Foreclosure is a process that allows a lender, (bank), to recover the amount owed on a defaulted loan by selling or taking ownership, (repossession) of the property securing the loan. The foreclosure process begins when a borrower, (homeowner), defaults on loan payments, (usually mortgage payments), and the lender files the necessary documents to begin the foreclosure proceedings.  Click to see active Irvine "Short Sales" - Subject to Lender Approval" homes.

Short sales are typically defined as transactions in which the lender agrees to accept less than the full amount due on a mortgage when a property is sold in order to avoid a lengthy and costly foreclosure process, and the consideration of new rules is in response to the growing share of short-sale and foreclosure transactions across the country. Short-sale transactions can lead to lower compensation for real estate professionals involved than they would receive in standard transactions.

In just about all foreclosure cases, the bank goes after the owner who they repossessed the home from, and tries to get back the money they were "shorted", (the difference between what they were owed, and the amount they were paid after the sale).

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

Here in CA, lenders hardly ever file a Notice of Default until the borrower is at least 60 days behind in making payments. After that's done, the lender must then wait 90 days, during which time the borrower has the right to make up the back payments and reinstate the loan. After 90 days, the lender is required to publish a notice in the newspaper for 20 days and then may sell the property to the highest acceptable bidder on the courthouse steps. If no acceptable bid is received, the trustee then conveys the property to the lender.  Click to get detailed listings of "Notice Of Default" homes. If you decide this is what you may want to buy, be patient because it's a long process.

The foreclosure process can end one of four ways:

1. The borrower, (homeowner), reinstates the loan by paying off the amount that's in default during a grace period, also known as pre-foreclosure.
2. The borrower, (homeowner), sells the property to someone else during the pre-foreclosure period. The sale allows the The borrower, (homeowner), to pay off the loan and avoid having a foreclosure on his credit report.
3. Someone else buys the home at an auction at the end of the grace period.
4. The bank repossesses the home, and gets a REALTOR® to sell it for them. The bank can either repossess the home by arrangement with the borrower, (homeowner) during the grace period, or by buying back the home at an auction. Properties repossessed by the bank are also known as bank-owned or REO properties (Real Estate Owned by the lender)