Foreclosure is a legal process that involves auction or sale of property (real estate) in the case of default in the mortgage payment. Foreclosures usually arise as a result of bankruptcy or financial distress of the borrower.

Whether you are a mortgage borrower or you want to invest in real estate through the purchase of foreclosed property, you will need to be conversant with the technical terms relating to it. This guide intends to cover some of the important key terms relating to foreclosure auctions, such as bankruptcy, mortgage, redemption and delinquency.

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Bankruptcy

Filing for bankruptcy is one of the tools used to avoid foreclosure. Though it may sound extreme to file for bankruptcy, it can help the property owner avoid the loss of the property or at least avoid the foreclosure proceedings for some time.

I recommend: To understand different legal clauses regarding bankruptcy, read through the glossary at Foreclosure University, an online resource for real estate investing.

Mortgage

A mortgage is an instrument that secures the repayment of a loan. In other words, mortgaging is the process through which a borrower takes a loan by collateralizing personal property.

I recommend: For information regarding mortgages, read through the glossary of technical terms at FrontDoor, a real estate listing site.

Non-judicial foreclosure

The non-judicial foreclosure process involves foreclosing a mortgage without filing a lawsuit or obtaining a court order. This is possible in cases where a deed of trust gives the lender the right to sell the property in case of default.

I recommend: You can read through the definition of non-judicial foreclosure at ForeclosureLaw.org.

Redemption period

Redemption period is the additional time given to the property owner to stay in the property. State laws specify the duration of redemption.

I recommend: You can find more information about redemption at U.S. Department of Housing and Urban Development.

Distressed property

A distressed property is a property available for sale at lower prices to relieve the owner from the financial crunch and risks of foreclosure. Generally, sale of distressed properties is a pre-foreclosure process.

I recommend: To learn more about distressed properties and related terms, refer to E-ForeclosureSearch.com, a property listing Web site.

Delinquency

Delinquency is an overdue loan payment for which the grace period is not over. Though the payment is late, it is still not a default payment.

I recommend: To understand more about this term, you can read through the description at ForeclosureFish.com.

Foreclosure auction listings are more commonplace during tough economic times. A silver lining to an increase in foreclosure auctions is that buyers can get great deals on houses if they know where and when to bid.

Need a foreclosure auction list for your town, or want to select someone from a local foreclosure auction directory? Start buy going online. If you want to purchase a house via a foreclosure auction provider, the Internet can help you:

1. Find a foreclosure auction provider in your area;

2. Keep you abreast of new foreclosure auction listings with free alert services;

3. Let you research properties and bid from the privacy of your own home at online foreclosure auctions.

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Find a foreclosure auction provider in your area

A handful of websites exist to provide you with a foreclosure auction directory for your state. This is a key first step to help you find a foreclosure auction.

I recommend: Reals is a great source of information for foreclosure listings and properties auctions directories. It includes nationwide search engines as well as local foreclosure auction providers. Foreclosurelistingsites provides a review and compares foreclosure listing services for you.

Use free alert services to get updates about new foreclosure auction listings

Free alert services give you the latest information about foreclosure auctions in your area. Some sites will also provide you with current trustee information that allows you to call auction locations and get details about reschedules, etc.

I recommend: Sign up for RealtyTrac's free trial. This will give you access to their alert and foreclosure auction search service. Foreclosure.com/ForeclosureFreeSearch lets you sign up for its free search service and receive daily e-mail listing alerts with no obligation.

Use online foreclosure auction websites to bid from the privacy of your own home

Online auctions are ideal if you like the idea of bidding from home or if you are considering an investment property in another part of the country. Online foreclosure auction websites allow you to view multiple properties nationwide and can save you time identifying properties that fit your investment needs.

I recommend: Bid4Homes has a large selection of houses, commercial property and land. Each listing comes complete with pictures and pertinent information to allow you to bid online for the property. Rowell Auctions is an example of a foreclosure auction provider that offers a selection of online foreclosure auctions in addition to other foreclosure auction inventory.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Familiarize yourself with critical foreclosure auction information before bidding. Foreclosure auction websites are a great way to learn the property's estimated market value, how much is owed and if there are other liens against it.
• •  Know your state's rules on buying at foreclosure auctions. In some states, ownership can be transferred immediately or within a few days. In others you may need to wait a month or more for the sale to be confirmed by a court. Still other states have redemption periods for the owner, in which case the owner can buy the property back.

Homes foreclosure and subsequent auctions come part and parcel with an economic downturn. If you are interested in a real estate investment opportunity, foreclosure auctions may be worth considering. With the proper foreclosure auction education and training, you will understand the ins and outs of the foreclosure cycle before and after a foreclosure auction, and be positioned to take advantage of buying real estate at prices well below market value.

There is a lot to understand where foreclosed homes auctions are considered. It is important to understand other details about the property ready to go up for foreclosure auction in addition to many steps that vary from state to state prior to a property being sold at an auction. These include an analysis of a property's real value, its condition and your rights as a foreclosure auction owner. Consider the following ways to obtain foreclosure auction education and training:

1. Receive your education online with programs that will walk you through the foreclosure auction process.

2. Subscribe to real estate newsletters to enhance your foreclosure auction education and training.

3. Blogs that banter about real estate foreclosure auctions are a great way to further your DIY education and training.

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Learn at your own pace with an online foreclosure auction education and training program

An online tutorial, whether in the form of a webinar or on a CD-Rom, allows you to deepen your foreclosure auction education and training at your own pace. Online learning is also beneficial in that you do not lose work productivity since you are learning during your down time.

I recommend: ForeclosureFreeSearch offers a downloadable webinar entitled "Outsmart Experts at Foreclosure Auctions and Win!" RealtyTrac offers several e-books and online training programs that cover several aspects of the foreclosure process including foreclosure auctions.

Subscribe to newsletters that share property foreclosure auction tips

Newsletters of any sort are wonderful in that they bring to light many issues and trends impacting a specific topic or subject matter. In the case of foreclosure auctions, issues and trends vary from locale to locale, and are timed to economic conditions. Subscribing to an e-newsletter will help keep your foreclosure auction education and training up to date.

I recommend: The Foreclosure Clues newsletter promises to share tips and secrets about the foreclosure auction process to its subscribers. NuWire's website and free newsletter offer tips about how to buy real estate at foreclosure auctions.

Read blogs that will further your knowledge of foreclosure education and training

Blogs are a great forum to expand your foreclosure auction education and training because, for the most part, they operate in real time. This means you are able to read the latest and greatest on the topic of foreclosure auctions, as well as read comments that fly back and forth between readers and authors.

I recommend: ForeclosureDataBank's blog discusses foreclosure trends in various states and includes entries that are of interest to those considering a foreclosure auction purchase for the first time. The Dow Jones Wall Street Journal Developments Blog discusses many aspects of housing and real estate. They also provide tips for heading to a foreclosure auction.

When it comes to learning about how a foreclosure auction occurs, it is imperative to familiarize yourself with the entire process. From how to deal with a foreclosure auction provider of lists, to how to make a successful bid at the courthouse. The process can be complex, but if done correctly you might save quite a bit of money on a property you'd like to purchase.

Take the time to learn about how to find a foreclosure auction and win it so that you can make a sound real estate investment. Here are some resourceful links to get you started. Think of your tutorial as "foreclosure auction for beginners."

1. Find a foreclosure auction list by searching through websites that specialize in foreclosure.

2. Find foreclosure auction information by reading articles on the general foreclosure process.

3. Learn the laws associated with foreclosures and a foreclosure auction in your state.

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The best contacts and resources to help you get it done

Locate a foreclosure auction list by searching foreclosure websites

There is a plethora of foreclosure geared websites on the Internet. They usually detail the current foreclosures by state, county and town. Other details provided will be items like at what stage of foreclosure the property is in, as well as the amount of the defaulted debt. Take the time to familiarize yourself with these foreclosure listings as they vary slightly from traditional real estate listings.

I recommend: Both HUD Foreclosed Homes and Foreclosure Net are examples of an expansive foreclosure auction directory. Simply plug in the area of the country you'd like to search and results will appear.

Learn about how a foreclosure auction operates by reading about the process

When a property goes into foreclosure, it means that the current owner has not paid their mortgage debt, taxes or other associated monies in a timely manner as associated by the lender agreement or tax statutes. Take the time to learn about the process that must occur before a home goes on the auction block. Also, learn about how to place a proper bid when seeking to secure a home from a foreclosure auction.

I recommend: Both of the websites for Realty Trac and Real Estate ABC give a general overview of the foreclosure auction process. It should be noted that the laws vary by state, county and town.

Educate yourself on the laws associated with a foreclosure auction within your state

Each state has a different set of statutes and laws associated with foreclosures. Be sure that you read the rules, regulations and laws for your state so that you know what the pre-foreclosure process entails and how to correctly place a bid on a home or property you wish to purchase for personal or business needs. Be sure to check these laws often as both federal and state statutes are constantly changing.

I recommend: Visit the websites for both Foreclosure University or Foreclosure Law.org for a state by state tutorial in foreclosure law and how it leads up to and integrates with foreclosure auctions in each state.