Firstly let's analyze what is foreclosure? Foreclosure is also known in Australia and New Zealand as mortgagee sale or mortgagee auctions.

Foreclosure is a legal term used when the lender or lienholder gets a court ordered termination of a mortgagors equitable right of redemption. Or in
other words the borrower has defaulted on mrtgage repayments with the lender, breaking the agreement - mortgage or deed of trust - held between the lender and borrower.

The process to foreclose does vary from state to state and is usually only undertaken when all other avenues available to the lender have been exhausted.

The loan can be as little as 90 days in arrears when a lender will start legal proceedings to foreclose on a property.

So it is very important if difficulties are being experienced that communication with the lender are undertaken. Often there are options
available to the lender to either refinance and spread the terms out over a longer period to reduce the amount per month liable or even undertake the sale of your property yourself. Any of these are better than going through a
foreclosure process as the only interest a lender has is for what's owing on the property not what equity there may be in the property.

So none of the above has happened so now we move onto the process of foreclosure; a notice of default will be issued by the lender and will be
recorded at the County Recorders Office in the district that the property is situated. At this point the is a reinstatement period - Pre-Foreclosure - where the default can be corrected , a period of up to three months allowed.

Once again if possible it is best if possible to rectify the situation at this point in time.If not then a Notice of Sale is issued and the property eventually goes to auction, with the starting bid being the amount that will clear the property of all outstanding debts. If there is no other bids the property title is signed over to the lender who will try and sell it at a later date. The owner may still be responsible for some debt once this happens. If there are other bidders the highest bid then wins the property title clear of any liens, and any excess funds after the lenders have taken what is owing to them get passed to the former owner.