1) No earlier than the 32nd day and no later than the 60th day of delinquency the Mortgagee (holder of the lein) sends the pamphlet (HUD-PA-426) to homeowner "How to Avoid Foreclosure"
2) If the homeowner is interested in pursuing the Preforeclosure Sale, the mortgagee will them mail out an "Information/Disclosure" (HUD-90035) which provides information to the homeowner on housing counseling, disclosures and possible tax consequences.
3) The mortgagee requests financial documentation from the homeowner to evaluate whether or not they qualify for the Preforeclosure Sale. If they appear to qualify, a title search is done along with an appraisal and an "Approval to Participate" is sent to the homeowner. And here's the part that I really like that alleviates much of the guesswork: On that form, it will state at what price the property should be listed near or at, just how much the mortgagee needs to net from the deal and by what date the property must be sold.
For complete guidelines on this process directly from HUD, which will tell you way more than you really want to know, click here. It takes a while to open, so be patient.
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