Every state has a prescribed foreclosure process by which lenders are bound. Knowing the foreclosure laws for your state can help you understand the foreclosure process, and possibly give you a chance to renegotiate your loan and stop the foreclosure.
The foreclosure process in each state will tell you about the notices that are required to be filed, as well as the amount of time you have to respond to each notice. In many states, the foreclosure process includes steps that you can take to delay or stop the foreclosure process at various points. No matter what the state, though, the only way to stop the foreclosure permanently is to make acceptable arrangements to either pay off or reinstate the loan.
The major difference you'll find in the foreclosure process is between states that use mortgages as security for a mortgage loan, and those that use deeds of trust. In a state that uses a mortgage, the foreclosure must be approved by a judge. In those that use deeds of trust, the entire foreclosure process can take place without a judicial review. The difference is mostly a semantic one, though. In either case, the foreclosure process is clearly defined in the laws of the state to explain the process by which a lender can take possession of a property when the loan that it secures is defaulted.
As an example of how the foreclosure process is structured, you can study the foreclosure process in the state of Arizona, which is a deed of trust state.
The foreclosing attorney files the appropriate papers and documentation with the Office of the Public Trustee in the county in which the property is located. After the office of the Public Trustee receives the required documents, the Public Trustee files a Notice of Election and Demand with the Clerk and Recorder of the County. The Public Trustee sets a date of sale that is 45-60 days after the foreclosure is filed. The foreclosure sale date must be published five consecutive weeks in the local newspaper.
The owner of the property may file an Intent to Cure with the office of the Public Trustee up until 15 days before the scheduled sale of the property. The Intent to Cure states that the owner will bring the loan current by 12 noon the day preceding the foreclosure sale.
The foreclosure process also prescribes the process that must be followed in order to complete a foreclosure sale. The lending attorney must file a bid with the Public Trustee within a particular time frame. Once that is done, interested bidders must fill out the appropriate paperwork indicating interest. The bid must be at least $25 over the attorney's opening bid. The funds must be presented to the office of the Public Trustee within a certain time frame. If any of the conditions of the prescribed foreclosure process are not followed, the sale can be indefinitely delayed.
The foreclosure process in other states is similar. By understanding the foreclosure process, and making the appropriate filings and motions, you may be able to hold off the foreclosure until you are able to cure the default and hold onto your property.