Last week i mentioned that I wanted to help others in the Charlotte area Find Foreclosures in Charlotte. Today, I wanted to start from scratch and see if I can understand all the basics that surround the foreclosure process.

What is a Foreclosure?

Foreclosure is the legal process in which a lender or mortgage company takes legal ownership of the property that was used to secure a loan. Foreclosure is usually the result of the property owner, or person who secured the loan, failing to make the mortgage payments. The lender will ultimately earn a Decree of Foreclosure, which is a court order that then gives the lender the right to sell the property, to repay the outstanding debt.

What Is a Pre-Foreclosure?

After a Homeowner defaults, or fails to make the payments on a their mortgage loan, the lender must file a NOD, or Notice of Default in the county where the property is located. In Charlotte, that would be Mecklenburg County. This is also published in local newspapers, announcing the auction of the property.

The period of time between the NOD being published and the actual auction date of the property, is known as the Pre Foreclosure period. Many prospective buyers will contact the lender directly during the NOD, and try to secure the property before it goes to auction.

How is Foreclosed Property Sold?

If the property goes to full foreclosure, it will be sold at a public auction, usually at the same courthouse where the NOD was filed. Like all auctions, the foreclosure auctions usually draw large groups of investors, who will competitively bid on the foreclosure property.