Facts

The property owner is considered to be in default when he or she repeatedly misses loan payments, usually for a period of between three and six months. The lender then begins the foreclosure process by filing a notice of default with the county recorder's office.

Time Frame

If the property owner doesn't make good on the missed loan payments within three months of receiving the notice of default, a notice of sale is presented to the owner, and a sale date is established.

Features

The foreclosed property then is put up for auction at a trustee sale, with the property awarded to the highest bidder.

Types

If the auction doesn't garner a price higher than the opening bid, which usually is equal to the outstanding loan balance plus interest and fees, the property is considered "real estate owned," and the attorney conducting the auction will purchase the property for the lender.

Solution

Foreclosures can end with the owner making good on the loan and retaining the property, the owner selling the property to a third party to pay off the loan, a third party purchasing the property at a foreclosure auction or the lender reclaiming the property to sell it on the open market.

Source:

InvestorWords.com

BiggerPockets.com

RealtyTrac.com