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Rancho Santa Margarita Foreclosure - What Exactly Does It Mean?

Posted by Leslie Eskildsen on Wednesday, January 13th, 2010 at 5:17pm.

There are currently eight Rancho Santa Margarita homes for sale that are flagged as "In Foreclosure Process" or "Notice of Default".  There are six more flagged as "REO/Lender Owned", and a whopping 88 homes listed as "Short Sale".  What exactly do all these terms mean?

What Does "In Foreclosure" Mean?

 

 

The Foreclosure Process

"Preforeclosure" is just a general term for homes that are in some stage of the following process before the actual Trustee's Sale:

1.  The home owner stops making payments on the mortgage.

2.  The lender files a "Notice of Default" (NOD), usually after 90 days or more.

3.  Another 90 days after filing the NOD, the lender can file a "Notice of Trustee's Sale".

4.  21 days after the Notice of Trustee's Sale, the home may be put up for public auction.

5.  The home may be sold at the auction - buyers must have cash for the purchase.

6.  If the lender's reserve price is not met at auction, ownership reverts to the lender with a "Trustee's Deed Upon Sale". 

7.  Eventually the lender will sell the home, either to investors or on the open market as an "REO" or "Bank Owned" home.

The Short Sale Option

A "Short Sale" is an option the home owners in distress can take in order to avoid foreclosure.  In this case, the owner sells the home for less than the balanced owed on the mortgage, with the lender's approval.

 

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