Should I Short Sale my Western MA Home? Part Two E-book

Chapter Six

What are the Options For Homeowners Facing Foreclosure?

1. Try to “make nice” with your lender. You can call your lender and ask them to reinstate the loan. You may be allowed to reinstate or make the loan current by paying a lump sum or making scheduled payments to your lender over a given amount of time. Just explain to them you had a few bad months and things are now better and most lenders will try to work something out with you.

2. IF you have equity, refinance. Usually the lender would refinance the existing loan and include as part of the new loan any late payments, and fees that you would need to regain control. It would all be “wrapped” into one mortgage.

3. Assuming you have no equity and have to sell, you can list your home with a Realtor who has been trained how to do short sales. Almost always your best option.

4. You can give the property back to the lender. If there are no other liens on the title, the lender may agree to take the property back. This process of transferring ownership from you to the lender under these circumstances is called a Deed in Lieu of Foreclosure, and is sometimes referred to as a “friendly foreclosure” because in essence that what it is. You just walk away. You must discuss this with your lender.

5. You can file bankruptcy. First, you need to seek the advice of a attorney. In no way are we trying to provide legal advice. Only an attorney can give legal advice. The two most common “chapters” of bankruptcy are Chapter 7 and Chapter 13.

Bankruptcies are “work out” others are “wipe out”. Chapter 7 is the “wipe out” and Chapter 13 is the “work out”. Bankruptcy is a federal court action designed to help individuals repay their debts or eliminate their debts depending on their circumstances. Chapter 13 bankruptcies are designed to reorganize debts in an effort to repay all debt. Chapter 7 bankruptcies are geared more towards liquidation of assets. Both Chapter 7 and Chapter 13 immediately stop the foreclosure process and any creditors from taking further action against you.

Chapter 7 Bankruptcy

When someone files a Chapter 7 bankruptcy, all assets are frozen. The attorney creates what is called an automatic stay. Meaning everything “Stays” put. The homeowners can’t buy anything, they can’t sell anything, and they can’t even give away anything. If they try to sell their home, they couldn’t. If they try to give away money in savings, they can’t. Any unsecured debt like credit cards, unsecured loans, etc. are eliminated or wiped out. They do not exist anymore. Then the trustee or attorney who represents the court and the creditors will look at all the assets (house, car, furniture, equipment) anything of value and decide what must be liquidated to pay some of the debt that was wiped out.

If the homeowners are in the middle of foreclosure, a Chapter 7 will stop the foreclosure process. Usually banks will then ask the trustee to release the property from the automatic stay so they may continue with the foreclosure process. Once the property has been released from the bankruptcy, the foreclosure process starts right where it left off. Typically you have anywhere from 3-5 weeks until the foreclosure process begins again.

Chapter 13 Bankruptcy

When someone files a Chapter 13, they don’t take all the assets and sell them. Instead they take all the monthly payments and discount them for pennies on the dollar. It’s like a debt consolidation plan. Whatever amount is agreed upon has to be paid to the bankruptcy count every month for the next 3-5 years. So the homeowners get to keep their house, their cars, and all their assets. Now, as long as the homeowner stays current with the mortgage payments and pays the amount agreed upon, they will be fine. However, if any payments are missed, the trustee will dismiss the bankruptcy and the foreclosure process will begin again.

6. And finally, you can just let it go to foreclosure. Basically you don’t do anything. You leave with nothing in hand and a foreclosure on your credit

report. This is without question the worst option of all.

Another solution available is the Soldier Relief Act of 1940. When a property is owned by a person in the military and the mortgage payments are not made, then this relief act may stop foreclosure based on certain criteria. The person has to be in active duty in order to qualify. The mortgage loan had to be established before the soldier was called out to active duty. Not only will this stop foreclosure, but it will stop seizure of any personal property while the soldier is actively serving and several months thereafter.

Chapter Seven

You Now Want To Do A Short Sale. Top 10 Seller Short Sale Questions, Answered.

Number 10

I can’t make my house payments but I do have an ability to pay back all or part of the negative equity. Also, I want to preserve my credit score…is a short sale right for me?

Probably not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder) it makes sense for them to work out a repayment plan. The lender will then release the lien and allow the home to close.

Number 9

If I pay mortgage insurance and default on my loan, wouldn’t that cover the deficiency amount?

The mortgage insurance is not there for your protection, it protects the mortgage lender.

Number 8

Do I have to have my home ‘Approved’ by my lender prior to offering it for sale as a short sale?

No. Technically speaking, there is no such thing as being ‘Short Sale Approved’. The actual approval only happens with an accepted offer.

Number 7

I just missed a payment and I know I will miss more….how long does the foreclosure process take and is there time to do a short sale?

The foreclosure process takes differing times depending on your state. In the Midwest a foreclosure can take over a year. In California it’s taking 6+ months. Generally speaking a well-priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days.

Number 6

Will I still have to pay property taxes if I do a short sale?

Property taxes will always have to be paid as part of any accepted short sale. Whether it’s you or the lender depends on their policies and the specific agreement you reach while negotiating the short sale.

Number 5

I owe more than my home is worth and I can’t make the payment, do I have to somehow qualify for a short sale?

The simple answer is NO. If someone can’t make their payment and they are otherwise insolvent they qualify for a short sale. Note: insolvent simply means their total debts are great than their assets.

Number 4

Do I have to pay income taxes? I have heard that I will get a 1099. Will the loss the bank takes be treated as a taxable gain to me..the seller..is this true?!

It WAS true, now it’s not. Consult your Tax Attorney or Qualified CPA. Very recently the tax law was modified and now most people who do a short sale will have no taxes due.

Number 3

How do you, my listing agent get paid? Who pays your commission?

The bank will pay the commission along with all the other usual closing costs.

Number 2

Do I have to miss a payment to do a Short Sale?

No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.

Number 1

I want to do a short sale and have a 2nd mortgage, does this make me ineligible?

No. Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender. Most short sales do involve 1st and 2nd lien holder.

Chapter Eight

But, I Thought Rates Were Falling. Won’t That Help Me?

The Federal Reserve has been lowering rates to bail out the economy. Does this mean that that mortgage rates will fall?

In some cases yes in most cases no…read on.

Let’s start with the 30-year fixed rate mortgage. The 30-year fixed rate mortgage is not tied to short-term treasuries. Fixed mortgage rates are tied to long-term bond yields that move based on the outlook for the economy and inflation. True, even as the Fed has lowered rates, the 30-year fixed has come down, but that’s because of the outlook for slower economic growth in the months ahead. While the decline in treasury yields has helped push mortgage rates lower, the decline in long term rates hasn’t been in lockstep thanks to the fact that these mortgages are securitized and sold on the global market. Investors now demand a higher risk premium on these mortgages due to higher delinquencies and foreclosures.

Next let’s take a look at 7 and 5-1 Adjustable Rate Mortgages (ARMs) Yes, this is good news if your 5-year (or 7 year) ARM is pegged to a treasury index. So if you’re facing a reset on, say, a $200,000 loan, you’re now getting a payment increase of about $150 a month, as opposed to $370 a month, which you would have had before the Fed started cutting rates.

Do the Fed Rate Drops Help Sub-Prime mortgage Holders?

Nope. Unfortunately if you have a sub-prime ARM it is more than likely pegged to LIBOR, which has moved in the opposite direction. Because of the liquidity issues in global financial markets, LIBOR rates have actually increased at the same time that treasury and other benchmark yields have been declining, so the Fed lowering rates today would not help too many sub-prime mortgage holders.

Even with lower rates, the home still must appraise for the amount being borrowed plus another 10 to 20%. In most places, depreciation alone has eliminated the opportunity to refinance and take advantage of rate adjustments.

How are Home Equity Lines of Credit Effected?

How about my Home Equity Line of Credit (HELOC): Yes, if you have that home equity line of credit that you used to renovate your bathroom/kitchen recently, then when the Fed lowers rates, your rate comes down as well. That’s because HELOCs are predominantly pegged to the prime rate, which moves in step with the Federal Reserve.

Chapter Nine

Life After Short Sale: When You Want To Buy A Home Again..FHA To The Rescue!

Remember, after a short sale, it’s possible to obtain a new mortgage in as few as 18 to 24 months, assuming all other credit has been kept clean.

Get ready for FHA loans to become the best choice

EVEN in the high priced areas like California!

Its now possible to get a FHA Mortgage in certain parts of the country for over $700,000!

Visit this web address for updated FHA mortgage limits for your state.

http://www.hud.gov/offices/hsg/sfh/lender/sfhmolin.cfm

You Must Know How FHA Loans Work:

First, it’s important to understand that FHA is not only for first time home buyers, anyone can sign up for an FHA loan, as long as you don’t have more than one FHA Loan at a time.

Your job is to establish a relationship with an FHA approved lender. Not all lenders hold this qualification.

Little Known SECRETS of FHA Loans:

*FHA Can Help Clients With Blemished Credit History. New programs are coming out that will allow borrowers with credit score in the high 500s buy a home.

* Bankruptcy. You can obtain an FHA loan two years from the date of your bankruptcy discharge, as long as you’ve maintained good credit since your debts were discharged.

*Foreclosure. If you keep your credit in excellent shape after a foreclosure, an FHA loan will be available to you two years from the final date of your foreclosure.

Ultra Competitive Rates & Terms

* There is little or no adjustment to the interest rate for an FHA loan, as the rates vary within .125 percent of a conventional loan.

* Mortgage insurance is funded into the loan, meaning a premium of 1.5% is added to the loan balance instead of being paid out-of-pocket. In addition, a small portion for the mortgage insurance premium is added to the monthly payment, but it is far less than private mortgage insurance premiums.

* Qualifying Borrowers can finance 97% of the purchase price and put down 3 percent. In some instances, when combined with other types of loans, the down payment can be zero.

· Allowable debt ratios are higher than the debt-ratio limits imposed for conventional loans.

· Borrowers can get up to 6% back from the seller to help with all of their closing costs.

Forget what you thought you knew about FHA…

At one point, FHA repair demands were so excessive that sellers would discount the list price to buyers who would agree to obtain conventional loans over FHA loans. Today the requirements appear more reasonable.

* You can purchase a home in need of repairs and finance the repair costs with the mortgage. This way you can make the necessary repairs immediately without having to come up with the money yourself.

* You can purchase manufactured homes and condominiums with a FHA loan.

* You can finance the cost of energy-efficient repairs with the mortgage.

* Defective roofs that leak still need to be replaced but an older roof does not necessitate replacement if it doesn’t leak. An roofing certification is acceptable in most cases.

* Windows that stick upon opening or have cracked panes do not require replacement.

* FHA appraisals do not take the place of a home inspection, and never have. Buyers should still obtain a professional home inspection.

It’s time to take advantage of the return of the FHA loan! It’s about to become significantly better than before, with higher limits and an easier appraisal process.

Chapter Ten

Something You Should Know: The Death Of The HELOC….Millions Of Homeowners Shut Out.

Most major lenders are freezing withdrawals from Home Equity Lines of Credit (HELOCs) – and I don’t want you to be caught off guard by this development. If you were planning on using your HELOC for spring home improvements or college tuition chances are the money has been shut off.

You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing (performing Broker Price Opinions, or Appraisals) properties and then suspending access for account holders who have seen a downward slide in their home value. Many of our students who do BPOs are reporting to us a dramatic increase in BPO requests from lenders for this reason.

Actual notice from Countrywide..sent to borrowers:

‘Important message about your loan: At Countrywide Home Loans we are committed to helping customers sustain homeownership. As part of the commitment, and in keeping with its sound risk-management and responsible lending practices, Countrywide Home Loan is reviewing and analyzing home equity lines of credit in its servicing portfolio.

declined. We believe that the decline in the value of your property, from its original appraised value at the time your loan was made is significant. In accordance with the terms of your Home Equity Credit Line Agreement and Disclosure Statement (Agreement), we have elected to suspend further draws against your account as of the Effective Date above.’

The Los Angeles Times recently reported that Countrywide notified many homeowners they’ve lost their right to borrow against their credit lines:

‘Tens of thousands of homeowners with home equity lines of credit are getting a rude surprise: They’ve been told by their lender that they can no longer take money out on their credit lines because sinking home prices have left them with little or no equity.

Among the lenders taking such action is Countrywide Financial Corp., which sent 122,000 letters to customers last week telling them they could no longer borrow against their credit lines. In some cases, according to the company, the borrowers are now “upside down” — the total debt on the home exceeds the market value of the property.

Calabasas-based Countrywide, the nation’s largest mortgage lender, says it uses computer modeling that factors in changes in home prices to determine which customers will have their money tap shut off.’

If there was any question that consumers were feeling the pinch before…just wait until they are told that their homes are worth LESS than what they owe. Or in the word of Countrywide, “Significantly Less”. Do you think that will have an effect on the economy? Think this will make consumers feel more confident about housing?

Appendix A:

Loss Mitigation Companies and Contact Info.

This is the most complete list of loss mitigation phone numbers for lenders on the Internet. It is sorted in alphabetical order. The first step to stop foreclosure is to contact your lender and try and obtain a reasonable loan workout or repayment plan. The quicker you get the ball rolling, the better chance you have of striking a deal with your lender, so you can save your home and your credit. The hardest call is the first. It only gets easier after that. Time is ticking and it goes by fast when you’re behind the infamous 8 ball. As Nike would say, “Just Do It!”

Here’s the list:

Lender/Servicer Loss Mitigation

Phone Numbers & Contact Information:

ABM AMRO Mortgage (800) 783-8900

Web: https://www.mortgage.com/C3/application.busAccredited Home Lenders (877) 683-4466 AMC Mortgage Services (Also handles loans originated by Ameriquest and Argent) (800) 211-6926

1600 McConnor Parkway

Schaumburg, IL 60173

Web: https://www.myamcloan.com/malwebapp/begin.do

American Home Mortgage Corp. (877) 304-3100*

Ameriquest Mortgage (Debt collection — see AMC Mortgage Services) (800) 211-6926

Aurora Loan Services (Debt collection) (800) 550-0508

By Overnight Mail:

601 5th Avenue

Scottsbluff, NE 69361

Attn: Customer Service

By Regular Mail:

P.O. Box 1706

Scottsbluff, NE 69363

E-mail: ccnmail@alservices.com

Web: https://www.alservices.com/Consumer/UI/SSL/Authentication/Login.aspx?ReturnUrl=%2fConsumer%2fUI%2fSSL%2fServ icing%2fDefault.aspx

Avelo Mortgage LLC (866) 992-8356*Bank of America (800) 846-2222BB&T Mortgage (800) 827-3722* AmTrust Bank (aka Ohio Savings Bank) (888) 696-4444

Beneficial (800) 333-5848

Central Pacific Bank (800) 342-8422*

Charter One (800) 234-6002

Chase (800) 548-7912

Loss Mitigation (877) 838-1882 ext 52195 The Number you will be directed to after you give your loan number: (866) 665-7629 (business hours are 11AM-8PM M-TH, 8AM-12PM F)

Chase Home Finance (800) 848-9136 (customer service) (858) 605-2181 (delinquency customer service)

Chase Home Finance-New Jersey (800) 446-8939*Chevy Chase Bank (800) 933-9100*

Web: https://chaseonline.chase.com/chaseonline/logon/sso_logon.jsp?fromLoc=ALL&LOB=COLLogon

Chase Manhattan Mortgage

(800) 446-8939 (Ohio Servicing Center)

(800) 526-0072 (Florida Servicing Center)

(800) 527-3040 x533 (Florida Servicing Center)Chevy Chase Bank (800) 933-9100

Web: https://www.chevychasebank.com/htm/payment.html (Payment Addresses)Citi Financial Mortgage (800) 753-3673 Citimortgage (800) 283-7918

Countrywide (800) 262-4218

Web: https://customers.countrywide.com/se…t_login254.asp

Ditech (800) 852-0656 (800) 449-8582

Downey Financial Corp. (800) 824-6902, ext. 6696

Deutsche Bank National Call Number on Mortgage Statement

EMC (800) 723-3004

P.O. Box 141358

Irving, TX 75014-1358

Web: https://www.emcmortgageservicing.com/ccn/ccnsecurity.asp

EverBank (800) 669-7724 ext. 4730

Equity One (Debt collection) (866) 361-3460

First Horizon Home Loans (800) 489-2966*

Fifth Third Bank (800) 375-1745 Option 3

First Merit Bank (888) 728-9931

Flagstar Bank (800) 968-7700, ext. 9780

Fremont Investment & Loan (866) 484-0291

GMAC Mortgage (800) 850-4622

GreenPoint Mortgage Funding (800) 784-5566, ext. 5383*

Green Tree (877) 816-9125

Homecomings Financial (800) 799-9250

HomeEq Mortgage Servicing ( Debt collection) (866) 822-1471

Household Finance (An HSBC Co.) (800) 333-5848

Household Mortgage (800) 333-4489

HSBC Mortgage (800) 338-6441

Default Resolution Team (if long term problem)

2929 Walden Avenue

Depew, NY 14043

(888) 648-3124 Loss Mit

(732) 352-7519 Fax

Web: http://us.hsbc.com/personal/mortgage/existing/difficulties.asp

Huntington National Bank (800) 323-4695

Indymac Bank (877) 736-5556

C/O Loan Resolution Department

P.O Box 7014

Pasadena, CA 91107

(Monday – Friday 6:15am-7:15pm. (Pacific Time)

Web: https://www.indymacbank.com/contactus/loanResolution.asp

Irwin Mortgage (888) 218-1988

P.O Box 7014

Pasadena, CA 91107

Web: https://www.irwinmortgage.com/wps/portal/!ut/p/cxml/E-mail: deliquency.prevention@irwinmortgage.comJames B. Nutter & Company (800) 315-7334Key Bank (800) 422-2442 LaSalle National Bank (800) 783-8900

Litton Loan Servicing (800) 999-8501 or (800) 548-8665

Fax (713) 966-8820

4828 Loop Central Drive

Houston, Texas 77081-2226

Web: https://www.littonloan.com/index.asp

Loss Mitigation Department Hours:

Monday Eastern: 9 a.m. – 7 p.m. Central:8 a.m. – 6 p.m. Mountain:7 a.m. – 5 p.m. Pacific:6 a.m. – 4 p.m.

Tuesday-Thursday Eastern:9 a.m. – 9 p.m. Central:8 a.m. – 8 p.m. Mountain:7 a.m. – 7 p.m. Pacific:6 a.m. – 6 p.m.

Friday Eastern:10 a.m. – 6 p.m. Central:9 a.m. – 5 p.m. Mountain:8 a.m. – 4 p.m. Pacific:7 a.m. – 3 p.m.

Default Counseling Department representatives are also available most weekends on Saturday from 8 a.m. to 12 p.m. and Sunday from 10 a.m. to 2 p.m. (CST).

Midland Mortgage (800) 552-3000 or (800) 654-4566

Web: https://www.mymidlandmortgage.com/MyMortgage/Login/Login.asp

Mortgage Lenders Network (800) 691-0129

E-mail: customerservice@mlnusa.com

Web: http://www.mlnusa.com/customers/info_credithelp.aspMortgage Electronic Registration Systems (MERS) (888) 679-6377National City (800) 367-9305, Ext. 53221 or (800) 523-8654

Attention: Homeowner’s Assistance

3232 Newmark Dr.

Miamisburg, Ohio 45342

(8AM-10:30PM ET, Monday – Thursday)

(8AM-5PM ET, Friday)

(8AM-Noon, Saturday)

Web: http://www.nationalcitymortgage.com/service_assistance.asp Nationwide Advantage Mortgage Company (800) 356-3442, ext. 6002*

NationStar Mortgage (888) 850-9398* Press 0 for operator

New Century Financial Now Carrington Mortgage Services (800) 790-9502 or (877) 206-9904

(6:00 a.m. to 7:00 p.m. Pacific Time, Monday – Thursday)

(6:00 a.m. to 6:00 p.m. Pacific Time, Friday)

Web: https://myloan.newcentury.com/webapps/servicing/myloans/index.do

NovaStar Mortgage Loan Resolution Department (888) 743-0774 Non-English: (888) 743-0774, ext. 4523

Ocwen Federal Bank (800) 746-2936 or (877) 596-8560

Web: http://www.ocwencustomers.com/csc_fa.cfm

Attention: Financial Information

12650 Ingenuity Drive

Orlando, Florida 32826

or

Ocwen Financial Corporation

1661 Worthington Rd., Suite 100

West Palm Beach, Florida 33409

Phone: 877-226-2936

For serving Ocwen with legal process, please send to their registered agent:

Corporation Service Company

2711 Centerville Road, Suite 400

Wilmington, DE 19808

Phone: 561-682-8000, x8386

Option One (866) 711-1962 or (888) 275-2648

Web: http://www.oomc.com/servicing/servicing_baifaqs.asp

PHH Mortgage (Formerly Cendant) (800) 257-0460

For borrowers facing possible delinquency: (800) 330-0423*

For borrowers in the foreclosure process: (800) 750-2518

Web:https://www.phhmortgage.com/sso/mq/login

ResMae Mortgage Corp. (877) 473-7623, ext. 5944

Saxon (800) 665-7367

Select Portfolio Servicing (888) 818-6032

Fax: (801) 293-3936

Loan Resolution Department

P.O. Box 65250

Salt Lake City, UT 84165-0250

(Monday – Thursday 10:00 a.m. – 10:00 p.m. EST)

(Friday 10:00 a.m. – 7:00 p.m. EST)

(Saturday 9:00 a.m. – 1:00 p.m. EST)

Web: http://www.spservicing.com/services/customer/loanresolution.htm

SkyBank (800) 290-3359

Sun Trust Mortgage (800) 634-7928

PO Box 26149

Richmond, VA 23260-6149

Mail Code RVW 3003Web: https://www.suntrustmortgage.com/generalquestions.asp#

Third Federal Savings (888) 844-7333

US Bank (800) 365-7900

Wachovia Bank of Delaware (866) 642-8608

Washington Mutual (866) 926-8937 or (888) 453-3102 or (800) 478-0036 or (800) 254-3677

Waterfield Mortgage (800) 957-7245

Fax: (260) 459-5390

c/o Loss Mitigation Dept.

7500 W. Jefferson Blvd.

Fort Wayne, IN 46804

(7 am – 10 pm EST Monday – Thursday)

(7 am – 9 pm EST Fridays)

(8 am – 2 pm EST Saturdays)

E-Mail: saveyourhome@waterfield.com

Web: http://www.waterfield.com/scripts/cgiip.exe/WService=wfg/pub/borrowerservices/delqasst

Wells Fargo (877) 216-8448 or (866) 261-5642 or (800)766-0987 or (800) 678-7986 for payment assistance

Borrower Counseling Services

Monday – Friday 8:00 a.m. – 9:00 p.m., CT

Saturday 9:00 a.m. – 2:00 p.m., CT

Web: https://www.wellsfargo.com/mortgage/account/

Wendover Financial Services Corporation (800) 934-1081 or (800) 436-1022

Web: http://www.wendover.com/borrowers.html

Wilshire Credit Corporation (888) 502-0100

P.O. Box 8517

Portland, OR 97207-8517

From 6 a.m. to 5 p.m. (Pacific time) Monday through Friday

Web: http://www.wfsg.com/borrower/borrower.aspx

*No direct line to the loss mitigation or loan modification department. But we are working on it

APPENDIX B

What’s the difference between Short Sale vs Short Payoff.

In our current real estate environment it is crucial that to fully understand the difference between a “Short Sale” and a “Short Payoff”.

A Short Sale is where the lender or investor agrees to accept an amount less than actual owed on the property.

The Criteria for a Short Sale are that the borrower demonstrates a verifiable long term hardship.

A Short Payoff is when the lender agrees to release the lien (their interest) on the property and allow the property to be “conveyed” to a new owner. The lender agrees to accept less than the amount owed on the property to release the lien however they extend a certain amount of “credit” to the borrower in the form of an unsecured line of credit or promissory note.

The Criteria for a Short Payoff – The mortgage is current, the borrower has great credit, the borrower had and can demonstrate the ability to pay off the debt.

When would you request a Short Payoff? – You would request a short payoff when the home has lost value dramatically and you do not have the ability to pay the large amount to get completely out of the property.

Note – Not all lenders will allow for a Short Payoff, however you will never know if you never ask.

Advantages of a Short Pay-Off:

• You are able to move out of the property and get on with your life.

• You SHOULD receive no negative feedback on your credit.

• You may obtain a lower interest rate on the loan. Sometimes 1-2%.

If for some crazy reason your ability to pay changes and your client are not able to pay on the note, the credit ramifications are significantly smaller.

How to apply for a short payoff
1. If possible call the lender and ask them if they will accept a short payoff. Remember you may need to talk to a supervisor or to loss mitigation directly.

2. Put together your package, this is the same information as your short sale package, however the goal is to show the lender the abilty to pay not the inability to pay.

3. Do not accept the first no as the answer, and never paint a lender or servicer with a broad brush. Remember most lenders do not work with just one investor, lenders sell their loans to different investors so if Countrywide says no today that does not mean no tomorrow.

Man in the Arena

“It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.” Theodore Roosevelt

APPENDIX C:

The Complete State-by-State

Guidebook on the most

Common Foreclosure Procedures.

This section is written for the purpose of providing current information in regard to the topics as set forth in the text. It is not the intention of any author or publisher herein, to provide the reader with specific legal, financial, tax, accounting or professional advice. Understand that each business transaction presents a whole different or unique set of circumstances. Each state is different and applicable laws, regulations and terminology for related subjects may vary in different jurisdictions. Considerable efforts are made to provide the reader with timely and accurate information; however there are no guarantee’s. Therefore, if expert assistance and advice is required, the reader should always seek the services of a competent professional.

The following information was compiled by

www.harrisrealestateuniversity.com

If you have any questions please visit our site.

Alabama*

Alabama is a Non-Judicial State

Power of sale constitutes part of security

Where a power to sell lands is given to the grantee in any mortgage, or other conveyance intended to secure the payment of money, the power is part of the security, and may be executed by any person, or the personal representative of any person who, by assignment or otherwise, becomes entitled to the money thus secured; and a conveyance of the lands sold under such power of sale to the purchaser at the sale, executed by the mortgagee, any assignee

or other person entitled to the money thus secured, his agent or attorney, or the auctioneer making the sale, vests the legal title thereto in such purchaser. Probate judges shall index foreclosure deeds by the names of the original grantor and grantee in the mortgage, and also by the names of the grantor and grantee in the foreclosure deeds.

Sale under power where instrument silent as to place or terms of sale.

If a deed of trust or mortgage, with power of sale, is silent as to the place or terms of sale, or as to the character or mode of notice, a sale may be made at the courthouse door of the county wherein the land is situated, after condition broken, for cash to the highest bidder, after 30 days’ notice of the time, place and terms of sale by publishing such notice once a week for four consecutive weeks in a newspaper published in the county wherein said lands or property in said mortgage or deed of trust are situated.

Foreclosure when instrument contains no power of sale. If no power of sale is contained in a mortgage or deed of trust, the grantee or any assignee thereof, at his option, after condition broken, may foreclose same either in a court having

jurisdiction of the subject matter, or by selling for cash at the courthouse door of the county where the property is situated, to the highest bidder, the lands embraced in said mortgage or deed of trust, after notice of the time, place, terms and purpose of such sale has been given by four consecutive weekly insertions of such notice in some newspaper published in the county wherein said lands, or a portion thereof are situated.

Additional satisfaction permitted under continuing power of sale.

The sale of any part of the property conveyed by mortgage, either under power of sale contained

in the mortgage, or by foreclosure, shall operate as a foreclosure of the mortgage only as to the property sold, and if the mortgage indebtedness is not thereby satisfied in full, the other property contained in the mortgage continues as security for the mortgage debt and there may be a further foreclosure of the mortgage, either by sale under power of sale or by foreclosure. Every power of sale contained in the mortgages hereafter executed shall, unless otherwise expressly provided therein, be held to give a continuing power of sale authorizing the mortgagee or his assignee after the law day of the mortgage to sell the mortgaged property from time to time in separate lots or parcels as it comes into his possession.

How notice of sale given.

Notice of said sale shall be given in the manner provided in such mortgage or deed of trust or in

this Code in the county where the mortgagor resides and the land, or a part thereof, is located; but, if said mortgagor does not reside in the county where the land or any part thereof is located, then such notice must be published in the county where said land, or any material part thereof, is located; provided, that notice of all sales under powers of sale contained in mortgages and deeds of trust executed after July 1, 1936, where the amount secured is $500.00 or more, shall be given by publication once a week for three successive weeks in some newspaper published in the county in which such land or any portion thereof is Situated, and said notice of sale must give the

time, place and terms of said sale, together with a description of the property to be sold.

Notice of sale.

Notice of said sale shall be given in the county where said land is located. Notice of all sales under this article shall be given by publication once a week for three successive weeks in a newspaper published in the county or counties in which such land is

located. If there is land under the mortgage in more than one county the publication is to be made

in all counties where the land is located. The notice of sale must give the time, place and terms of said sale, together with a description of the property. If no newspaper is published in the county where the lands are located, the notice shall be placed in a newspaper published in an adjoining county. The notice shall be published in said adjoining county for three successive weeks.

Place and time for conducting foreclosure by power of sale.

The power to sell lands under this article must be exercised at the appropriate courthouse door

considered the front or main door to the courthouse, of the county where the mortgaged land or a substantial and material part thereof, is located.

The sale shall be held between the hours of 11 A.M. and 4 P.M. on the day designated for the exercise of the power to sell the land.

*Courtesy of Alabama State Statutes

Alaska*

Alaska is a Non-Judicial State

Sale By Trustee.

(a) If a deed of trust is executed conveying real property located in the state to a trustee as

security for the payment of an indebtedness and the deed provides that in case of default or noncompliance with the terms of the trust, the trustee may sell the property for condition broken, the trustee, in addition to the right of foreclosure and sale, may execute the trust by sale of the property, upon the conditions and in the manner set forth in the deed of trust, without first securing a decree of foreclosure and order of sale from the court, if the trustee has complied with the notice requirements of (b) of this section. If the deed of trust is foreclosed judicially or the note secured by the deed of trust is sued on and a judgment is obtained by the beneficiary, the beneficiary may not exercise the non-judicial remedies described in this section.

(b) Not less than 30 days after the default and not less than three months before the sale the

trustee shall record in the office of the recorder of the recording district in which the trust property

is located a notice of default setting out (1) the name of the trustor, (2) the book and page where

the trust deed is recorded, (3) a description of the trust property, including the property’s street

address if there is a street address for the property, (4) a statement that a breach of the obligation

for which the deed of trust is security has occurred, (5) the nature of the breach, (6) the sum

owing on the obligation, (7) the election by the trustee to sell the property to satisfy the obligation,

and (8) the date, time, and place of the sale. An inaccuracy in the street address may not be used

to set aside a sale if the legal description is correct. At any time before the sale, if the default has arisen by failure to make payments required by the trust deed, the default may be cured by payment of the sum in default other than the principal which would not then be due if no default had occurred, plus attorney fees or court costs actually incurred by the trustee due to the default. If under the same trust deed notice of default under this subsection has been recorded two or more times previously and the default has been cured under this subsection, the trustee may

elect to refuse payment and continue the sale.

(c) Within 10 days after recording the notice of default, the trustee shall mail a copy of the notice

by certified mail to the last known address of each of the following persons or their legal representatives: (1) the grantor in the trust deed; (2) the successor in interest to the grantor whose interest appears of record or of whose interest the trustee or the beneficiary has actual notice, or who is in possession of the property; (3) any other person in possession of or occupying the property; (4) any person having a lien or interest subsequent to the interest of the

trustee in the trust deed, where the lien or interest appears of record or where the trustee or the

beneficiary has actual notice of the lien or interest. The notice may be delivered personally instead of by mail.

(d) If the State of Alaska is a subsequent party, the trustee, in addition to the notice of default, shall give the state a supplemental notice of any state lien existing as of the date of filing the notice of default. This notice must set out, with such particularity as reasonably available information will permit, the nature of the state’s lien, including the name and address, if known, of the person whose liability created the lien, the amount shown on the lien document, the department of the state government involved, the recording district, and the book and page on which the lien was

recorded.

Sale at Public Auction.

(a) The sale shall be made under the terms and conditions and in the manner set out in the

deed of trust. However, the sale shall be made

(1) at public auction held at the front door of a courthouse of the superior court in the judicial

district where the property is located, unless the deed of trust specifically provides that the sale

shall be held in a different place; and

(2) after public notice of the time and place of the sale has been given in the manner provided by law for the sale of real property on execution.

(b) The attorney for the trustee may conduct the sale and act in the sale as the auctioneer for the trustee. Sale shall be made to the highest and best bidder. The beneficiary under the trust deed may bid at the trustee’s sale. The trustee shall execute and deliver to the purchaser a deed to the property sold.

(c) The deed must recite the date and the book and page of the recording of default, and the

mailing or delivery of the copies of the notice of default, the true consideration for the conveyance, the time and place of the publication of notice of sale, and the time, place, and manner of sale, and refer to the deed of trust by reference to the page, volume, and place of record.

(d) After the sale an affidavit of mailing the notice of default and an affidavit of publication of the notice of sale shall be recorded in the mortgage records of the recording district where the property is located.

(e) The trustee may postpone sale of all or any portion of the property by delivering to the person conducting the sale a written and signed request for the postponement to a stated date and hour.

The person conducting the sale shall publicly announce the postponement to the stated date and

hour at the time and place originally fixed for the sale. This procedure shall be followed in any succeeding postponement.

Title, Interest, Possessory Rights, and Redemption.

(a) The sale and conveyance transfers all title and interest that the party executing the deed of

trust had in the property sold at the time of its execution, together with all title and interest that

party may have acquired before the sale, and the party executing the deed of trust or the heirs

or assigns of that party have no right or privilege to redeem the property, unless the deed of

trust so declares.

(b) The purchaser at a sale and the heirs and assigns of the purchaser are, after the execution of

a deed to the purchaser by the trustee, entitled to the possession of the premises described in the deed as against the party executing the deed of trust or any other person claiming by, through or under that party, after recording the deed of trust in the recording district where the property is located.

(c) A recital of compliance with all requirements of law regarding the mailing or personal

delivery of copies of notices of default in the deed executed under a power of sale is prima facie

evidence of compliance with the requirements. The recital is conclusive evidence of compliance

with the requirements in favor of a bona fide purchaser or encumbrancer for value and without

notice.

Deficiency Judgment Prohibited.

When a sale is made by a trustee under a deed of trust, no other or further action or proceeding

may be taken nor judgment entered against the maker or the surety or guarantor of the maker,

on the obligation secured by the deed of trust for a deficiency.

*Courtesy of Alaska State Statutes

Arizona*

Arizona is a Power of Sale State

Foreclosure of mortgage by court action

Mortgages of real property and deeds of trust shall be foreclosed by action in a court.

Right of junior lien holder upon foreclosure action by senior lien holder

Any time after an action to foreclose a mortgage or deed of trust is brought, and prior to the sale, a person having a junior lien on the property shall be entitled to an assignment of all the interest of the holder of the mortgage or deed of trust by paying him the amount secured, with interest and costs, together with the amount of any other superior liens of the same holder. The assignee may then continue the action in his name.

Judgment of foreclosure; contents; sale of property; resale

A. When a mortgage or deed of trust is foreclosed, the court shall give judgment for the entire amount determined due, and shall direct the mortgaged property, or as much thereof as is necessary to satisfy the judgment, to be sold. B. Judgments for the foreclosure of mortgages and other liens shall provide that the plaintiff recover his debt, damages and costs, with a foreclosure of the plaintiff’s lien on the property

subject to the lien, and, except in judgments against executors, administrators and guardians, that a special execution issue to the sheriff or any constable of the county where the property is located, directing him to seize and sell the property as under execution, in satisfaction of the judgment. If the property cannot be found, or if the proceeds of the sale are insufficient to satisfy the judgment, then if so ordered by the court the sheriff shall take the money or any balance

thereof remaining unpaid out of any other property of the defendant. Any sale of real property to satisfy a judgment shall be a credit on the judgment in the amount of either the fair market value of the real property or the sale price of the real property at sheriff’s sale, whichever is greater.

C. If the debt for which the lien is held is not all due, as soon as enough of the property is sold to pay the amount due, with costs, the sale shall cease, and afterward as often as more becomes due for principal and interest, the court may, on motion, order more property sold. If the property cannot be sold in portions without injury to the parties, the whole may be ordered sold in the first instance and the entire debt and costs paid, allowing a rebate of interest where proper.

Notice of trustee’s sale

A. The trustee shall give written notice of the time and place of sale legally describing the trust property to be sold by each of the following methods:

1. Recording a notice in the office of the recorder of each county where the trust property is situated.

2. Giving notice as provided in section 33-809 to the extent applicable.

3. Posting a notice, at least twenty days before the date of sale in some conspicuous place on the trust property to be sold, if posting can be accomplished without a breach of the peace. If access to the trust property is denied because a common entrance to the

property is restricted by a limited access gate or similar impediment, the property shall be posted by posting notice at that gate or impediment. Notice shall also be posted at one of the places provided for posting public notices at any bUilding that serves as a location of the superior court in the county where the trust property is to be sold. Posting is deemed

completed on the date the first notice is posted.

4. Publication of sale notice in a newspaper of general circulation in each county in which trust property to be sold is situated. Sale notice shall be published at least once a week for four consecutive weeks. The last date of publication shall not be less than ten days prior to the date of sale. Publication is deemed completed on the date of the first publication of

notice pursuant to this paragraph.

B. The sale shall be held at the time and place designated in the notice of sale on a day other

than a Saturday or legal holiday between 9:00 a.m. and 5:00 p.m. at a specified place on the trust property, at a specified place at any building that serves as a location of the superior court or at a specified place at a place of business of the trustee, in any county in which part of the trust property to be sold is situated.

C. The notice of sale shall contain:

1. The date, time and place of the sale. This date shall be at least ninety days after the date

that the notice of sale was recorded.

2. The street address, if any, or identifiable location as well as the legal description of the trust

property.

3. The county assessor’s tax parcel number for the trust property or the tax parcel number of

a larger parcel of which the trust property is a part.

4. The original principal balance as shown on the deed of trust. If the amount is not shown on the deed of trust, it shall be listed as “unspecified”.

5. The names and addresses, as of the date the notice of sale is recorded, of the beneficiary and

the trustee, the name and address of the original trustor as stated in the deed of trust, the signature of the trustee and the basis for the trustee’s qualification pursuant to section 33-803, subsection A. The address of the beneficiary shall not be in care of the trustee or trustee’s agent.

6. The telephone number of the trustee.

Sale by public auction; postponement of sale

A. On the date and at the time and place designated in the notice of sale, the trustee shall offer to

sell the trust property at public auction for cash to the highest bidder. The attorney or agent for the trustee may conduct the sale and act at such sale as the auctioneer for the trustee. Any person, including the trustee or beneficiary, may bid at the sale. Only the beneficiary may make a credit bid in lieu of cash at sale. The trustee shall require every bidder except the beneficiary to provide a one thousand dollar deposit in cash or in any other form that is satisfactory to the

trustee as a condition of entering a bid. The trustee shall not refuse cash as a form of payment of

the bidder’s deposit. Every bid shall be deemed an irrevocable offer until the sale is completed,

except that a subsequent bid by the same bidder for a higher amount shall cancel that bidder’s lower bid. To determine the highest price bid, the trustor or beneficiary present at the sale may recommend the manner in which the known lots, parcels or divisions of the trust property be sold. The trustee shall conditionally sell the trust property under each recommendation, and, in addition, shall conditionally sell the trust property as a whole. The trustee shall determine which conditional sale or sales result in the highest total price bid for all of the trust property. The trustee shall return deposits to all but the bidder or bidders whose bid or bids result in the highest bid

price. The sale shall be completed on payment by the purchaser of the price bid in a form satisfactory to the trustee. The subsequent execution, delivery and recordation of the trustee’s deed as prescribed by section 33811 are ministerial acts. If the trustee’s deed is recorded in the county in which the trust property is located within fifteen business days after the date of the sale, the trustee’s sale is deemed perfected at the appointed date and time of the trustee’s sale.

B. The person conducting the sale may, for any cause deemed in the interest of the beneficiary or trustor, or both, postpone or continue the sale from time to time or change the place of the sale to any other location authorized pursuant to this chapter by giving notice of the new date, time and place by public declaration at the time and place last appointed for the sale. Any new sale date shall be a fixed date within ninety calendar days of the date of the declaration. No other notice of the postponed, continued or relocated sale is required except as provided in subsection C of this

section.

C. A sale shall not be complete if the sale as held is contrary to or in violation of any federal statute in effect because of an unknown or undisclosed bankruptcy. A sale so held shall be deemed to be continued to a date, time and place announced by the trustee at the sale and shall comply with subsection B of this section or, if not announced, shall be continued to the same place and at the same time twenty-eight days later, unless the twenty-eighth day falls on a

Saturday or legal holiday, in which event it shall be continued to the first business day thereafter. In the event a sale is continued because of an unknown or undisclosed bankruptcy, the trustee shall notify by registered or certified mail, with postage prepaid, all bidders who provide their names, addresses and telephone numbers in writing to the party conducting the sale of the continuation of the sale.

Redemption of property by payment to officer directed under foreclosure judgment to

sell the property.

If payment is made to the officer directed to sell mortgaged property under a foreclosure

judgment, before the foreclosure sale takes place, the officer shall make a certificate of payment and acknowledge it, and the certificate shall be recorded in the office in which the mortgage or deed of trust is recorded.

Payment of bid; trustee’s deed

A. The highest bidder at the sale, other than the beneficiary to the extent of the credit bid, shall

pay the price bid by no later than 5:00 p.m. of the following day, other than a Saturday or legal holiday. If the highest bidder fails to pay the amount bid for the property struck off to the bidder at the sale, the trustee, in the trustee’s sole discretion, shall either continue the sale to reopen bidding or immediately offer the trust property to the second highest bidder who may purchase the trust property at that bidder’s bid price. The deposit of the highest bidder who fails to pay the amount bid shall be forfeited and shall be treated as additional sale proceeds to be applied. If the second highest bidder does not pay that bidder’s bid price by 5:00 of the next day excluding Saturdays and legal holidays after the property has been offered to that bidder by the trustee, the trustee shall either continue the sale to reopen bidding or offer the trust

property to each of the prior bidders on successive days excluding Saturdays and legal holidays in order of their highest bid, until a bid price is paid, or if there is no other bidder, the sale shall be deemed to be continued to a time and place designated by the trustee, or if not designated, the sale shall be continued to the same place and at the same time twenty-eight days after the last scheduled sale date.

If the twenty-eighth day is a Saturday or legal holiday, the sale shall be continued to the next business

day. If the sale is continued, the trustee shall provide notice of the continuation of the sale by registered

or certified mail, with postage prepaid, to all bidders who provide their names, addresses and telephone numbers in writing to the party conducting the sale. In addition to the forfeit of deposit, a highest bidder who fails to pay the amount bid by that bidder is liable to any person who suffers loss or expenses as a result, including attorney fees. In any subsequent sale of trust property, the trustee may reject any bid of that person. In any sale that is continued pursuant to this subsection, the trustee shall reject the bid from any previous bidder who elected not to pay that bidder’s bid price. The price bid shall be paid at the office of the trustee or the trustee’s agent, or any other

reasonable place designated by the trustee. The payment of the bid price may be made at a later time

if agreed upon in writing by the trustee. The trustee shall execute and deliver the trustee’s deed to the

purchaser within seven business days after receipt of payment by the trustee or the trustee’s agent

made in a form that is satisfactory to the trustee. The trustee’s deed shall raise the presumption of

compliance with the requirements of the deed of trust and this chapter relating to the exercise of the

power of sale and the sale of the trust property, including recording, mailing, publishing and posting of

notice of sale and the conduct of the sale. A trustee’s deed shall constitute conclusive evidence of the

meeting of those requirements in favor of purchasers or encumbrancers for value and without actual

notice. Knowledge of the trustee shall not be imputed to the beneficiary.

The trustor, its successors or assigns, and all persons to whom the trustee mails a notice of a

sale under a trust deed pursuant to section 33-809 shall waive all defenses and objections to the sale

not raised in an action that results in the issuance of a court order granting relief pursuant to rule 65,

Arizona rules of civil procedure, entered before 5:00 p.m. on the last day other than Saturday, Sunday or other legal holiday before the scheduled date of the sale. A copy of the order, the application for the order

and the complaint shall be delivered to the trustee within twenty-four hours after entering the

order.

D. A sale is not complete if the sale violates subsection C of this section because of an

undisclosed order entered by the court within the time provided for in subsection C of this section. A sale held in violation of subsection C of this section shall be continued to a date, time

and place announced by the trustee at the sale and shall comply with section 33-810, subsection B. If not announced, the sale shall be continued to the same place and at the same time twenty-eight days later. If the twenty-eighth day falls on a Saturday, Sunday or other legal holiday, the sale shall be continued to the next business day. If the sale is continued because of

an unknown or undisclosed order as provided in this subsection, the trustee shall notify by registered or certified mail, with postage prepaid, all bidders who provide names, addresses and telephone numbers in writing to the party conducting the sale of the continuation of the sale. E. The trustee’s deed shall operate to convey to the purchaser the title, interest and claim of the trustee, the trustor, the beneficiary, their respective successors in interest and all persons

claiming the trust property sold by or through them, including all interest or claim in the trust property acquired subsequent to the recording of the deed of trust and prior to delivery of the trustee’s deed. That conveyance shall be absolute without right of redemption and clear of all liens, claims or interests that have a priority subordinate to the deed of trust and shall be subject to all liens, claims or interests that have a priority senior to the deed of trust.

Disposition of proceeds of sale

A. The trustee shall apply the proceeds of the trustee’s sale in the following order of priority:

1. To the costs and expenses of exercising the power of sale and the sale, including the payment of the trustee’s fees and reasonable attorney’s fees actually incurred.

2. To the payment of the contract or contracts secured by the trust deed.

3. To the payment of all other obligations provided in or secured by the trust deed and

actually paid by the beneficiary before the trustee’s sale.

4. To the junior lien holders or encumbrancers in order of their priority as they existed at the time

of the sale. After payment in full to all junior lien holders and encumbrancers payment shall be

made to the trustor, except that if the trustor has sold or transferred the property to another

owner before the trustee’s sale, payment shall be made to the person who is the owner of record

at the time of the trustee’s sale.

*Courtesy of Arizona State Statutes

Arkansas*

Arkansas is a Judicial and Non-Judicial State. Judicial is most commonly used.

Qualifications of trustee -Appointment of successor trustee.

A. A trustee of a deed of trust shall be any:

1. Attorney who is an active licensed member of the Bar of the Supreme Court of the State of Arkansas or law firm among whose members includes such an attorney;

2. Bank or savings and loan association authorized to do business under the laws of Arkansas

or those of the United States;

3. Corporation which is an affiliate of a bank or savings and loan association authorized to do

business under the laws of Arkansas or those of the United States, which is either an Arkansas

bank or a registered out-of-state bank which maintains a branch in the State of Arkansas; or

4. Agency or authority of the State of Arkansas where not otherwise prohibited by law.

The beneficiary may appoint a successor trustee at any time by filing a substitution of trustee for

record with the recorder of the county in which the trust property is situated. The new trustee

shall succeed to all the power, duties, authority, and title of the original trustee and any previous

successor trustee. The beneficiary may, by express provision in the substitution of a trustee, ratify and confirm actions taken on its behalf by the new trustee prior to the recording of the substitution of the trustee. The substitution shall identify the deed of trust by stating the names of the original parties thereto, the date of recordation, and the book and page where recorded or the recorder’s document number. The substitution shall also state the name of the new trustee and shall be executed and duly acknowledged by all the beneficiaries or their successors in interest.

A mortgagee may delegate his or her powers and duties under this chapter to an attorney-in-fact,

whose acts shall be done in the name of and on behalf of the mortgagee. The qualifications for

an attorney-in-fact shall be the same as those for a trustee. The appointment of an attorney-in-

fact by a mortgagee shall be made by a duly executed, acknowledged, and recorded power of

attorney, which shall identify the mortgage by stating the names of the original parties thereto, the

date of recordation, and the book and page where recorded or the recorder’s document number.

A substitution of trustee or power of attorney shall be recorded before any trustee’s or mortgagee’s deed executed by the substituted trustee or attorney-in-fact is recorded.

Conditions to exercise of power.

A trustee or mortgagee may not sell the trust property unless:

1. The deed of trust or mortgage is filed for record with the recorder of the county in which the

trust property is situated;

2. There is a default by the mortgagor, grantor, or other person owing an obligation, the performance of which obligation is secured by the mortgage or deed of trust or by their successors in interest with respect to any provision in the mortgage or deed of trust that

authorizes sale in the event of default of the provision;

3. The mortgagee, trustee, or beneficiary has filed for record with the recorder of the county in which the trust property is situated a duly acknowledged notice of default and intention to sell.

4. No action has been instituted to recover the debt or any part of it secured by the mortgage or deed of trust or, if such action has been instituted, the action has been dismissed; and

5. A period of at least sixty (60) days has elapsed since the recording of the notice of default

and intention to sell.

Contents of notice -Persons to receive notice.

A. The mortgagee’s or trustee’s notice of default and intention to sell shall set forth:

1. The names of the parties to the mortgage or deed of trust;

2. A legal description of the trust property and, if applicable, the street address of the

property;

3. The book and page numbers where the mortgage or deed of trust is recorded or the

recorder’s document number;

4. The default for which foreclosure is made;

5. The mortgagee’s or trustee’s intention to sell the trust property to satisfy the obligation,

including in conspicuous type a warning as follows: “YOU MAY LOSE YOUR PROPERTY IF

YOU DO NOT TAKE IMMEDIATE ACTION”; and

6. The time, date, and place of sale.

B. The mortgagee’s or trustee’s notice of default and intention to sell shall be mailed within thirty

(30) days of the recording of the notice by certified mail, postage prepaid and by first class mail, postage prepaid, to the address last known to the mortgagee

or the trustee or beneficiary of the following persons:

1. The mortgagor or grantor of the deed of trust;

2. Any successor in interest to the mortgagor or grantor whose interest appears of record or whose interest the mortgagee or the trustee or beneficiary has actual notice;

3. Any person having a lien or interest subsequent to the interest of the mortgagee or trustee

when that lien or interest appears of record or when the mortgagee, the trustee, or the beneficiary has actual notice of the lien or interest; and

4. Any person requesting notice.

C. The disability, incapacity, or death of any person to whom notice must be given under this section shall not delay or impair in any way the mortgagee’s or trustee’s right to proceed with a sale, provided that the notice has been given in the manner required by this section to the guardian or conservator or to the administrator or executor, as the case may be.

Publication of notice.

The mortgagee or trustee shall publish the notice:

1. In a newspaper of general circulation in the county in which the trust property is situated or in a

newspaper of general statewide daily publication one (1) time a week for four (4) consecutive

weeks prior to the date of sale. The final publication shall be no more than ten (10) days prior to

the sale; By employing a third-party posting provider to post notice at the place at the county courthouse

where foreclosure sales are customarily advertised and conducted; and By employing a third-

party Internet foreclosure sale notice information service provider. On or before the date the

mortgagee or trustee conducts the sale, a duly acknowledged affidavit of mailing and publication

of the notice of default and intention to sell shall be filed for record with the recorder of the

county in which the trust property is situated.

Manner of sale.

The sale shall be held on the date and at the time and place designated in the notice of default

and intention to sell, except that the sale shall:

1. Be held between 9:00 a.m. and 4:00 p.m.;

2. Be held either at the premises of the trust property or at the front door of the county

courthouse of the county in which the trust property is situated; and

3. Not be held on a Saturday, Sunday, or a legal holiday.

Any person, including the mortgagee and the beneficiary, may bid at the sale. The trustee may

bid for the beneficiary but not for himself or herself. The mortgagee or trustee shall engage a third party to conduct the sale and act at the sale as the auctioneer of the mortgagee or trustee. No bid shall be accepted that is less than two-thirds (2/3) of the entire indebtedness due at the date of sale.

The person conducting the sale may postpone the sale from time to time. In every such case,

notice of postponement shall be given by:

1. Public proclamation thereof by that person; or

2. Written notice of postponement posted at the time and place last appointed for the sale. No other notice of the postponement need be given unless the sale is postponed for longer than thirty (30) days beyond the date designated in the notice. Unless otherwise agreed to by the trustee or mortgagee, the purchaser shall pay at the time of sale the price bid. Interest shall accrue on any unpaid balance of the price bid at the rate specified in the note secured by the

mortgage or deed of trust. Within ten (10) days after the sale, the mortgagee or trustee shall execute and deliver the trustee’s deed or mortgagee’s deed to the purchaser. The mortgagee or

beneficiary shall receive a credit on its bid for:

1. The amount representing the unpaid principal owed;

2. Accrued interest as of the date of the sale;

3. Advances for the payment of taxes, insurance, and maintenance of the trust property;

and

4. Costs of the sale, including reasonable trustee’s and attorney’s fees. The purchaser at the sale shall be entitled to immediate possession of the property. Possession may be obtained by filing a complaint in the circuit court of the county in which the property lies and attaching a copy of the recorded trustee’s or mortgagee’s deed, whereupon the purchaser

shall be entitled to an ex parte writ of assistance. Alternatively, the purchaser may bring an action

for forcible entry and detainer.

Effect of sale.

A sale made by a mortgagee or trustee shall foreclose and terminate all interest in the trust property of all persons to whom notice is given and of any other person claiming by, through, or under the person. A failure to give notice to any person entitled to notice shall not affect the validity of the sale as to persons notified. A person entitled to notice, but not given notice, shall have the rights of a person not made a

defendant in a judicial foreclosure. A sale shall terminate all rights of redemption, and no person

shall have a right to redeem the trust property after a

sale, notwithstanding that the deed to and possession of the trust property have yet to be

delivered.

No notice shall be required to be given to any person claiming an interest subsequent to the filing of the notice of default and intention to sell. The filing of the notice of default and intention to sell shall have the same force and effect as the filing of a lis pendens in a judicial proceeding.

Disposition of proceeds of sale.

A. The trustee or mortgagee shall apply the proceeds of the sale as follows:

1. To the expenses of the sale, including compensation of the trustee or mortgagee and a

reasonable fee by the attorney;

2. To the indebtedness owed;

3. To all persons having recorded liens subsequent to the interest of the trustee or mortgagee

as their interests may appear in the order of the priority; and

4. The surplus, if any, to the grantor of the trust deed or to the successor in interest of the

grantor entitled to the surplus.

Deficiency judgment.

At any time within twelve (12) months after a sale under this chapter, a money judgment may be sought for the balance due upon the obligation for which a mortgage or deed of trust was given as security. In such action, the plaintiff shall set forth in his or her complaint, and shall have the burden of proving, the entire amount of indebtedness which was secured by the mortgage or deed of trust, the amount for which the trust property was sold, and the fair market

value of the trust property at the date of sale, together with interest from the date of sale, costs,

and attorney’s fees.

A. Judgment shall not exceed the lesser of the following:

1. The amount for which the indebtedness due at the date of sale, with interest from the date of

sale, costs, and trustee’s and attorney’s fees, exceeds the fair market value of the trust property;

or

2. The amount for which the indebtedness due at the date of sale, with interest from the date of

sale, costs, and trustee’s and attorney’s fees, exceeds the amount for which the trust property

was sold.

*Courtesy of Arkansas State Statutes

California*

California is a non-judicial state.

Day 1 Day 90 Day 120 Day 141

Redemption Period Publication Period Trustee’s Sale

Lasts 90 days from the

recordation of the Notice of

Default

Lasts 30 days from the end of Held 21 days after first

Redemption publication

Redemption Period

Once the Notice of Default records the foreclosure time frame begins. Within 10 business days

a copy of the recorded Notice of Default is sent by certified and regular mail to the borrowers at

all addresses provided and any recorded special requests. Within 30 days a copy of the Notice

of Default is sent by certified and regular mail to new owners and all junior lien holders to the Deed of Trust being foreclosed. A Trustee’s Sale Guarantee Report is ordered from the title company providing all title information. The foreclosure remains dormant for the next 60 days unless the borrower makes contact to cure.

Publication Period

The publication period begins once the redemption period has expired. A Notice of Trustee’s

Sale is prepared and published in an adjudicated paper of general circulation in the city in which

the property is located. The Notice of Trustee’s Sale is published one time per week for three weeks. The actual Sale is established by adding at least 20 days to the date that the Notice of Trustee’s Sale was first published in the newspaper. The Notice of Trustee’s Sale is posted on the property and in a public place. At least 14 days period to Sale date the Notice of Trustee’s Sale must be recorded in the county in which the property is located.

Trustee’s Sale

On the day that was established for sale of the property, and only after all publication period

requirements have been met, the property is sold to the highest bidder for cash for the full amount of the debt plus foreclosure fee and expenses. If no one bids at the Trustee’s Sale, the property automatically reverts back to the beneficiary for the debt. A Trustee’s Deed Upon Sale

is recorded in the county in which the property is located transferring title to the foreclosing

beneficiary allowing the marketing of the property to recover their debt.

All sales under a power of sale in a deed of trust will be made between the hours of

9:00 a.m. and 5:00 p.m. on any business day, Monday through Friday, at the time specified in the

notice of trustee sale. The sale must be made a public auction to the highest bidder. The trustee has the right to require every bidder to show evidence of

ability to pay the full bid in cash, cashier’s check or certain bank checks. Each bid is by law an irrevocable offer to purchase. However, a higher bid cancels an earlier bid. It is unlawful and a criminal offense (a fine of $10,000 or up to one year in jail) to

offer anyone consideration not to bid, or to fix or restrain the bidding process in any manner. Debtors may reinstate up to five days before non-judicial foreclosure sale. Junior lien holders may no longer redeem, so they may try to protect themselves by

(1) advancing funds to bring the senior loan payments current, then foreclosing for the sums

advanced; (2) bidding at the foreclosure sale so the price will be sufficient to payoff the senior

and the junior liens; or (3) acquire the property by bidding at the foreclosure. If the debtor has a

right to redeem and does so, the junior who purchased the home must be reimbursed. Junior

liens do not reattach the property if a borrower redeems a senior lien whose foreclosure

extinguished the junior. This helps borrowers by encouraging the junior to bid up to the property

to fair market value at the foreclosure sale, or else lose out, giving borrowers closer to fair value

at sale. Lenders may not seek a deficiency judgment if (1) the foreclosure is non-judicial or if

(2) foreclosure is on a purchase money obligation. The same rules do not apply to guarantee or

later lien holders. The lenders may seize alternative collateral. If the lender forecloses by filing a

lawsuit, then the lender can obtain both a foreclosure sale order and a judgment against the

borrower for a deficiency after the courtordered sale, but only for the difference between the

judgment and the fair value of the security.

VA Loans

An appraisal should be ordered through an authorized VA appraiser 60 days from the recording

of the Notice of Default. A completed VA567 from should be sent to the local VA office with a

copy of the Notice of Trustee’s Sale and Trustee’s Sale Guarantee once publication of the Notice

of Trustee’s Sale has begun. A Corporation Grant Deed should be prepared conveying title from

the foreclosing beneficiary to the proper governmental agency.

FHA Loans

A Notice to Occupant of Pending Acquisition should be mailed to mortgagee with a copy of the

cover letter to the local FHA office. A Corporation Grant Deed should be prepared conveying title

from the foreclosing beneficiary to the proper governmental agency. If the property is occupied,

an eviction process must be started to convey the title to FHA unoccupied. Once eviction

complete, record Corporation Grant Deed and issue title package to FHA for Title Approval

Record Corporation Grant Deed and issue FHA 27011 Part A.

*Courtesy of National Foreclosure Professionals and California State Statutes

Colorado*

Colorado is a Non-Judicial State

Notice of Sale

The public trustee, within twenty days after the date of the first publication of the notice of sale,

shall mail a copy of such notice as it appeared in a newspaper of general circulation to the grantor at the address given in the deed of trust, and the public trustee shall also mail a like notice to each person who appears to have acquired a record interest in the property described in such notice of sale subsequent to the recording of such deed of trust, whether by deed, mortgage, judgment, or any other instrument of record, and, if the foreclosing party has a lien with

priority over the lessee or lessees who have unrecorded possessory interests in the property

being foreclosed and desires to terminate such possessory interests with the foreclosure, as

evidenced by the inclusion of the names of the lessee or lessees or the occupant or occupants in

the list supplied the public trustee pursuant to subsection (1) of this section, the public trustee

shall also mail such a notice to the lessee or lessees of the premises as provided in section 38-

38-305 (1.5). Such notice shall be mailed to such person at the address given in the recorded

instrument, or, if such notice is being sent to the lessee or lessees of the premises, such notice

shall be mailed as provided in section 38-38-305 (1.5). Postage costs under this section shall be

part of foreclosure costs. If such recorded instrument does not give such address or if only the county and state are given as the address of such person, it will not be necessary to mail any notice to such person. It is not necessary to mail a copy of said printed notice to any person whose interest does not appear of record at the time said notice of election and demand for sale is recorded.

Announcement at public trustee’s sale.

At any foreclosure sale by a public trustee, the public trustee shall be required to read only the

public trustee’s number of the proceeding for the sale, the name of the grantor, the street

address, if known, and legal description of the property, the name of the owner of the evidence of

debt, the date of the sale, the date on which the notice was issued, and the first and last publication dates of the notice. In lieu of reading the legal description, the public trustee may display the legal description to those present at the sale.

Combined notice of right to cure and right to redeem

Within twenty days after the recording of the notice of election and demand for sale by the public,

or not less than sixteen nor more than twenty-five days after the entry of a decree of foreclosure

or the issuance of a writ of execution directing the sheriff to sell real property, the public trustee or sheriff shall mail a notice to the grantors of the deed of trust or mortgage being foreclosed, to any subsequent owners of the property being foreclosed, to the current owner of the property being sold, and to any other person having a right to cure a default or a right to redeem the property subject to foreclosure such notice shall contain:

1. The names of the grantors of the deed of trust or mortgage and the original beneficiaries or

grantees thereof;

2. The name of the current owner of an evidence of debt secured by the deed of trust or mortgage

being foreclosed or the owner of the lien being foreclosed;

3. A statement that the notice of intention to redeem shall be filed at least fifteen calendar days

prior to the end of the owner’s redemption period;

4. A statement that the notice of intent to cure shall be filed at least fifteen calendar days prior to the date upon which the foreclosure sale is set; and

5. The names, addresses, and telephone numbers of the attorneys, if any, representing the

foreclosing lienor.

The combined notice required shall be mailed to those persons who have a right to cure or redeem pursuant to an instrument evidencing such right which was recorded with the county clerk and recorder of the county in which said property is located subsequent to the recording of the deed of trust, mortgage, or other lien being foreclosed and prior to the recording of the notice of election and demand for sale or notice of commencement of the pending foreclosure action (lis

pendens). Such combined notice shall be mailed to such persons at their respective addresses shown in the recorded instruments through which their rights to cure or redeem are derived. Postage costs under this section shall be part of the foreclosure costs.

Court order authorizing sale mandatory.

In all cases of foreclosure of property by the public trustee pursuant to a power of sale contained

in a deed of trust, the owner of an evidence of debt secured thereby shall obtain an order

authorizing sale from a court properly having jurisdiction to issue the same. Such order shall be

dated, or recite that the hearing was completed, on or before the day prior to the last day on which an effective notice of intention to cure may be filed with the public trustee. In no event shall the public trustee sell the subject property prior to the issuance of such an order authorizing the sale.

Written bid required -form of bid.

The owner of an evidence of debt secured by a deed of trust, mortgage, or other lien being foreclosed in accordance with the provisions of this article and article 37 of this title, or the attorney or agent for such owner or holder, shall submit, before 12 noon on or before the day prior to the date of sale, a written bid to the public trustee or sheriff as provided in this section. The owner of such evidence of debt shall bid at least such owner’s good faith estimate of the fair market value of the property being sold (less the amount of unpaid real property taxes and all amounts secured by liens against the property being sold which are senior to the lien being foreclosed and less the estimated reasonable costs and expenses, net of income, of holding, marketing, and selling such property); except that such owner need not bid more than the amount due under such evidence of debt as itemized on the written bid pursuant to subsection (2) of this section. The failure of the owner of such evidence of debt to bid at least such owner’s good faith estimate of the fair market value of the property being sold shall not affect the validity of such

foreclosure sale but may be raised as a defense by any person sued on a deficiency. Such owner

or his attorney or agent need not personally attend the foreclosure sale. If such written bid is not

timely submitted, the public trustee or sheriff shall continue the sale no longer than two

weeks and shall announce the continuance at the time and place designated for the sale.

1. Any written bid submitted to the public trustee or sheriff shall be signed by such owner or by

the attorney for such owner and shall set forth an itemization of all amounts due under the

evidence of debt and deed of trust, mortgage or other lien being foreclosed, and all costs and expenses allowable by the evidence of debt, deed of trust, mortgage, or other lien being foreclosed, reasonable attorney fees, and costs incurred by such owner or the attorney for such owner in enforcing the owner’s lien or in defending, protecting, and insuring the owners interest in the foreclosed property or any improvements located thereon.

Bids shall be in substantially the following form:

BID

To:

__________________________________________________________

__________________________________________________________

(Public Trustee)*(Sheriff)* of the County of, State of Colorado.

Date:

, whose mailing address is, bids the sum of $_in your Sale No. to be held on the day

of, 20.

The following is an itemization of all amounts due the owner of the evidence of debt

secured by the (deed of trust) (mortgage) (lien) being foreclosed. (Inapplicable

items may be omitted):

$__________

___________

___________

___________

___________

___________

___________

___________

___________

___________

___________

___________

___________

Principal

Interest

Late charges

Less Impound account credit

Plus impound account deficiency

Title or abstracting charges

Docket fee Appraisal fee

Statutory notice costs

Postage

Photocopies

Attorney fees

Telephone charges

Insurance premiums

Other (describe):

Total due holder ________________

(Public Trustee’s)*(Sheriff’s)* fees and costs ___________

Publication costs _____________

Total ________________

Bid _________________

Deficiency __________________

I enclose herewith the following:

1. Order authorizing sale. =

2. Check to your order in the sum of $_covering the balance of your fees.

3. Other: .

Please send us the following:

1. Original Certificate of Purchase.’*

2. Promissory Note (with deficiency noted thereon). ‘*

3. Refund Check for overpayment of (Public Trustee’s)*(Sheriff’s)* costs if any.

4. Other: .

‘*Delete as case may be.

Name of foreclosing party, agent, or attorney

By: ______________________

Address: ______________________

Telephone: ______________________

The public trustee or sheriff shall enter such bid by reading the bid amount set forth on the written

bid and the name of the person or entity who submitted such bid. Bids submitted pursuant to this section may be withdrawn or amended by any person authorized to submit a bid in writing, prior to the date specified in said subsection or orally, at the time of

sale. If a bid is modified orally at the time of sale, the person making such bid shall immediately

note such modification on the written itemization thereof and re-execute same.

Fees charged against grantor.

All fees, charges, and costs of every kind and nature incurred under the provisions of articles 37 to 39 of this title shall be an expense of the foreclosure sale chargeable as additional amounts owing under the deed of trust, mortgage, or other lien beingforeclosed. Such amounts shall be deducted from the proceeds of any foreclosure sale, or, if there are not cash proceeds at such sale adequate to pay such amounts, to the extent of such inadequacy, such amounts shall be paid by the owner of the evidence of debt secured by the deed of trust, mortgage, or other lien being foreclosed. The public trustee or sheriff may require that the owner of the evidence of debt secured by the

deed of trust, mortgage, or other lien to be foreclosed deposit with the public trustee or sheriff at the time the notice of election and demand for sale is filed with the public trustee or the time the order of foreclosure is delivered to the sheriff a deposit of three hundred dollars, which shall be applied against the fee and expenses of the public trustee or sheriff described in this section.

Date of foreclosure sale.

Whenever property is to be sold by virtue of the foreclosure of any mortgage, deed of trust, or

other lien, whether through the public trustee or through court, the date fixed for such sale shall

be:

1. In the case of a sale by the public trustee, not less than forty-five days nor more than sixty

days, or such longer period as provided in the deed of trust, after the date of recording of the

notice of election and demand; and

2. In the case of a foreclosure through the court, not less than forty-five days after the date of

commencement of the action to foreclose.

In case of a publication of an erroneous notice of sale in connection with a public trustee foreclosure, the sale may be postponed to a date subsequent to the expiration of the sixty-day period prescribed in subsection of this section but in no event to a date later than thirty days after the fifth correct publication of the corrected notice of sale.

*Courtesy of Colorado State Statutes

Connecticut*

Connecticut is a Judicial State.

Connecticut has two distinct types of judicial foreclosures: Strict Foreclosure and

Foreclosure By Sale.

Timeline

Day 150 Day 180

Day 30

Day 15 Day 90

Day 75

Day1

Judicial Foreclosure Steps

Lis Pendens is recorded and Complaint for Foreclosure is served on mortgagors and all parties

claiming an interest in the property (defendants) at least 12 days before the Complaint is filed

with the Court on the “Return Date” (Day 30). If the whereabouts of defendants can not be

determined, multiple newspaper publications may be required by the Court.

From Return Date, in-state defendants have 2 days to file an Appearance, out-of state defendants have 90 days unless actual knowledge of action can be proved. If Appearance is Pro-Se, defendant has 15 days to Answer. If Appearance is by Counsel, defendant has 5 days to file a Disclosure of Defense following the filing of a Demand for Disclosure of Defense by the plaintiff. Several “waves” of Default Motions are usually required before they are all granted and the case claimed for judgment (Day 75).

Judgment of Strict Foreclosure is typically entered (Day 90) by the Court if there is no equity in

the property above the debt being foreclosed. There is no sale. The mortgagor is given a law date by which he must payoff the debt or lose his interest. All other defendants are also given law dates. Upon failure of payment, title automatically vests in the foreclosing mortgagee on the “vesting date” (Day 150). The period between judgment and the vesting date is the redemption period and is discretionary with the judge. Hardship cases may prolong the redemption period.

Judgment of Foreclosure by Sale is typically entered by the Court if there is equity in excess of the debt being foreclosed (or if there is a federal lien). The length of the redemption period between judgment and sale date varies in the discretion of the judge. Confirmation of Sale takes

at least 30 days (Day 180).

Tenants whose identities are known and who are served at the onset of the foreclosure

action may be ejected by obtaining an Order of Ejectment in the foreclosure action. Tenants whose identities are not known must be served in a separate

Summary Process Action. Deficiency Judgment for the difference between the total debt and the appraised value of the property may be obtained only if a Motion for Deficiency Judgment is filed within 30 days after title vests in the foreclosing mortgagee in a Strict Foreclosure. In a Foreclosure by Sale, a deficiency judgment may similarly be obtained for the difference between the total debt and the net proceeds of Sale.

*Courtesy of National Foreclosure Professionals and Connecticut State Statutes

Delaware*

Delaware is a judicial state.

Lenders in Delaware are given a number of options in which they may pursue judicial

foreclosure, but the most commonly used procedure is the Scire Facias. This proceeding is quite different from other judicial foreclosures because instead of the lender having to prove the borrower is in default of the mortgage, the borrower has to prove he isn’t.

Although the suit to obtain an order for foreclosure is filed by the lender, the borrower must appear in court within twenty (20) days of being served a writ to provide evidence as to why the foreclosure should not take place. Unless the court is satisfied with the borrowers explanation and evidence, they will authorize a foreclosure sale. Said sale must be conducted by the sheriff and held either at the courthouse or at the property itself at least fourteen (14) days after the notice of sale is posted on the property and in other public places throughout the county in which it is located. The buyer has no right of redemption once the court has confirmed the sale.

*Courtesy of Delaware State Statutes

Florida*

Florida is a Judicial State

Equity

All mortgages shall be foreclosed in equity. In a mortgage foreclosure action, the court shall

sever for separate trial all counterclaims against the foreclosing mortgagee. The foreclosure claim shall, if tried, be tried to the court without a jury.

Legal notice concerning foreclosure proceedings

Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is

required to be placed in a newspaper, it is the responsibility of the petitioner or petitioner’s

attorney to place such advertisement, publication, or notice. The advertisement, publication, or notice shall be placed directly by the attorney for the petitioner, by the petitioner if acting pro se, or by the clerk of the court.

Order to show cause; entry of final judgment of foreclosure; payment during foreclosure

(1) After a complaint in a foreclosure proceeding has been filed, the mortgagee may request an

order to show cause for the entry of final judgment and the court shall immediately review the

complaint. If, upon examination of the complaint, the court finds that the complaint is verified and

alleges a cause of action to foreclose on real property, the court shall promptly issue an order directed to the defendant to show cause why a final judgment of foreclosure should not be entered.

(a) The order shall:

1. Set the date and time for hearing on the order to show cause. However, the date for the hearing may not be set sooner than 20 days after the service of the order. When service is obtained by publication, the date for the hearing may not be set sooner than 30 days after the first publication. The hearing must be held within 60 days after the date of service. Failure to

hold the hearing within such time does not affect the validity of the order to show cause or the jurisdiction of the court to issue subsequent orders.

2. Direct the time within which service of the order to show cause and the complaint must be made upon the defendant.

3. State that the filing of defenses by a motion or by a verified or sworn answer at or before the hearing to show cause constitutes cause for the court not to enter the attached final judgment.

4. State that the defendant has the right to file affidavits or other papers at the time of the hearing

and may appear personally or by way of an attorney at the hearing.

5. State that, if the defendant files defenses by a motion, the hearing time may be used to hear

the defendant’s motion.

6. State that, if the defendant fails to appear at the hearing to show cause or fails to file defenses

by a motion or by a verified or sworn answer or files an answer not contesting the foreclosure, the

defendant may be considered to have waived the right to a hearing and in such case the court may enter a final judgment of foreclosure ordering the clerk of the court to conduct a foreclosure

sale.

7. State that if the mortgage provides for reasonable attorney’s fees and the requested attorney’s fees do not exceed 3 percent of the principal amount owed at the time of filing the complaint, it is unnecessary for the court to hold a hearing or adjudge the requested attorney’s fees to be reasonable.

8. Attach the final judgment of foreclosure the court will enter, if the defendant waives the right to be heard at the hearing on the order to show cause.

9. Require the mortgagee to serve a copy of the order to show cause on the mortgagor in the following manner: If the mortgagor has been served with the complaint and original process, service of the order

may be made in the manner provided in the Florida Rules of Civil Procedure. If the mortgagor has not been served with the complaint and original process, the order to show cause, together with the summons and a copy of the complaint, shall be served on the mortgagor in the same manner as provided by law for original process. Any final judgment of foreclosure entered under this subsection is for in rem relief only.

Nothing in this subsection shall preclude the entry of a deficiency judgment where otherwise

allowed by law.

(b) The right to be heard at the hearing to show cause is waived if the defendant, after being

served as provided by law with an order to show cause, engages in conduct that clearly shows

that the defendant has relinquished the right to be heard on that order. The defendant’s failure

to file defenses by a motion or by a sworn or verified answer or to appear at the hearing duly scheduled on the order to show cause presumptively constitutes conduct that clearly shows that the defendant has relinquished the right to be heard. If a defendant files defenses by a motion or by a verified or sworn answer at or before the hearing, such action constitutes cause and precludes the entry of a final judgment at the hearing to show cause.

(c) In a mortgage foreclosure proceeding, when a default judgment has been entered against

the mortgagor and the note or mortgage provides for the award of reasonable attorney’s fees, it is unnecessary for the court to hold a hearing or adjudge the requested attorney’s fees to be reasonable if the fees do not exceed 3 percent of the principal amount owed on the note or mortgage at the time of filing, even if the note or mortgage does not specify the percentage of the original amount that would be paid as liquidated damages.

(d) If the court finds that the defendant has waived the right to be heard as provided in paragraph (b), the court shall promptly enter a final judgment of foreclosure. If the court finds that the defendant has not waived the right to be

heard on the order to show cause, the court shall then determine whether there is cause not to enter a final judgment of foreclosure. If the court finds that the defendant has not shown cause, the court shall promptly enter a judgment of foreclosure.

(2) In an action for foreclosure, other than residential real estate, the mortgagee may request that the court enter an order directing the mortgagor defendant to show cause why an order to make payments during the pendency of the foreclosure proceedings or an order to vacate the premises should not be entered.

(a) The order shall:

1. Set the date and time for hearing on the order to show cause. However, the date for the hearing shall not be set sooner than 20 days after the service of the order. Where service is obtained by publication, the date for the hearing shall not be set sooner than 30 days after the first publication.

2. Direct the time within which service of the order to show cause and the complaint shall be made upon the defendant.

3. State that the defendant has the right to file affidavits or other papers at the time of the hearing

and may appear personally or by way of an attorney at the hearing.

4. State that, if the defendant fails to appear at the hearing to show cause and fails to file defenses by a motion or by a verified or sworn answer, the defendant may be deemed to have waived the right to a hearing and in such case the court may enter an order to make payment or vacate the premises.

Require the mortgagee to serve a copy of the order to show cause on the mortgagor in the following manner:

If the mortgagor has been served with the complaint and original process, service of the order may be made in the manner provided in the Florida Rules of Civil Procedure.

If the mortgagor has not been served with the complaint and original process, the order to

show cause, together with the summons and a copy of the complaint, shall be served on the mortgagor

in the same manner as provided by law for original process.

(b) The right to be heard at the hearing to show cause is waived if the defendant, after being

served as provided by law with an order to show cause, engages in conduct that clearly shows

that the defendant has relinquished the right to be heard on that order. The defendant’s failure

to file defenses by a motion or by a sworn or verified answer or to appear at the hearing duly scheduled on the order to show cause presumptively constitutes conduct that clearly shows that the defendant has relinquished the right to be heard, (c) If the court finds that the defendant has waived the right to be heard, the court may promptly enter an order requiring payment in the amount provided in paragraph (f) or an order to vacate.

(d) If the court finds that the mortgagor has not waived the right to be heard on the order to show

cause, the court shall, at the hearing on the order to show cause, consider the affidavits and other

showings made by the parties appearing and make a determination of the probable validity of the

underlying claim alleged against the mortgagor and the mortgagor’s defenses. If the court

determines that the mortgagee is likely to prevail in the foreclosure action, the court shall enter an

order requiring the mortgagor to make the payment described in paragraph (e) to the mortgagee

and provide for a remedy as described in paragraph (f). However, the order shall be stayed

pending final adjudication of the claims of the parties if the mortgagor files with the court a written

undertaking executed by a surety approved by the court in an amount equal to the unpaid

balance of the mortgage on the property, including all principal, interest, unpaid taxes, and insurance premiums paid by the mortgagee.

(e) In the event the court enters an order requiring the mortgagor to make payments to the mortgagee, payments shall be payable at such intervals and in such amounts provided for in the mortgage instrument before acceleration or maturity. The obligation to make payments pursuant to any order entered under this subsection shall commence from the date of the motion filed hereunder. The order shall be served upon the mortgagor no later than 20 days before the date specified for the first payment. The order may permit, but shall not require the mortgagee to take

all appropriate steps to secure the premises during the pendency of the foreclosure action.

(f) In the event the court enters an order requiring payments the order shall also provide that the

mortgagee shall be entitled to possession of the premises upon the failure of the mortgagor to

make the payment required in the order unless at the hearing on the order to show cause the court finds good cause to order some other method of enforcement of its order.

(g) All amounts paid pursuant to this section shall be credited against the mortgage obligation in

accordance with the terms of the loan documents, provided, however, that any payments made

under this section shall not constitute a cure of any default or a waiver or any other defense to the mortgage foreclosure action.

(h) Upon the filing of an affidavit with the clerk that the premises have not been vacated pursuant to the court order, the clerk shall issue to the sheriff a writ for possession which shall be governed by the provisions

*Courtesy of Florida State Statutes

Georgia*

Georgia is a non-judicial state.

Send Pre-Acceleration Letter if not sent by client

The FNMA security instrument requires 30 days written notice to the borrower that the loan will

be accelerated and foreclosure commenced. Usually this Letter is sent by the lender.

Send Acceleration/Demand Letter

This letter provides the borrower with 10 days in which to pay the entire debt without attorney fees being added pursuant to Georgia law and provides the borrower with a copy of the newspaper ad pursuant to Georgia law.

Send foreclosure ad to newspaper

Foreclosure ads must be published once a week for four weeks immediately preceding the foreclosure sale date.

Conduct foreclosure sale

Foreclosure sales may be held only on the first Tuesday of the month unless that day is New

Years Day or July 4 in which event, foreclosures are conducted on the following day. The

foreclosures must be conducted between 10:00 a.m. and 4:00

p.m.

File eviction if necessary

Eviction is judicial and generally takes about 30 days

*Courtesy of National Foreclosure Professionals and Georgia State Statutes

Hawaii*

Hawaii-Judicial State

Filing a complaint

The process begins with a demand letter. If default is not cured, a complaint is filed along with a notice of pendency of action. The mortgagor has 21 days to respond to the complaint or its automatic foreclosure.

Notice of Sale

The notice of intent to foreclose must be published once a week for 3 consecutive weeks, the

last publication cannot be less than 14 days before the day of sale, in a newspaper having a general circulation in the county in which the property is located. Notice must be posted on the premises not less than 21 days before the day of sale. Notice must state: The date, time, and place of the public sale, the description of the property, including the address, the name of the mortgagor and the borrower, the name of the lender, the amount owed on the property, the name of the trustee conducting the public sale, and the terms and conditions of the public sale.

Cure loan time

Up until 3 days before the sale, the borrower may cure the loan and stop the sale by paying the

debt, costs, and fees, incurred through the foreclosure process.

*Courtesy of Hawaii State Statutes

Idaho*

Idaho is a Non-Judicial State

MANNER OF FORECLOSURE –NOTICE –SALE

A trust deed may be foreclosed subsequent to recording notice of default as hereinbefore provided, and at least one hundred twenty (120) days before the day fixed by the trustee for the trustee’s sale, notice of such sale shall be given by registered or certified mail, return receipt requested, to the last known address of the following persons or their legal representatives, if any: The notice of sale shall set forth:

1 The names of the grantor, trustee and beneficiary in the trust deed.

2 A description of the property covered by the trust deed.

3 The book and page of the mortgage records or the recorder’s instrument

number where the trust deed is recorded.

4 The default for which the foreclosure is made.

5 The sum owing on the obligation secured by the trust deed.

6 The date, time and place of the sale which shall be held at a designated time after 9:00 a.m. and before 4:00 p.m., Standard Time, and at a designated

place in the county or one of the counties where the property is located. At least three(3)good faith attempts shall be made on different days over a period of not less than seven (7) days each of which attempts must be made at least thirty (30) days prior to the day of the sale to serve a copy of the notice of sale upon an adult occupant of the real property

in the manner in which a summons is served. At the time of each such attempt, a copy of the notice of sale shall be posted in a conspicuous place on the real property unless the copy of the notice of sale previously posted remains conspicuously posted. Provided, however, that if during such an attempt personal service is made upon an adult occupant and a copy of the notice is posted, then no further attempt at personal service and no further posting shall be

required. Provided, further, that if the adult occupant personally served is a person to whom the notice of sale was required to be mailed (and was mailed) pursuant to the foregoing subsections of this section, then no posting of the notice of sale shall be required.

A copy of the notice of sale shall be published in a newspaper of general circulation in each of

the counties in which the property is situated once a week for four (4) successive weeks,

making four (4) publishing’s in all, with the last publication to be at least thirty (30) days prior to

the day of sale. An affidavit of mailing notice of sale and an affidavit of posting (when required) and publication of notice of sale shall be recorded in the mortgage records in the counties in which the

property described in the deed is situated at least twenty (20) days prior to the date of sale. The sale shall be held on the date and at the time and place designated in the notice of sale. The trustee shall sell the property in one parcel or in separate parcels at auction to the highest bidder. Any person, including the beneficiary under the trust deed, may bid at the trustee’s sale. The attorney for such trustee may conduct the sale and act in such sale as the auctioneer of trustee. The trustee may postpone the sale of the property upon request of the beneficiary by publicly announcing at the time and place originally fixed for the sale, the postponement to a stated subsequent date and hour. No sale may be postponed to a date more than thirty (30) days subsequent to the date from which the sale is postponed. A postponed sale may itself be postponed in the same manner and within the same time limitations as provided in this subsection.

The purchaser at the sale shall forthwith pay the price bid and upon receipt of payment the trustee shall execute and deliver the trustee’s deed to such purchaser, provided that in the event of any refusal to pay purchase money, the officer making such sale shall have the right to resell or reject any subsequent bid as provided by law in the case of sales under execution. The trustee’s deed shall convey to the purchaser the interest in the property which the grantor had, or had the power to convey, at the time of the execution by him of the trust deed together

with any interest the grantor or his successors in interest acquired after the execution of such

trust deed. The purchaser at the trustee’s sale shall be entitled to possession of the property on the tenth

day following the sale, and any persons remaining in possession thereafter under any interest

except one prior to the deed of trust shall be deemed to be tenants at sufferance.

Whenever all or a portion of any obligation secured by a deed of trust which has become due by

reason of a default of any part of that obligation, including taxes, assessments, premiums for

insurance or advances made by a beneficiary in accordance with the terms of the deed of trust,

the grantor or his successor in interest in the trust property or any part thereof, or any beneficiary

under a subordinate deed of trust or any person having a subordinate lien or encumbrance of

record thereon, at any time within one hundred fifteen (115) days of the recording of the notice of

default under such deed of trust, if the power of sale therein is to be exercised, or otherwise at

any time prior to the entry of a decree of foreclosure, may pay to the beneficiary or their

successors in interest, respectively, the entire amount then due under the terms of the deed of

trust and the obligation secured.

*Courtesy of Idaho State Statutes

Illinois*

Illinois is a Judicial State

Notice of Judgment

At least 30 days prior to the entry of a judgment of foreclosure, any person identified in the affidavit shall be given a notice of the foreclosure. A notice of foreclosure, whether the foreclosure is initiated by complaint or counterclaim, shall be constructive notice of the pendency of the foreclosure to every person claiming an interest in or lien on the mortgaged real estate, whose interest or lien has not been recorded prior to the recording of such notice of foreclosure. Such notice of foreclosure must be executed by any party or any party’s attorney and shall include the

names of all plaintiffs and the case number, the court in which the action was brought, the names

of title holders of record, a legal description of the real estate sufficient to identify it with

reasonable certainty, a common address or description of the location of the real estate and

identification of the mortgage sought to be foreclosed.

Notice of Sale.

The notice of sale shall include at least the following information,:

The name, address and telephone number of the person to contact for information regarding

the real estate, the address of the property, a legal description of the property, a description of

the improvements, the time and place of sale, the times specified in the judgment, the case

title, number, and court which the foreclosure was filed, and terms of the sale.

The notice of sale shall be published at least 3 consecutive calendar weeks (Sunday through

Saturday), once in each week, the first such notice to be published not more than 45 days prior to

the sale, the last such notice to be published not less than 7 days prior to the sale, by: (A) advertisements in a newspaper circulated to the general public in the county in which the real estate is located, in the section of that newspaper where legal notices are commonly placed and (6) separate advertisements in the section of such a newspaper, which (except in counties with a population in excess of 3,000,000) may be the same newspaper, in which real estate other than real estate being sold as part of legal proceedings is commonly advertised to the general public; provided, that the separate advertisements in the real estate section need not include a legal

description and that where both advertisements could be published in the same newspaper and that newspaper does not have separate legal notices and real estate advertisement sections, a single advertisement with the legal description shall be sufficient; and (ii) such other publications

as may be further ordered by the court.

The party who gives notice of public sale shall also give notice to all parties in the action who

have appeared and have not theretofore been found by the court to be in default for failure to plead. Such notice shall be given in the manner provided in the applicable rules of court for service of papers other than process and complaint, not more than 45 days nor less than 7 days prior to the day of sale. After notice is given as required in this Section a copy thereof shall be filed in the office of the clerk of the

court entering the judgment, together with a certificate of counselor other proof that notice has been served in compliance with this Section. Notice of the sale may be given prior to the expiration of any reinstatement period or redemption period. No other notice by publication or posting shall be necessary unless required by order or rule of the court.

The person named in the notice of sale to be (e) Receipt upon Sale. Upon and at the sale of

mortgaged real estate, the person conducting the sale shall give to the purchaser a receipt of sale. The receipt shall describe the real estate purchased and shall show the amount bid, the amount paid, the total amount paid to date and the amount still to be paid therefore. An additional receipt shall be given at the time of each subsequent payment.

Certificate of Sale.

Upon payment in full of the amount bid, the person conducting the sale shall issue, in

duplicate, and give to the purchaser a Certificate of Sale. The Certificate of Sale shall be in a

recordable form, describe the real estate purchased, indicate the date and place of sale and

show the amount paid therefore. The Certificate of Sale shall further indicate that it is subject

to confirmation by the court. The duplicate certificate may be recorded in accordance with

Section 12-121. The Certificate of Sale shall be freely assignable by endorsement thereon. Interest after Sale. Any bid at sale shall be deemed to include, without the necessity of a court order, interest at the statutory judgment rate on any unpaid portion of the sale price from the date of sale to the date of payment.

*Courtesy of Illinois State Statutes

Indiana*

Indiana is a Judicial State

Judgment Rendered

If the court finds that the mortgaged real estate is residential real estate and has been abandoned, a judgment or decree of sale may be executed on the date the judgment of foreclosure or decree of sale is entered, regardless of the date the mortgage is executed. A judgment and decree in a proceeding to foreclose a mortgage that is entered by a court

having jurisdiction may be filed with the clerk in any county. After the period set forth expires, a person who may enforce the judgment and decree may file a praecipe with the clerk in any county where the judgment and decree is filed, and the clerk shall promptly issue and certify to the sheriff of that county a copy of the judgment and decree under the seal of the court. Upon receiving a certified judgment, the sheriff shall, sell the mortgaged premises or as much of the mortgaged premises as necessary to satisfy the judgment, interest, and costs at public auction at the office of the sheriff or at another location that is reasonably likely to attract higher competitive bids. The sheriff shall schedule the date and time of the sheriff’s sale for a time certain between the hours of 10 a.m. and 4 p.m. on any day of the week except Sunday.

Notice of Sale

Before selling mortgaged property, the sheriff must advertise the sale by publication once each

week for three (3) successive weeks in a daily or weekly newspaper of general circulation. The

sheriff shall publish the advertisement in at least one (1) newspaper published and circulated in

each county where the real estate is situated. The first publication shall be made at least thirty

(30) days before the date of sale. At the time of placing the first advertisement by publication,

the sheriff shall also serve a copy of the written or printed notice of sale upon each owner of the

real estate. Service of the written notice shall be made as provided in the Indiana Rules of Trial

Procedure governing service of process upon a person. The sheriff shall charge a fee of ten

dollars ($10) to one (1) owner and three dollars ($3) to each additional owner for service of

written notice under this subsection. The fee is:

(1) a cost of the proceeding;

(2) to be collected as other costs of the proceeding are collected; and

(3) to be deposited in the county general fund for appropriation for operating expenses of the

sheriff’s department.

The sheriff also shall post written or printed notices of the sale in at least three (3) public places

in each township in which the real estate is situated and at the door of the courthouse of each

county in which the real estate is located. If the sheriff is unable to procure the publication of a

notice within the county, the sheriff may dispense with publication. However, the sheriff shall

state that the sheriff was not able to procure the publication and explain the reason why

publication was not possible.

Sheriff’s sale

A sheriff shall offer to sell and sell property on foreclosure in a manner that is reasonably likely

to bring the highest net proceeds from the sale after deducting the expenses of the offer and

sale.

*Courtesy of Indiana State Statutes

Iowa*

Iowa is a Judicial State

They file a petition and application for a receiver. The delinquent homeowner has 21 days to file

an answer. There is a hearing on the motion of judgment, the ruling on the motion, and finally

the execution.

Notice of Sale

Notice of the sale must be posted in at least three public places of the county, one of which shall

be at the county courthouse. In addition, there shall be two weekly publications of such notice in

a local newspaper printed in the county, with the first publication being at least four weeks before

the date of sale, and the second publication a least one week before the date of sale. If the borrower occupies the property, the notice must be served to them at least twenty days prior to the date of the sale. Notice of sale shall include time, date and place of sale. The sale must occur at public auction, between 9:00 am and 4:00 pm and the time must be

stated clearly in the notice of sale. The sheriff shall receive and give a receipt for a sealed

written bid submitted prior to the public auction. The sheriff may require all sealed written bids to

be accompanied by payment. The sheriff must keep all written bids sealed until the

commencement of the public auction, at which time the sheriff will open and announce the

written bids.

*Courtesy of Iowa State Statutes

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