Finding preforeclosures depends on whether your state uses the judicial foreclosure method or the nonjudicial foreclosure method.
For the most part, states that use deeds of trust have nonjudicial foreclosures. States that use mortgages have judicial foreclosures. Alabama is a hybrid state that uses mortgages with power of sale clauses, allowing nonjudicial foreclosures. A judicial foreclosure requires the filing of a lawsuit before the auction can occur. Nonjudicial foreclosure states do not have that requirement.
In judicial foreclosure states, the first public step leading up to foreclosure is filing a lis pendens notice. The lis pendens is a paper filed in the real estate records for the county or parish where the property is located. It puts the world on notice that there is a pending lawsuit that may ultimately affect the ownership of real estate. Lis pendens notices are not limited to foreclosures, but are used generically in all states whenever there is a dispute over title to real estate and a resulting lawsuit.
In nonjudicial foreclosure states, the first step toward foreclosure is often the appointment of a substitute trustee. The trustee is the person authorized in the loan documents to perform the foreclosure auction. Lenders getting ready to foreclose must make sure the proper party has been named as trustee. Usually, this means filing an Appointment of Substitute Trustee. It is an early warning sign of impending foreclosure. You can often search online for those documents, or search in person at the offices where deeds are recorded for your community. Call your local recorder of deeds for more information.
You should also read the legal section of your local newspaper or a specialized legal newspaper in your community. Public notices regarding scheduled foreclosures will be printed by the creditors’ attorneys. This may only give you a twoto three-week lead, or you may have more time if the foreclosure is postponed several times.
Pending sales of property for delinquent real estate taxes can be obtained from the local tax collector’s office. If you do not know where your local tax collector’s office is, call any mortgage company or closing company and ask them. Someone there will be able to tell you.
Judgment creditor auctions are usually advertised in the legal section of the newspaper.