and (4) after the foreclosure sale when the property belongs to a new owner who is either the foreclosing lender or another real estate investor.

Lets take a look at the foreclosure timeline in Texas. While your state may have a different foreclosure timeline, you will find the same buying opportunities available. Lets see where the four time periods or phases occur on the Texas foreclosure timeline. This will help you see where the four time periods occur on your states foreclosure timeline.

Texas Foreclosure Timeline

2 - 3 Months 20 Days Can Be 1 Day 21 Days Minimum

No Payments 1st 2nd Posting Sale

Official Official at 1st

Letter Letter Courthouse Tuesday

Phase 1: Before the Posting of the Notice of Default

Whether the posting is called a notice of default in the case of a deed of trust or a lis pendens in the case of a mortgage, this marks the official beginning of the foreclosure. Once the foreclosure process begins, it may lead to the forced sale of the owners property, the loss of their equity, and the resulting damage to their credit.

If you can make a deal with the owner before the commencement of legal action, you will help the owner reduce the negative effects of foreclosure. And you may find that you can obtain a better buy because there will be less competition from other real estate investors for the property prior to the public notice of default or the lis pendens being recorded at the county recorders office.

The drawback with trying to make a deal in this time period is that you may find that the owners are not as motivated as they will be in the next time periods. We have found that owners at this point are still clinging to the unrealistic hope that a financial miracle is going to happen.

Using the Texas foreclosure timeline, this is the time period up to the posting of the notice of default at the county courthouse. The owners are several months behind in their payments. Their lender may have already sent them a warning letter. The owners are starting to feel some

pressure. Your job is to show them that the pressure is only going to get more intense. If they act now with you, the pressure will dissipate.

Early Resolution Few borrowers intend to default on their loans. Sometimes economic developments beyond their control can create the situations leading to foreclosure. They may have been fired from their job. Their job may have disappeared. Interest rates may have increased on their adjustable rate mortgage and made their mortgage payments prohibitive.

Divorce, premature death, disability, illness, addiction, and accidents can all lead to foreclosure. Poor money management, like too much money in the stock market, can be a recipe for financial disaster. The result of the foreclosure can be embarrassing to the borrower, besides suffering the devastating financial consequences of losing their property and equity.

Early resolution of the pending foreclosure benefits the borrower and can produce better results for you as the real estate investor. Additionally, completing a transaction before the foreclosure period begins (once the posting occurs) can often avoid specific legislative guidelines that become restrictive on certain transactions.

Phase 2: After the Posting of the Notice of Default

Once the notice of default has been posted, there are a number of things for you to consider. First, there may be certain restrictions and legal requirements that your individual state may enforce when a property is officially in foreclosure. Second, once the notice of default is recorded, there is public knowledge of the default, and you will find you have competition from other real estate investors for the property.

Using the Texas foreclosure timeline, this is the time period after the posting of the notice of default and before the actual foreclosure sale. This can be a period of time as short as 21 days in Texas. Check with a title insurance company in your area to find out what the time period is in your state.

Legislative Requirements In California, once the notice of default is posted at the courthouse, you, as the real estate investor, have to comply with several state laws. These laws were enacted by the California legislature to protect homeowners from real estate investor sharks.

Unfortunately, as with many well-intentioned laws, this law has had unintentional negative effects. It has inhibited defaulting homeowners from being able to sell their homes to legitimate real estate investors who are trying to create a win-win situation for the defaulting homeowners and themselves. Yes, it may protect some defaulting homeowners from unscrupulous people. But it puts onerous restrictions on homeowners property rights.

California Foreclosure Timeline

2 - 3 Months 3 - 4 Weeks 3 Months 20 Days Next Day

No Payments 1st 2nd Posting Redeem Sale Official Official at Only

Letter Letter Courthouse

In California, if you are buying a property that is owner-occupied, and one- to four-dwelling units (a single-family up to a fourplex), and a notice of default has been posted against the property, you must include in your real estate purchase contract two notices required by California law.

You must include a five-day cancellation-of-contract notice and a notice informing the homeowners that they cannot be asked to sign a deed transferring title to their property to you until the five-day cancellation of-contract period expires. If you dont do this, the homeowners can come back against you and have the courts void your deal and impose fines and penalties against you.

NOTICE REQUIRED BY CALIFORNIA LAW

Until your right to cancel this contract has ended (buyer)

or anyone working for (buyer) CANNOT ask you to

sign or have you sign any deed or any other document.You may