Foreclosure is the legal proceeding in which a bank or any other secured creditor sells or repossesses a parcel of real or immovable property due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is due to a default in payment of a promissory note, secured by a lien on the property.

The process of foreclosure is quite lengthy. Websites that connect individual borrowers and homeowners to individual lenders are increasingly used as mechanisms to bypass banks while meeting payment obligations for mortgage providers. The increase in the number of foreclosures in the United States has led to more loan listings that are designed to forestall or prevent foreclosure.

Having your financial situation enter an area where foreclosure is the only way out is certainly not the ideal outcome of any loan or home purchase. However, it does indeed come into play under some circumstances and when that happens, knowing who to contact and who can offer assistance during what can be a complicated and confusing time can be a difficult piece of information to uncover...[more]

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In the United States, there are two types of foreclosure in most of the law states. The bank claims the title and possession of the property back in full satisfaction of a debt, usually on contract using "strict foreclosure". In the proceeding known as foreclosure, the property is exposed to auction by the county sheriff or some other officer of the court. Many states require this latter sort of proceeding in some or all cases of foreclosure, for protecting any equity the debtor may have in the property, in case the value of the debt being foreclosed on is substantially less than the market value of the immovable property. In this foreclosure, at the auction the sheriff then issues a deed to the winning bidder. Banks and other institutional lenders usually bid in the amount of the owed debt at the sale, and if no other buyers step forward the lender receives title to the immovable property in return.

Other states have adopted non-judicial foreclosure procedures, in which the mortgagee, or the mortgagee's attorney or designated agent, gives the debtor a notice of default and the mortgagee's intent to sell the immovable property in a form that is prescribed by state statute. This type of foreclosure is referred to as "statutory" or "non-judicial" foreclosure. With this "power-of-sale" type of foreclosure, if the debtor fails to cure the default, or use other lawful means to stop the sale, the mortgagee or its representative will conduct a public auction in a similar manner as described above. The highest bidder at the auction becomes the owner of the immovable property free of any interest of the former owner but the property may be encumbered by any liens superior to the mortgage being foreclosed. Further legal action, such as an eviction may be important to obtain possession of the premises.

In most of thejurisdictions, it is customary for the foreclosing lender to obtain a title search of the immovable property and to notify all other persons who may have liens on the property, whether by contract, by judgment ,or by statute or other law, so that they may appear and assert their interest in the foreclosure litigation.. Therefore, it is necessary that the lender obtain a search of the local Federal Tax Liens so that if the persons or companies involved in the foreclosure have a federal tax lien filed against them, the proper notice to the IRS will be given.

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