted a 1 percent sales increase. Sales fell by 6.6 percent in the Northeast, 3.4 percent in the Midwest and 3.1 percent in the South.

Analysts said that until the inventory level is reduced to more normal levels, the slump in housing is likely to persist. The inventory level is being driven higher by a massive wave of mortgage foreclosures, however.

Seeking to address the housing crisis, Congress is moving to pass a sweeping package of rescue measures. The plan includes support to keep as many as 400,000 homeowners from losing their homes to foreclosure and a federal lifeline to bolster troubled mortgage giants Fannie Mae and Freddie Mac.

The House passed the bill Wednesday and the Senate is expected to pass the proposal in coming days, sending it to President Bush. The president has dropped a threatened veto over a portion of the bill.

Bankruptcy
A legal recourse that allows a person or business to clear any debt obligations by reorganizing the payment amount and payment schedule of those debt obligations. A bankruptcy stalls the foreclosure process, not allowing a foreclosing lender to proceed with the foreclosure until the bankruptcy proceedings are completed or the court in charge of the bankruptcy allows the lender to continue with the foreclosure.

Deed of Trust
A legal document that dictates the terms of a loan used to buy a property and transfers the ownership of the property to a third party called a trustee until the loan has been paid in full. The trustee can sell the property to recover the remaining loan balance for the lender if the borrower violates the terms of the loan (i.e. does not make monthly payments).

Foreclosure Sale
A process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files the necessary documents to begin the foreclosure proceedings.

Junior Liens
Liens that have a lower priority in terms of their legal claim on a property. The priority is usually determined by the date when the lien was filed. The first lien, or senior lien, against a property is usually the first mortgage or deed of trust recorded when the owner bought the property. Junior liens are typically cleared out a public foreclosure sale, but the purchaser at the sale may be responsible to pay off senior or higher priority liens.

Lien
A legal claim on a property by a lender or other entity that is owed money by the owner of the property. The entity that files the legal claim is called the lien holder. If the owner does not pay off the loan or debt that is owed, the lien holder can take steps to sell or repossess the property to recover the debt owed (foreclosure).

Lis Pendens (LIS)
A publicly recorded notice of a pending lawsuit against a property owner that may affect the ownership of a property. Some states require lenders to file a lis pendens to begin the foreclosure process if a borrower is in default on loan payments.

Mortgage
A document that dictates the terms of a loan used to buy a property and gives the lender some claim to the property (either ownership or a lien) until the loan has been paid in full. The lender can take steps to have the property sold to recover the remaining loan balance if the property purchaser violates the terms of the loan (i.e. does not make monthly payments.)

Notice of Default (NOD):
A publicly recorded notice that a property owner has missed scheduled loan payments for a loan secured by a property. Some states require lenders to record a notice of default to begin the foreclosure process.

Notice of Sale (NTS or NFS):
A document announcing the public sale of a property to recover a debt owed by the owner of the property. The notice is mailed to parties affected by the sale of a property, advertised in local publications and recorded in public records. Among other information, it provides the date, time and location of the sale

Postponement
An announcement – usually made at the time and place of the originally scheduled foreclosure sale – that establishes a new date and time for the sale.

Reinstatement
The stoppage of foreclosure proceedings and return to the original terms of a loan that occurs when an borrower pays off the amount in default on the loan to bring the loan payments current. The borrower’s chance to reinstate ends before the public foreclosure sale in most states.

REO:
A bank owned property that has already been through the trustee sale process and is now ready to purchase direct from the bank. These properties are normally listed with a Realtor, and placed in the Multiple Listing System. Find Bank Owned Properties

Short Sale:
A listing on a property that is being offered for less money than the existing loan balance. The seller and the real estate agent hope to persuade the existing lender to reduce the loan balance to the amount a new buyer has offered for the property.  Many times the seller is already behind in the payments, and there is little time to complete the sale.Most of the time the existing seller has little motivation to comply with the existing lender requirements: Provide a current financial statement, profit and loss statement, two years tax returns, and pay for a new appraisal and provide a copy of the purchase agreement between the seller and the new buyer. From most IDX feeds and metrolistmls.com. To find short sales go to our MLS Listings Page, and click on Short Sales.With so many great bank owned REO properties on the market, there is little need to look at short sales.

Trustee Sale:
The legal sale that is normally held at the courthouse steps, or at a title company. The existing lender will usually bid the existing loan amount, plus existing foreclosure costs.

SACRAMENTO, CA - A new state-backed home loan program could give first-time homebuyers a better chance to crack the market. Gov. Arnold Schwarzenegger unveiled a $200million loan program Monday aimed at helping ease a small part of the foreclosure crisis by helping first-time home buyers purchase foreclosed properties in the eight most heavily affected counties.

Announcing the Community Stabilization Home Loan Program in front of a foreclosed north Stockton house, Gov. Arnold Schwarzenegger said the new effort is no “magic bullet” to solve the foreclosure crisis.

But it will help 800 to 1,000 families - no investors or speculators - step into the American dream by buying foreclosed properties at reduced prices, lower mortgage insurance premiums and lower mortgage interest rates, he said.

“We have taken a number of actions to help prevent foreclosures, but we also want to address the many already foreclosed-on homes that sit vacant in our neighborhoods today,” Schwarzenegger said. “This program will not only make it easier for families to purchase their first home but will also help stabilize neighborhoods that have homes sitting empty. No one single effort can solve our nationwide housing crisis, but together these measures make an important difference in California’s neighborhoods.”

Only certain vacant foreclosed houses in all or part of eight counties will qualify for the loans, to be administered by the California Housing Finance Agency, or CalHFA. That organization was chartered in 1975 as the state’s affordable housing bank to make below-market-rate loans via the sale of tax-exempt bonds.

Loans will be available for CalHFA-listed foreclosure properties throughout San Joaquin, Stanislaus, Merced and Riverside counties, as well as essentially all of Oakland, and certain ZIP codes in Contra Costa, San Bernardino and Los Angeles counties.

Qualifying properties are those owned by four major financial institutions that have agreed to a reduced purchase price to improve affordability. CitiMortgage and its affiliates; Premier Asset Services of Wells Fargo Bank; Fannie Mae; and HomeEq Servicing have agreed to reduce the set purchase prices by 12 percent below the current estimated value.

This hardly means open season on deals for most foreclosure properties. Last month, there were more than 4,500 existing single-family homes on the market in San Joaquin County - most of those as a result of foreclosure.

According to CalHFA, there are 44 foreclosed houses on the San Joaquin County list, but the agency’s marketing director, Ken Giebel, said he expects that number to grow as more financial institutions join the program.

Asked about the relatively small loan program, Schwarzenegger said: “Every marathon starts with the first step. … I think this is a great start.”

The news conference was staged in a quiet, tree-lined neighborhood of modest, zero-lot-line, single-family homes built around Grupe Lake, southwest of Hammer Lane and Interstate 5.

Neighbors on Lighthouse Drive were outnumbered by the crush of media, state government officials and aides, local dignitaries and law enforcement.

Ken Vogel, chairman of the San Joaquin County Board of Supervisors, praised the program as a way to help resuscitate foreclosed properties.

Jon Searles, spokesman for mortgage giant Fannie Mae - formally the Federal National Mortgage Association - said that although the agency is marketing and selling many of its foreclosure properties, it does have “a substantial inventory” of properties it needs to move.

“So this will help first-time home buyers, and it also will help us turn over the properties at the same time.”

The program will be funded through CalHFA with a bond-fund allocation at no cost to the state’s General Fund. Debts of the self-supporting agency are separate from the state’s.

The state projected that 800 to 1,000 families will get loans, based on an average loan balance of $225,000 to $250,000.

Families will get 30-year, fixed-rate loans at rates as much as 1.25 percentage points below current market rates, with reduced premiums on mortgage insurance coverage. For example, a typical mortgage insurance premium for a $250,000 loan would run $2,280 a year, but that would be sliced to $1,475 under the new program.

A program loan can be handled by any mortgage loan office that offers CalHFA financing.

For information about loan offices, a list of foreclosed properties eligible for this program, or information on selling-price limits and income eligibility requirements, go to

www.calhfa.ca.gov. Properties on the list will change weekly.

1 Basing asking price on needs or emotion rather than market value. Many times sellers base their pricing on how much they paid for or invested in their home. This can be an expensive mistake. If your home is not priced competitively, buyers will reject it in favour of other larger homes for the same price. At the same time, the buyers who should be looking at your house will not see it because it is priced over their heads. The result is increased market time, and even when the price is eventually lowered, the buyers are wary because “nobody wants to buy a house that nobody else wants”. The result is low offers and an unwillingness to negotiate. Every seller wants to realize as much money as possible from the sale, but a listing priced too high often eventually sells for less than market value.

2 Failing to “Showcase” the home. A property that is not clean or well maintained is a red flag for the buyer. It is an indication that there may be hidden defects that will result in increased cost of ownership. Sellers who fail to make necessary repairs, who don’t spruce up the house inside and out, and fail to keep it clean and neat, chase away buyers as fast as Realtors can bring them. Buyers are poor judges of the cost of repairs, and always build in a large margin for error when offering on such a property. Sellers are always better off doing the work themselves ahead of time.

3 Over-improving the home prior to selling. Sellers often unwittingly spend thousands of dollars doing the wrong upgrades to their home prior to attempting to sell in the mistaken belief that they will recoup this cost. If you are upgrading your home for your personal enjoyment - fine. But if you are thinking of selling, you should be aware that only certain upgrades are cost effective. Always consult with your Realtor BEFORE committing to upgrading your home.

4 Choosing the wrong Realtor or choosing for the wrong reasons. Many homeowners list with the agent who tells them the highest price. You need to choose an experienced agent with the best marketing plan to sell your home. In the real estate business, an agent with many successfully closed transactions usually costs the same as someone who is inexperienced. That experience could mean a higher price at the negotiating table, selling in less time, and with a minimum amount of hassles.

5 Using the “Hard Sell” during showings. Buying a home is an emotional decision. Buyers like to “try on” a house and see if it is comfortable for them. It is difficult for them to do if you follow them around pointing out every improvement that you made. Good Realtors let the buyers discover the home on their own, pointing out only features they are sure are important to them. Many sales are lost by overselling. If buyers think they are paying for features that are not particularly important to them personally, they will reject the home in favour of a less expensive home without the features.

6 Failing to take the first offer seriously.Often sellers believe that the first offer received will be one of many to come. There is a tendency to not take it seriously, and to hold out for a higher price. This is especially true if the offer comes in soon after the home is placed on the market. Experienced Realtors know that more often than not the first buyer ends up being the best buyer, and many, many sellers have had to accept far less money than the initial offer later in the selling process. The home is most saleable early in the marketing period, and the amount buyers are willing to pay diminishes with the length of time a property has been on the market. Many sellers would give anything to find that prospective buyer who made the first, and ONLY, offer.

7 Not knowing your rights and obligations.The contract you sign to sell your property is a complex and legally binding document. An improperly written contract can allow the purchaser to void the sale, or cost you thousands of unnecessary dollars. Have an experienced Realtor who knows the “ins and outs” fully explain the contract you are about to sign to you, or have your lawyer review it before acceptance.

8 Failure to effectively market the property.Good marketing opens the door that exposes the property to the marketplace. It means distinguishing your home from hundreds of others on the market. It also means selling the benefits, as well as the features. The two most obvious marketing tools (open houses and print advertising) are only moderately effective. Just 1% of homes are sold at open houses, and advertising studies show that only 3% of people purchased their home because they called on a print ad! Agents use these tools to attract future prospects, not to sell the house. The right Realtor will employ a wide variety of marketing activities, emphasizing the ones believed to work best for your home.

Besides physical defects, don’t overlook financing and agent professionalism

Last year, before the subprime crisis hit, a home buyer was on the verge of purchasing his first home. His mortgage broker told him that qualifying for a mortgage would not be a problem.

After reviewing the numbers of an attractive teaser-rate adjustable, the buyer had second thoughts. He called a knowledgeable friend and asked her to review the loan documents with him. After fully understanding how much the loan would ultimately cost, he decided not to go through with the sale.

In the residential real estate business, a red flag refers to a condition affecting a property that might be a material fact that needs further investigation. A material fact is something that would affect the buyers’ decision to buy or the price they would be willing to pay. For example, a hole in the roof is a red flag that the roof might need replacing.

Although red flag is a concept commonly associated with the physical aspects of a property, it’s a valuable notion for home buyers to keep in mind throughout all aspects for their home search and purchase. If more buyers had raised questions about the mortgages they took out during the past several years when lending practices were lax, there would be fewer foreclosures today.

HOUSE HUNTING TIP: Home buying is an exciting experience. It can also be stressful. To ensure a satisfying home-buying experience, resolve to stay actively involved in the process. Commit to being hypervigilant. Watch out for red flags and investigate anything questionable.

Working with an excellent real estate agent will increase your confidence level. However, your agent acts on your behalf and should not make decisions for you. Always remember that you are in the driver’s seat. This applies to sellers as well.

Make sure that you work with quality professionals in your area. If your real estate agent or mortgage person doesn’t return your calls promptly, this could be a red flag this relationship won’t work well for you. Likewise, if your agent keeps showing you properties that don’t match your criteria, you could be in for a frustrating and time-consuming experience.

If you get conflicting information about a property, this could also be a red flag. It might indicate carelessness. Or, it could mean that someone is concealing a material fact. Follow through and find out answers to all your questions. There are no stupid questions when it comes to buying and selling real estate.

It’s a red flag if an inspector you hire to inspect the house you’re buying tells you that he already inspected the property for the seller, but you were never given a copy of the report.

Don’t make any assumptions without following through to verify that they are accurate. For instance, if there’s a downstairs living area with a second kitchen, don’t assume you can rent it to a tenant even if the seller has in the past.

If the property is located in a neighborhood zoned for single-family residences only, renting the downstairs might be a zoning violation. If you’re counting on income from the lower living area, you could find yourself in a house you can’t afford if the zoning regulations are enforced.

Don’t overlook upcoming changes in the neighborhood. For example, the seller should, but might not, tell you that a school is going to be built across the street. If you’re sensitive to noise, this could become a problem for you. Vacant land close to the property is a red flag.

THE CLOSING: Find out what will be built there before making a final decision.

 DEAR Gene: I am one of the unfortunate who has to deal with eventual foreclosure. Can you tell me how long I can remain in my home until legally having to vacate? –Constance

DEAR CONNIE: Before the foreclose takes place, please talk to your lender — and not just a low-level loan officer but someone high in the company. With all the foreclosures taking place throughout the country, lenders (at least the legitimate ones) do not want yet another foreclosure on their books. If no one buys at the foreclosure sale, the lender will be stuck with the house and will have to pay real estate taxes and insurance.

Also, check with your county and state governments. Many governments now have programs to assist borrowers who are in trouble, so you may be able to save your house.

How long do you have to stay in the house if it is foreclosed? Technically, you have to move out when the house is sold. But again, talk with your lender. They may be willing to let you stay for a period of time, if you can pay some rent. Lenders do not want houses to be vacant.

If the home is scheduled for foreclosure, I would attend that sale. Find out who bought it — it may be the lender itself if no one bids. Then discuss your situation with the buyer; once again, you may be able to strike a deal with that buyer.

To my knowledge, although you have to move out, it has been my experience that many homeowners whose property has been foreclosed upon just stay in the house until eviction proceedings are brought, and then they move out.

Judicial	Non-Judicial	Process Period	Sale Publication	Redemption Period	Sale/NTS
Yes	Yes	117 Days	21 Days	365* Days	Trustee
Comments:Judicial Foreclosures are not common

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Pre-foreclosure PeriodCourt foreclosures only occur if a lender desires a deficiency judgment. This process gives a borrower up to one year to redeem the property after the foreclosure sale. It is recommended that the borrower find a way to resolve it, or get some foreclosure assistance. In almost all cases, foreclosures are handled out of court. The process begins when a lender files a notice of default with the county recorder identifying the default amount and the date the borrower must pay off the default. The notice is mailed to the borrower and other affected parties.

Up to five business days before the trustee sale, the borrower may pay off the default plus any applicable costs of foreclosure and stop foreclosure. Three months after the notice of default is filed, the lender can schedule a trustee’s sale of the property.

Notice Of Sale / Auction
 
At least 20 days before the trustee’s sale, the notice of sale must be posted on the property and in one local public location. The notice is also published once a week for three weeks in a local newspaper, starting at least 20 days before the sale date. The notice is mailed to the borrower at least 20 days before the sale and to anyone who requests the notice. The notice must contain the date, time, and location of the sale, the property address, and the trustee’s contact information. In addition, the notice of sale must be recorded with the county recorder at least 14 days before the sale. 

The trustee’s sale is a public auction and the property is sold to the winning bidder. The trustee may require bidders to pay the full bid amount in cash or cashier’s check. Anyone may bid at the sale, including the lender and any junior lien holders. A trustee’s sale may be postponed by announcement at the sale. If a sale is postponed more than three times, a new notice of sale must be issued. 

After the sale is complete, the trustee transfers ownership to the winning bidder. The borrower does not have the right to redeem the property after the sale.

* Judicial Foreclosures Only