• The borrower makes an arrangement with the lender to pay off the default amount to reinstate the loan (otherwise known as forbearance).
• The borrower sells the property during the pre-foreclosure period. If the borrower sells the property during this stage, he will avoid having a defaulted loan on his credit history.
• Once the lender is awarded final judgment by the courts the lender will sell the property at public auction.
• If the property is not sold at auction or the bank purchases the property at auction, the lender gains possession of the property.

2. How do lenders foreclose on properties?
Every State has different laws regarding the foreclosure process. Although every State does have their own foreclosure procedures, there are two steps in the foreclosure process that lenders use to foreclose on properties that are consistent nationwide:

• The lender must record a NOD (Notice of Default) with the courts or file a lawsuit against the property owner.
• Once the notice of default (also known as Lis Pendens) is filed or is pending, the property owner is given an opportunity to make up the payments with penalty. It is during this period that the buyer has the opportunity to refinance their loan or sell their property.

3. What are the stages of foreclosure?

• Pre-foreclosure - this is the period of time when the first legal proceedings takes place by the lending institution against the property owner. It is during this period of time that the property owner has a chance to settle their mortgage debt. The property owner can sell the property during this period. If the property is sold during this stage, the owner can avoid having a defaulted loan on their credit history.
• Foreclosure Auction - If the debt is not settled and the lender is awarded final judgment by the courts, the lender will sell the property at public auction.
• Real Estate Owned Property (REO) - If the property is not sold at auction, the lender regains possession of the property.

4. Who can buy a foreclosure?
Anyone! If you have the cash or can qualify for a mortgage, you can buy a Lender-owned property. Buying a foreclosure is just like buying any other property.

5. Can I buy a foreclosure as an Investment?
Yes. Foreclosure properties listed on americanforeclosures.com are available to all buyers, including investors.

6. How can I find out which foreclosure properties are for sale?
Right here!

7. How do I get more information about the foreclosure properties that are for sale?
Most of the foreclosure properties listed on AmericanForeclosures.com provide the name, address and email of the listing agent. If you are a potential buyer, please contact the appropriate listing agent directly. Sometimes, the contact information for the listing agent is not available.

8. How do I buy foreclosed property?
Start right here. American Foreclosures is your one-stop-resource for all the information that you need to buy foreclosures. At AmericanForeclosures.com, you will find a nationwide database of foreclosure listings

9. Do I need a real estate agent to buy a foreclosure property?
A real estate agent is needed to purchase government owned foreclosure property, but you don't need one to purchase REO properties or foreclosure auction properties. American Foreclosures does recommend that you find a real estate agent to help you through the buying process if you haven't purchased real estate before or if you don't want to do a lot of the legwork yourself. To find an agent, please contact the agent listed on the foreclosed property, or contact your local real estate broker.

10. What is a foreclosure auction?
Generally the foreclosure auction comes at the end of the foreclosure process when the homeowner can no longer repair their financial problems with the lender. As with any auction, the person with the highest bid gets the foreclosed property. Remember, if you are buying a home at a foreclosure property auction, you will be bidding against other investors and potential homebuyers. Do your homework in advance and know how much the property is worth, how much is still owed on the property and if there are any liens against the property.

11. What should I do before attending a foreclosure auction?
Familiarize yourself with the auction process. Go to the courthouse to observe the auction process before bidding on a foreclosed property.

• Know where the auction is taking place
• Research your State Foreclosure Laws
• Phone ahead and ask about any requirements needed for buying at the foreclosure auction
• Research the property
• Determine your bid amount

12. Will I be able to inspect the property before the auction?
You will not be able to inspect the property before the auction. Make sure you research the property that you intend to buy. Auction purchases are "as is" with no warranties given, no title insurance provided, and you must have your financing in order. You need to know as much as possible about the property you are bidding on before the auction takes place.

13. How is the opening bid at a foreclosure auction determined?
The opening bid at a foreclosure auction is based on the total amount owed to the foreclosing lender, interest incurred, late charges, penalties any liens placed on the property by other institutions, and may include fees incurred because of the foreclosure proceedings. If no one at the auction places a bid above the opening bid amount, the foreclosing lender gains possession of the property.

14. What are the bidding procedures?
Bidding procedures vary from State to State. Make sure you become familiar with the bidding procedures in your area before you start bidding at a foreclosure auction.

15. How much money do I need to bring to the foreclosure auction?
Some States require foreclosure auction bidders to bring the full amount they want to bid in the form of cash or a cashier's check to the auction. In other States, bidders are required to bring a percentage of the bid amount to the auction and pay the rest of the amount within 30 to 90 days. Because foreclosure procedures vary from State to State, be sure to familiarize yourself with the foreclosure process in your State.

16. What is "right of redemption?"
Homeowners who are facing foreclosure are given every opportunity to stop the process leading to foreclosure, however, even if the auctioneer's gavel comes down, many states offer an extended period of time when the homeowner can "redeem" his property. The amount of time varies by state, so be sure you know the laws. Properties listed on AmericanForeclosures.com are REO (real estate owned), meaning that the redemption date has passed, the bank owns the property, the title is clear and you won't need to worry about the previous homeowner coming back to claim your new home.

17. What is an REO?
An REO (Real Estate Owned) is a property that reverts back to the lender after an unsuccessful foreclosure auction. The bank now owns the foreclosure and the mortgage no longer exists. 18. How do banks sell REO's? Each bank or lender conducts its business in a different manner. The bank or lender's goal is to obtain the best price possible for the property they are selling. Most banks have separate departments that manage their REO inventory.

18. How do I find REO properties?
You can find REO properties right here.

19. How can I purchase REO properties?
Most of the REO properties listed on AmericanForeclosures.com provide the name and telephone number of the listing agent. If you are a potential buyer, please contact the appropriate listing agent directly. Occasionally, the contact information for the listing agent is not immediately available. Please check back as information is updated several times each day. If you need help finding a realtor, please try our Find a Realtor^R service.

20. Should I get pre-approved for a mortgage before buying an REO?
Yes!!! Pre-qualifying for a loan is important for a potential homebuyer because it helps ensure that the buyer is in a financial position to purchase a property, and it places the buyer in the strongest possible position to negotiate with the selling agent of the REO property. When a potential homebuyer already has pre-approved financing in-hand, negotiations with the REO selling agent and the lender go much smoother. Pre-approval gives you, the homebuyer, a concrete idea of what you can afford and shows the selling agent that you are serious about buying a home. To best prepare and know all there is to know, you should read our "How to Buy & Sell Foreclosures Guide."

21. What type of lender should I look for?
When buying REO property, the best type of lender to work with is one who understands the re-possession process. A knowledgeable lender can guide a homebuyer through any potential pitfalls that could crop up and ensure that the proper steps and procedures are being followed (such as ensuring that the property being purchased is FHA-compliant).