SAR Home Foreclosure Process

AN OVERVIEW OF

THE HOME FORECLOSURE PROCESS

Federal Home Finance Agency Office of Inspector General | 2

An Overview of the Home Foreclosure Process

Among the most prominent features of the current housing crisis has been

an unprecedented jump in the incidence of mortgage delinquencies and

foreclosures. Public policy and financial market observers have attributed

delinquency and foreclosure increases to a wide range of causes and have

offered varying policy prescriptions for what remains a continuing

problem. Allegations of improper or deficient practices on the part of

mortgage originators and servicers have also been a major source of

controversy over the past few years. By identifying and describing the

procedures and requirements that characterize an appropriately executed

foreclosure process, FHFA-OIG seeks to provide useful context and

understanding for policymakers and members of the public.

Most home purchases in the United States are financed through loans

provided by banks or other lenders. Lenders, as part of the legal process

that provides cash financing to borrowers, typically require a secured

interest or mortgage on the property financed. Borrowers agree to accept

the secured interest on their properties and to repay the loans provided

over time. The foreclosure process typically commences only after a

borrower has stopped repaying the loan (meaning that the loan has gone

into default); the lender therefore uses the foreclosure process to recover

the proceeds of the loan through the sale of the property. Foreclosure

involves specific rights and obligations with respect to both the

homeowner/borrower and the lender (or its representatives) through

each step of the process.

Before turning to default and the foreclosure process, however, this

overview reviews the legal process supporting mortgage loans. It next

turns to default, the gateway to foreclosure, before discussing the

foreclosure process and loss mitigation options. This discussion will also

identify sources of information regarding federal programs designed to

assist homeowners who may be involved in, or at risk of, foreclosure

proceedings.

FUNDAMENTALS OF THE MORTGAGE

A mortgage is a loan secured by real estate collateral, specifically the

borrower’s house or apartment.

While the term “mortgage” is used

colloquially to refer to both the loan and the security, there are actually

two separate legal documents: a note and a security instrument.

 

Foreclosure:

Thelegalprocessusedbya

lendertosecurepossession

ofamortgagedproperty.

Although real estate investors may

also finance their purchases of

commercial properties, such as office

buildings and rental apartment

complexes, through mortgage debt,

this discussion will center

specifically on residential mortgages.

Federal Home Finance Agency Office of Inspector General | 3

The Note

The note represents the promise or agreement of the homeowner

(mortgagor) to repay the loan to the lender or noteholder and specifies the

terms of repayment, such as the interest rate and schedule of payments.

Most mortgage notes are freely transferable from the original lender to

others. Lenders, in fact, sell most loans to third parties, either directly or

through the securitization process in which groups of mortgages are

pooled together and sold as a security to investors. The Enterprises are the

most prominent participants in the purchases and sale of mortgages; they

accounted for approximately 70% of the nation’s issuances of MBS in

2010. Rather than lend directly to homeowners, they purchase mortgages

from the original lenders and other buyers. The mortgage note specifies

that the borrower must repay the noteholder, which may differ from the

original lender if the loan is sold.

Figure 9. Mortgage

The Security Instrument

The security instrument is the separate legal document or agreement that

pledges the house as collateral for repayment of the note. The security

instrument goes by various names, such as the “mortgage,” the “deed of

trust” (DOT), or the “trust deed,” depending on its form and the state in

which the house is located. In many states, it is typically recorded in the

county recorder of deeds offices in order to establish the mortgagee’s

interest in the property as a matter of public record. This is important

because it establishes the mortgagee’s rights in the property relative to

other parties, including other mortgagees. The majority of mortgages are

recorded using a private recordation company known as the Mortgage

Electronic Registration System (MERS). When MERS is used, it is listed

in county property records as the mortgagee, while the real mortgagee is

tracked in MERS’ private registry. The validity of MERS’ various

Securitization:

Aprocesswherebyafinancial

institutionassemblespoolsof

income‐producingassets

(suchasloans)andthensells

aninterestinthecashflows

assecuritiestoinvestors.See

page20,Figure1.

Federal Home Finance Agency Office of Inspector General | 4

processes has been the subject of significant and on-going legal

controversy.

The form of the security instrument affects the foreclosure process.

Legally speaking, a mortgage is the granting of a lien. The homeowner, as

mortgagor, retains title to the property and grants a contingent interest to

the lender as mortgagee. Alternatively, a DOT is more akin to a sale and

repurchase: the homeowner, as trustor, gives title to the property to the

DOT trustee, who holds it on behalf of the lender as beneficiary. The

DOT trustee is typically a title company or a local attorney. The DOT

trustee is charged with releasing the deed to the trustor if the loan is paid

off or with foreclosing if the trustor defaults. In the standard DOT

arrangement, if the homeowner defaults, the beneficiary noteholder will

appoint a substitute trustee, often an affiliate, to handle foreclosure. The

precise duties of DOT trustees may be a potential issue in foreclosures.

Figure 10. Deed of Trust

Lien:

Thelender’srighttohavea

specificpieceofthedebtor’s

propertysoldifthedebtis

notrepaid.Withrespectto

residentialmortgages,the

noteholderretainsalienon

thehouse(asevidencedby

themortgageordeedof

trust)untiltheloanisrepaid.

DOT trustees should not be

confused with securitization trustees.

Many securitizations involve a trust

that holds legal title to the mortgages

and notes. These trusts have a

trustee – a major financial institution

–

that acts as an agent for the trust,

carrying out functions such as

remitting payments to investors in

the securities issued by the trust and

reporting to investors on the

performance of the trust’s mortgages.

The actual management of the

mortgages, though, is carried out by

another entity, known as the servicer.

Federal Home Finance Agency Office of Inspector General | 5

The Servicer

All mortgage loans are “serviced,” meaning the payments are collected

and the loan otherwise is administered, including the release of liens upon

payoff or the management of defaults. The servicer may be an arm of the

original lender, or it may be an unrelated third party, in which case it is

acting on behalf of the current owner of the loan, typically under a detailed

contract known as a “pooling and servicing agreement” or “loan servicing

agreement.” As the majority of mortgage loans are sold by their original

lender (sometimes referred to as the loan’s “originator”), most loans have

servicers that are unaffiliated with the original lender. For example, the

Enterprises do not service any of the loans they own themselves; instead,

they use third-party servicers, typically affiliates of the parties that sold the

loans to them.

Subcontracting arrangements are common in servicing, so a borrower’s

contact may in fact be with a subservicer, a vendor, or an attorney engaged

by one of these parties. Both servicing and subservicing contracts

frequently impose limitations on the servicer’s ability to manage the loan,

including when and how the servicer may modify or otherwise restructure

a loan.

DEFAULT

Default is the prelude to foreclosure. Although various technical defaults

are possible, the typical default is a failure to make payments as required

on the mortgage. Most mortgages require defined payments each month

(though the amount due may vary if the mortgage has an adjustable rate),

and mortgage servicers will often refuse to accept partial payments.

Figure 11 illustrates the remediation process for a defaulted loan. The

outcomes following a default depend on factors such as the amount and

degree of delinquency, the borrower’s overall financial situation, the value

of the property and amount of indebtedness, the servicer’s economic

interests (as distinct from the mortgagee’s), and constraints placed on the

servicer by contract and applicable laws. Thus, a defaulted residential

mortgage may return to good standing, or be modified, or the property

may be sold or repossessed by the mortgagee via foreclosure or a

voluntary surrender.

Generally, servicers will not commence a foreclosure until a mortgage is

90 days delinquent – that is, until the borrower has missed three

consecutive payments. Thus, a homeowner can conceivably fall behind on

a mortgage for a month or two and catch up without the servicer

commencing a foreclosure. However, it is important to note that a servicer

Formoreinformationonthe

servicer,seepages26‐27of

thisreport,SelectedFHFA

ProgramsandActivities.

Federal Home Finance Agency Office of Inspector General | 6

may legally begin foreclosure proceedings before a mortgage is 90 days

late. Ninety days is a common practice, not a legal requirement.

Figure 11. Foreclosure Process Flowchart

Federal Home Finance Agency Office of Inspector General | 7

Loss Mitigation

In some cases, the default may be cured and the loan reinstated. In

addition, depending on individual circumstances, alternatives may exist

that permit defaulted borrowers to remain in their homes while addressing

their payment delinquency. It is important to note that most of these

options are voluntary, but state law and contractual arrangements,

including the acceptance of MHA program funds from Treasury, may

trigger particular loss mitigation duties on the part of the servicer.

Mediation. Many states offer or require pre-foreclosure mediation

between homeowners and servicers. In some states servicers are required

to mediate in good faith in order to proceed with foreclosure. This may

include presenting the homeowner with all appropriate paperwork for a

foreclosure and having authority to accept settlement offers.

Modification. Common modifications include extending the mortgage’s

maturity date, adding past-due payments to the end of the mortgage, and

making both permanent and temporary interest rate reductions. In most

cases, when appropriately applied, these measures will lower the

borrower’s re-amortized monthly mortgage payment to a more affordable

level.

Reductions in the borrower’s unpaid principal balance are uncommon.

Although HAMP permits principal reductions at participants’ option, the

Enterprises do not provide for principal reductions in their implementation

of HAMP. Homeowners should be aware that under certain circumstances

the forgiven debt may be deemed income for tax purposes.

Forbearance. Lenders may always exercise forbearance on defaulted

loans, meaning that the lender may simply decline to proceed with

foreclosure. Homeowners have no right to forbearance, unless they are

active duty military servicemembers covered by the Servicemembers Civil

Relief Act or have been so within the previous 90 days. Note that some

types of modifications, such as ones that tack past-due balances onto the

end of loans as balloon payments, are sometimes referred to as

forbearance.

By contrast to payment reductions, payment forbearance involves

temporarily suspending the need to make mortgage payments. In their

guidance to loan servicers, Fannie Mae and Freddie Mac permit payment

forbearance for up to six months in the cases of unemployed borrowers.

Servicers must consider unemployed borrowers for such forbearance

Adetailedlistingofborrower

eligibilitycriteriaforHAMP

andotherMHAassistance

programsisavailableat

www.makinghomeaffordable.

gov.

ThewebsitesofFannieMae

(www.fanniemae.com)and

FreddieMac

(www.freddiemac.com)

incorporateutilitiesthat

permitborrowerstolearn

whetherthoseorganizations

guaranteeorownspecific

homeloans.

Mediation:

Mediationisaprocessby

whichaneutralthirdparty

(mediator)assiststhe

homeownerandlenderin

reachingafair,voluntary,

negotiatedagreement.The

mediatordoesnotdecide

whoisrightorwrong.

Figure12,attheendofthis

overview,liststhosestates

thatofferorrequire

mediationas

partofthe

mortgageloandefault

remediationprocess.

Federal Home Finance Agency Office of Inspector General | 8

before consideration for a HAMP loan modification. Borrowers who are

not offered any such forbearance must be evaluated for HAMP.

Refinancing. Another option for handling a defaulted loan is to replace

it with a new loan via a refinancing. The terms of the new loan can be

whatever the borrower and new lender negotiate; the proceeds of the new

loan are used to pay off the balance on the old loan. When the old lender

is paid off, the old lender releases its lien on the property.

The difference between refinancing and modification is that refinancing

entails a new loan, whereas modification is simply a change to the terms

of an existing loan. A refinancing can involve the substitution of a new

lender for the existing lender or a new loan from the existing lender,

whereas a modification involves the same lender. Because a refinancing

involves a new loan, there are generally closing costs associated with a

refinancing, whereas modification may or may not involve fees to the

borrower.

Traditionally, refinancing requires the payment in full of the existing loan.

Most mortgage loans have “due on sale” clauses that require payment of

the full balance of the loan upon the sale of the property and further define

a refinancing as a sale. Unless the existing mortgage is paid off, the

existing mortgagee continues to hold a lien on the property that is senior to

the new lender’s. Payment in full via a refinancing thus requires the

CommonMisperceptionsAboutEnterprisePoliciesforHAMPParticipants

Publishedreportsindicatethatmistakenoroutdatedunderstandingsmaypersistamongparticipants(both

servicersandborrowers)inHAMPforloansownedorguaranteedbytheEnterprises.Threecommon

misperceptionsarediscussedbelow:

 HAMPParticipantsMustBeDelinquent.HAMPdoesnotrequirehomeowners

tobeactuallydelinquent

intheirpaymentsbeforeparticipating.Despitereportedcasesofmortgageservicersindicatingthat

homeownersmustbedelinquent,andinsomecasesactuallyencouragingthemtofallbehindintheir

payments,programguidanceandtheEnterprises’servicerdirectivesexplicitlypermitparticipationby

homeownerswhoremaincurrent,butfor

whomdefaultis“reasonablyforeseeable.”

 HAMPRequiresaVeryLongTrialPeriod.TheEnterprises’publishedguidancestatesthattheinitialtrial

periodforHAMPparticipants“mustbethreemonthslongformortgageloansalreadyindefaultandfour

monthslongformortgageloanswheretheservicerhasdeterminedthat

defaultisimminentbuthasnot

yetoccurred,”contrarytoreportedinstancesofborrowersmakingtrialpaymentsformuchlonger.

 TheForeclosureProcessCanProceedWhileLossMitigationEffortsareUnderway.AsaresultofFHFA’s

ServicingAlignmentInitiative,currentEnterpriseguidancestatesthatservicersmaynotcommencethe

foreclosure

processaslongastheyareengagedinagoodfaitheffortwiththeborrowertoresolvethe

delinquency.“Dualtracking”asingleloanforbothforeclosureandmodificationisprohibited.

Additionally,beforealoanisreferredforforeclosure,theservicermustalsoperformaformalreviewof

thecase

toensurethatappropriatealternativeswereconsidered.

Federal Home Finance Agency Office of Inspector General | 9

homeowner to have equity in the property, as today lenders will almost

never extend credit beyond the value of the property (above a 100% loan-

to-value ratio). Accordingly, refinancing has not been an option,

generally, for borrowers who are underwater, even if they are current on

their mortgage. However, the Enterprises will refinance qualifying

underwater mortgages they own or guarantee under the federal

government’s Home Affordable Refinancing Program (HARP). Loans

that are held on banks’ balance sheets or in private-label securitizations

are not eligible for HARP.

In addition, some lenders will accept a “short refinancing” in which they

receive less than the full unpaid principal balance, may forgive the

remaining balance, and release the lien. They may choose to do so if they

believe that they will make more in a partial payment via a refinancing

than they will in a foreclosure sale. FHA, for example, offers a short-

refinancing program: for qualifying borrowers who do not currently have

FHA-insured loans, FHA will insure a new first lien mortgage loan at up

to 97.75% loan-to-value ratio based on a fresh appraisal. This means that

the existing lender must agree to a write-down of the balance as part of the

refinancing. FHA requires that the existing lender reduce the existing

balance by at least 10% and that the combined loan-to-value ratio of all

mortgages on the property be no more than 115%. While short

refinancing may be a valuable solution for underwater borrowers,

refinancing with a new lender is often very difficult for borrowers with

impaired credit scores (which includes any borrower who has defaulted),

or even for those with relatively good credit scores.

FORECLOSURE AND ITS EFFECTS

If loss mitigation efforts do not succeed, the defaulted loan will proceed to

foreclosure. There are two basic types of foreclosure. Judicial

foreclosures proceed through the court system, while nonjudicial

foreclosures take place outside it. The type of foreclosure process and

other specific features are governed by state law, which varies

considerably among the states, and by the terms of the mortgage itself.

Some mortgages permit only one type of foreclosure. Some states permit

only one type of foreclosure, while others provide for the possibility of

either. State law can also vary depending on the type of property involved

(its size and use) and by whether the mortgage was a purchase money

mortgage or a refinancing of a previous mortgage. This overview is

designed to present a general description of the foreclosure process.

Actual state law may vary from the process described herein, and this

overview should not be relied upon as a legal guide.

Equity:

Inthecontextofresidential

mortgagefinance,equityis

thedifferencebetweenthe

fairmarketvalueofthe

borrower’shomeandthe

outstandingbalanceonthe

mortgage(andanyotherdebt

securedbyit,suchashome

equityloans).

Underwater:

Termusedtodescribe

situationsinwhichthe

homeowner’sequity

isbelow

zero(i.e.,thehomeisworth

lessthanthebalanceofthe

loan(s)itsecures).

On October 24, 2011, FHFA

announced revisions to HARP to

expand the number of eligible

homeowners. FHFA-OIG will

discuss these revisions in greater

detail in the next Semiannual

ort.

Federal Home Finance Agency Office of Inspector General | 10

Judicial Foreclosure

A judicial foreclosure is a litigation process with a specific remedy.

Generally, the loan servicer, on the noteholder’s behalf, commences the

foreclosure by filing a suit against the homeowner. If those bringing the

suit cannot prove that they are acting on behalf of the party entitled to

repayment under the terms of the note, they may lack legal standing to do

so. Similarly, a foreclosure may be invalid if the foreclosing party or its

representative files suit before becoming the holder of the note and the

mortgagee.

To begin a foreclosure action, the noteholder’s representative files various

documents with the court in the form of a “complaint.” It also must serve

the complaint to the homeowner, notifying him or her of the litigation.

Additionally, notice must typically be sent to all junior lienholders, such

as home equity lenders. The specific requirements vary by state, but state

law typically requires the foreclosing party to assert for the record that:

 the homeowner is indebted to the foreclosing party;

 the homeowner has defaulted on the loan;

 the loan is secured by a mortgage, and the foreclosing party is or

represents the mortgagee; and

 service of process has been made on the homeowner.

These are typically made via affidavits – sworn written statements

submitted to the court. For example, the fact and amount of the

indebtedness are typically established via an affidavit of indebtedness.

State law requires that affidavits be sworn out by affiants who have

personal knowledge of the facts to which they attest. Such affidavits are

typically notarized.

JuniorLienholder:

Thesecurityinterestthatcan

beavailedonlyafterthe

seniorlienissatisfied,is

calledajuniorlien.The

holderofthissecurityinterest

isthejuniorlienholder.

Dependingontherelative

priorityofthejuniorlien,the

juniorlienholdermaybethe

secondmortgagee,third

mortgagee,etc.

Forexample,

abankholdingahomeequity

mortgageonahomeisthe

juniorlienholdertothebank

holdingtheprimary

mortgage.

Federal Home Finance Agency Office of Inspector General | 11

Generally, state law requires that a copy of the mortgage note accompany

the complaint. The foreclosing party may be required to produce the

original “wet ink” or “blue ink” note. Often state law requires the filing of

the mortgage itself as part of the complaint, but because recorded

mortgages (unlike notes) are public records, a reference to the mortgage

may be sufficient. Some states also require certification of mandatory loss

mitigation efforts, such as mediation, prior to foreclosure.

Most judicial foreclosures are not contested and result in default

judgments against the homeowner. In such cases, it is rare for courts to

undertake more than a cursory examination of the sufficiency of the

foreclosing party’s filings.

Robo‐signing.Inmid‐2010,certainleadingmortgageservicerswerefoundtoberoutinelysubmittingflawed

affidavitstocourtsinforeclosurecases.Affidavitsaresupposedtobeswornoutbyaffiantswithpersonal

knowledgeofthefacts,whichareattestedtointheaffidavit,suchasthefactandamountof

the

homeowner'sindebtednessandthatthehomeownerhaddefaultedontheloan.Inthecourseofdepositions

inforeclosurecases,servicerswerefoundtohaveemployeeswhosesolejobwastosignforeclosure

affidavits,asmanyas10,000affidavitsinasinglemonthbysomeemployees(roughlyoneperminute). 

These

employeeshadnopersonalknowledgeofanyofthefactstowhichtheyattested.

Asrobo‐signingbegantogarnermediaattention,severalmajorservicersimposedvoluntarymoratoriaon

theirforeclosureactivities.Allhavesubsequentlyresumedforeclosures,althoughsomeforeclosurefilings

havebeenwithdrawnandresubmittedand,inMaryland,a

statejudgethrewoutover10,000foreclosures

filedbyAllyFinancialInc.(formerlyknownasGMAC,LLC)becauseofrobo‐signing.Federalbanking

regulatorscommencedaninvestigationofrobo‐signingpracticesthatresultedinconsentordersbetween

leadingservicersandthefederalregulators,inwhich theservicersagreedtoimproved

internalcontrols.

Stateattorneysgeneralarestillinvestigatingrobo‐signingandrelatedissues.

Whilemediaattentionwasfocusedonthelackofpersonalknowledgeoftheaffiantsandthesheervolumeof

signaturesmadebyindividualrobo‐signers,moreseriousissueslurkintherobo‐signingscandal.Inparticular,

the

backdatingofmortgagetransferdocumentswasthefocusofthedepositionsinwhichrobo‐signingwas

uncovered.Thedateofthetransferofamortgageiscriticalforthreereasons:

 First,itmayaffectwhetheraservicerhaslegalstandingtoforeclose;onlythemortgageehassuch

standing.InIbanez

v.U.S.Bank,theMassachusettsSupremeJudicialCourtupheldthereversalofa

foreclosureinwhichtheservicercouldnotprovethattheloanhadbeentransferredtothe

securitizationtrustbeforetheforeclosurewascommenced.

 Second,itmayaffectwhethertheservicerisa"holder‐in‐due‐course,"a

speciallegalstatusthat

preventsthehomeownerfromraisingcertaindefenses(includingthatthehomeownerwasfraudulently

inducedintothemortgage)andcounterclaims.Apartythatreceivesaloanthatisindefaultcannotbe

aholder‐in‐due‐course,sodeterminingthedateoftransferiscriticaltoensure

thatthehomeowneris

notwrongfullydeprivedofhisorherlegalrightstoraisedefensesandcounterclaims.

 Third,forsecuritizedloans,taxandtrustlawrulesdependonthedateofthetransfer.Iftheloanwas

transferredtoolate,theremaybeadversetaxconsequencesfortheinvestors

inthemortgage‐backed

securitiesandthetransfermayitselfbevoidundertrustlaw.

Thus,issuesrelatedtothetimingoftransfersofmortgages(oftenreferredtoas"chainoftitle")have

profoundlegalimplications.

Federal Home Finance Agency Office of Inspector General | 12

If a homeowner contests a foreclosure, either because of procedural

deficiencies or on the basis of substantive defenses and counterclaims,

then the case is litigated like a regular civil action. A homeowner's ability

to raise defenses and counterclaims depends on whether the foreclosing

party is a “holder-in-due-course” of the defaulted note. To be a holder-in-

due-course, the foreclosing party must: (1) possess the actual note; (2)

have given value for the note and taken it in good faith; and (3) have no

notice of any defect in the note, including that the note is in default. This

means that if the note were transferred to the foreclosing party subsequent

to the default, the foreclosing party is not a holder-in-due-course, so the

homeowner may raise a full battery of defenses and counterclaims in the

foreclosure action.

ShowMeTheNote.Foreclosuredefenselitigationhasbeguntofeaturevariationsofthe“show‐me‐the‐

note”defense,inwhichthehomeownerchallengestheforeclosingpartytoprovethatithastherightto

foreclose.Initsmostbasicform,thisdefenseisademandthattheforeclosingpartyproduce

theoriginal

mortgagenote,butthetermreferstoarangeofchallengesrelatingtotheforeclosingparty’sstanding.

Critically,theshow‐me‐the‐notedefensedoesnotinvolveaclaimthatthehomeownerisnotindefault.

Instead,itfocusesonwhethertheforeclosingpartyisthepartythat

islegallyentitledtoforecloseandhas

madetherequiredevidentiaryshowings.Determiningtheproperpartyisimportantforissuesoflegal

standing,holder‐in‐due‐coursestatus,andthehomeowner’sabilitytoraisevariousdefensesand

counterclaims,andbecauseitaffectssettlementabilitiesandincentives.Aportfoliolender,forexample,

may

haveverydifferentsettlementabilitiesandincentivesthanathird‐partymortgageservicer.

Kempv.CountrywideHomeLoans,Inc.,449Bankr.624(Bankr.D.N.J.2010)providesanillustrationofa

successful“show‐me‐the‐note”defense.InKemp,thehomeownerhadtakenoutaloanfromCountrywide

Home

Loans,Inc.Countrywidesubsequentlysecuritizedtheloan,sellingittoatrustnamedCWABSAsset‐

BackedCertificates,Series2006‐8.TheBankofNewYorkservedastrusteeforthetrustandCountrywideas

servicerforthetrust.

Thehomeownerfiledforbankruptcy,havingpreviouslydefaultedonhismortgage.Countrywide,as

servicer,

filedaclaiminthebankruptcyonbehalfofthetrust.Thehomeownerchallengedthatclaimbasedonthefact

thatthemortgagenotehadnotbeenproperlyendorsedtotheBankofNewYorkastrusteeforthe

securitizationtrustandwasneverplacedintheBankof

NewYork’spossession.Accordingly,thehomeowner

argued,thetrustwasnotapartyentitledtoenforcethenote,asonlyaphysicalholderofthenote,anon‐

holderinpossession,orsomeonewhohaslostanotemayenforceanote.

Duringthetrial,Countrywideproducedan“allonge”—a

separatesheetofpapertobeaffixedtoanoteto

allowroomforadditionalendorsements.Thisallongecontainedtheendorsementthatwasmissingonthe

noteitself(albeitwithanerrorinthenameofthetrust).Countrywide’sofficialwitness,however,testified

thattheallongehadbeencreatedin 

anticipationofthelitigation.Theofficialwitnessfurthertestifiedthat

theoriginalnotehadneverleftCountrywide’spossessionandthatthenewallongehadneveractuallybeen

affixedtothenote—itwassimplyapieceofpaperwithanendorsement,butnoindicationofwhat hadbeen

endorsed.

The

bankruptcycourtdeniedtheclaimCountrywidehadfiledonbehalfofthetrustbecausethetrustcould

notshowthatitwasapartyentitledtoenforcethenote.Thetrustwasneitheraholderofthenote(an

ownerofthenoteinphysicalpossessionofthenote),nor

anon‐holder(someonewholacksownershipofthe

note)inpossessionofthenote,norhaditlostthenote.BecausetheBankofNewYork,astrustee,and

Countrywide,asitsagent,werenotentitledtoenforcethenote,thebankruptcyclaimagainstKempwas

disallowed.

Federal Home Finance Agency Office of Inspector General | 13

If the court awards judgment to the foreclosing party, the property is then

scheduled for sale, typically by the county sheriff. Sale scheduling is

determined in part by requirements for advertisement of the sale for a

minimum time period. The homeowner may, of course, appeal the

foreclosure judgment.

Nonjudicial Foreclosure

Nonjudicial foreclosures proceed rather differently. There are no court

filings or showings of proof required. Instead, in a nonjudicial

foreclosure, the foreclosing party must notify the homeowner of the

default and the scheduled sale. Sometimes this requires a formal “notice

of intent to foreclose.” It is also required to advertise the sale.

Advertisement requirements vary significantly by jurisdiction, but

generally the sale must be advertised in a newspaper of record for the

community for a few weeks prior to the sale. The assumption in a

nonjudicial foreclosure proceeding is that the foreclosing party has the

right to foreclose, provided that it appropriately provides notice and

advertises the sale.

A nonjudicial foreclosure may effectively be transformed into a judicial

foreclosure if the homeowner brings a quiet title action or the equivalent,

which has the effect of contesting the foreclosure sale’s transfer of title to

the foreclosure sale purchaser. Conversely, foreclosure sale purchasers

will sometimes bring subsequent judicial actions to ensure quiet title,

particularly if there are any questions about the procedural propriety of the

sale.

The Foreclosure Sale

The rules governing the actual foreclosure sale vary by jurisdiction. Sales

are conducted by auction, but there are usually few if any rules governing

the actual sale in nonjudicial foreclosures. The timing and the bidding in

judicial foreclosure sales is frequently specified in detail by statute,

including minimum bids, appraisal requirements, deposits, and completion

of payment. Some jurisdictions, however, leave details of the bidding up

to the local government official, typically the sheriff, who conducts the

auctions.

Two constant rules for all foreclosure sales are the order of payment and

the effect on liens. The proceeds of a foreclosure sale are used first to

cover the expenses of the sale. They are then paid to the foreclosing party,

and, if there are surplus funds, to junior lienholders in their order of

seniority. Rules of lien priority generally follow a first-in-time, first-in-

right pattern, with the first lienholder to perfect its lien (by making the

Perfection:

Thelegalrecordingof

evidenceforacreditor’slien

onaparticularitemof

property.

Federal Home Finance Agency Office of Inspector General | 14

necessary legal filings or automatically in some cases) having seniority

over subsequently perfected (or unperfected) liens. There are many

exceptions to this pattern, however. Notably, state tax liens frequently

have priority over other previously perfected liens. If any surplus remains,

it is paid to the (former) homeowner.

There is no right for prospective buyers (or the foreclosing party) to

inspect the property before the foreclosure sale. Prior to the completion of

the sale, the property still belongs to the mortgagor/homeowner.

Accordingly, third parties tend to discount foreclosure sale purchase bids

heavily. Although they can ascertain the external condition of the

property, they cannot discern the layout or condition of the property

internally, and many foreclosed properties have been damaged prior to

sale.

The inability to inspect the property pre-sale, as well as the foreclosing

party’s ability to “credit bid,” means that there are relatively few bidders

in most foreclosure sales other than the foreclosing party. Most

foreclosure sale properties are purchased by the foreclosing party via a

“credit bid.” This means that the foreclosing party bids the amount it is

owed on the loan rather than bidding with cash. In other words, a credit

bidding party merely credits itself rather than writing itself a check. A

credit bidding party typically bids in the full amount of the debt owed,

which means that a third-party bidder must be willing to pay a higher cash

price to win the auction. By credit bidding, the foreclosing party can

obtain clear title to the property, inspect the property, fix it as necessary,

and then resell it subsequently.

It is important to note that foreclosure sales are frequently cancelled or

rescheduled. This may occur for a variety of reasons, including ongoing

negotiations between the borrower and the lender; intervening bankruptcy

filings; and inability to complete procedural steps, including accumulation

of necessary documentation.

Cures

Until the completion of the foreclosure sale, the homeowner may cure the

default and stop the foreclosure. Typically this requires payment of the

entire mortgage debt, as the lender will have accelerated the debt. The

lender may be willing, but is under no obligation, to stop the sale if only

past due payments are tendered.

If the homeowner files for bankruptcy, the foreclosure sale is

automatically stayed, and federal bankruptcy law permits homeowners to

Acceleration:

Thedeclaringofadebtdue

andpayableimmediately.

Lendersmaypossessthis

rightundercertain

conditions,accordingtothe

termsoftheobligationor

applicablelaw.

Federal Home Finance Agency Office of Inspector General | 15

unwind the acceleration of a mortgage and cure by paying only the past

due payments and associated costs.

Deficiency Judgments

The foreclosure sale may not provide proceeds sufficient to satisfy the

mortgage debt. In such cases, the noteholder’s representative (and any

junior lienholders) may seek a deficiency judgment – a legal judgment for

the remaining amount of the debt. A deficiency judgment is an unsecured

debt, like credit card debt, and collection follows the procedure for other

unsecured debt. This means that deficiency judgments are often difficult

for lenders to collect, as many states place restrictions on wage

garnishment and unsecured debts are generally dischargeable in

bankruptcy. Accordingly, noteholders often sell deficiency judgments to

third-party debt collectors at substantial discounts from face value.

Attempts to collect these debts are typically subject to the provisions of

the Fair Debt Collection Practices Act as well as to state debt collection

law.

The availability and procedure for a deficiency judgment varies by state

and foreclosure process. Generally, deficiency judgments are not

available when nonjudicial foreclosure is used because of concerns that

private sales might be manipulated to suppress foreclosure sales prices in

order to produce a larger deficiency judgment. In some states, deficiency

judgments are available automatically following a judicial foreclosure. In

others, the foreclosing party must file a motion or a complaint for a

deficiency judgment. Even then, there is variation as to whether a

deficiency judgment (if allowed) is awarded as a matter of right or by

judicial discretion.

Right of Redemption

In some states, homeowners have a statutory post-foreclosure sale “right

of redemption.” This means that the homeowner can redeem ‒ reclaim

title to ‒ the house by tendering the amount of the unpaid debt and

foreclosure sale costs. The length of the statutory redemption period

varies considerably, from as short as 10 days in New Jersey to 2 years in

Tennessee. The existence of rights of redemption is a factor foreclosure

sale purchasers are likely to consider, as they run the risk of being

deprived of their foreclosure sale purchase (even though the purchase

price is returned). While it is uncommon for foreclosed homeowners to

come up with the cash to redeem their properties during the redemption

period, the right is exercised at times.

Figure12,attheendofthis

overview,summarizes

provisionsforrightof

redemptionbystate.

Federal Home Finance Agency Office of Inspector General | 16

Eviction

If the former homeowner does not voluntarily surrender the property

following the foreclosure sale, the foreclosure sale purchaser can have the

former homeowner evicted. Eviction is also a state law procedure; the

precise process varies by state law, but it is not always automatic.

Because foreclosure sale purchasers are often concerned about former

homeowners damaging the property before they leave, they are often

willing to negotiate with homeowners regarding relocation timetables and

costs. They are, however, under no obligation to do so.

Renters Living in Foreclosed Property

Sometimes a foreclosed property is occupied by renters. Renters’ rights in

a foreclosure involving their landlord vary by state. Since 2009, however,

the Helping Families Save Their Homes Act has included minimum

protections for renters in the foreclosure of most mortgages, including all

mortgages owned by the Enterprises. If the renter has a bona fide lease

entered into prior to the notice of foreclosure, then the renter may occupy

the property until the end of the remaining term on the lease unless the

renter is given notice of termination by the foreclosure sale purchaser, in

which case the renter has 90 days of occupancy rights. If the renter is not

renting under a lease or the lease is terminable at will, then the renter also

has 90 days of occupancy rights from notice of termination. Some states

give renters additional occupancy rights; others merely give renters the

right to notice of the foreclosure.

Liability for Insurance, Taxes, and Homeowners’ Fees

Until title passes to the foreclosure sale purchaser, the homeowner

typically remains liable for taxes, homeowners’ association dues,

nuisances, and accidents on the property. Noteholders or their

representatives typically have the right to force-place insurance on the

property if the homeowner has failed to maintain insurance payments.

Force-placement of insurance involves the noteholder’s purchasing

insurance on the property with itself as the loss-payee. Force-placed

insurance can be expensive relative to regular insurance, and some

servicers force-place insurance with their affiliates.

Post-sale, the liability falls on the property’s new owner. In some

communities, however, a phenomenon known as “bank walkaway” has

occurred in which a servicer will commence a foreclosure, but not

complete it. Frequently, bank walkaway occurs when the property’s value

is so low that it is not worth the expense of foreclosure. In bank walkaway

cases, the homeowner remains the owner of the property, although in

Federal Home Finance Agency Office of Inspector General | 17

many cases he or she will have moved out because of the anticipated

foreclosure. Because the homeowner remains the title owner of the

property, he or she remains liable for property taxes and upkeep. Thus,

the homeowner could be subject to fines and other penalties if the property

becomes a nuisance, or the homeowner could be liable for accidents that

occur. Similarly, the noteholder’s representative may complete the

foreclosure and purchase the property itself in the foreclosure sale, but fail

to record the deed in its own name. In such cases, the homeowner remains

liable for property taxes.

Impact on Credit Score

Mortgage defaults, foreclosures, deeds in lieu of foreclosure, and short

sales can have adverse impacts on consumers’ credit scores. A default,

foreclosure, deed in lieu, or short sale may remain on a consumer’s credit

report for up to seven years. A bankruptcy may remain on a consumer’s

credit report for up to 10 years. The presence of adverse events on credit

reports is likely to lower a consumer’s credit score, which can make it

more difficult or expensive for a consumer to obtain credit in the future.

Credit reports are also used by insurers and employers, so adverse credit

events can affect the cost of insurance and/or employment opportunities.

FORECLOSURE ALTERNATIVES

Depending on individual circumstances, alternatives may exist to

foreclosure proceedings that reduce expenses or legal liability for troubled

homeowners. However, like foreclosure, these options will typically

result in the homeowner’s loss of his or her house. These alternatives may

include short sales, deeds in lieu, and bankruptcy. The Enterprises

participate in the federal government’s HAFA program, which is designed

to encourage alternatives to the foreclosure process for troubled home

mortgage loans. Participating HAFA servicers may not seek deficiency

judgments and may provide relocation incentives of up to $3,000 for

eligible homeowners who tender deeds in lieu of foreclosure or do short

sales.

Short Sale

Lenders may agree to a “short sale,” in which the homeowner conducts a

private sale of the house, and the lender releases its lien in exchange for

the sale proceeds, even though the sale proceeds are insufficient to pay off

the debt. A short sale does not necessarily discharge the homeowner’s

debt; it merely results in a release of the lien, so the homeowner may still

be liable for the deficiency. If the lender forgives the deficiency, it may be

MoreinformationonHAFAis

availableat

www.makinghomeaffordable.

gov/programs/exit‐

gracefully/Pages/hafa.aspx.

Federal Home Finance Agency Office of Inspector General | 18

imputed as taxable income for the homeowner, particularly if the

mortgage had a cash-out component.

There are certain barriers to a short sale. Servicers are frequently wary of

short sale offers because of concerns that they are settling the debt at too

low a price and that the bidder may have colluded with the homeowner.

In addition, the high rate of denials for short sale offers has made realtors

reluctant to handle them because realtors are only paid upon

consummation of a sale and put in more effort in short sales than for

regular sales.

Deed in Lieu of Foreclosure

Lenders will sometimes accept a deed in lieu of foreclosure. This means

that the homeowner will surrender title and possession of the property

voluntarily, rather than requiring the lender to go through the full

foreclosure process. For the lender, a deed in lieu spares the time and

expense of the foreclosure process. For the homeowner, a deed in lieu

may be attractive because the terms under which the homeowner

surrenders the property may be negotiated ‒ the lender may be willing to

provide the homeowner with some relocation funds or a more generous

timetable for moving out.

Critically, a deed in lieu does not extinguish junior liens, so the lender will

acquire the property with junior liens still attached. Thus, if neither the

homeowner nor the lender who has taken the deed in lieu pays off the

junior lienholder(s), the latter may foreclose on the property.

Accordingly, lenders may be reluctant to accept deeds in lieu when there

is a junior lien on a property.

Bankruptcy

A homeowner may file for bankruptcy at any point before, during, or after

the foreclosure process. Bankruptcy is a federal judicial proceeding. A

bankruptcy filing automatically stops the foreclosure process. If a lender

wishes to proceed with a foreclosure against a bankrupt homeowner, the

lender must get permission from the bankruptcy court to do so.

If the homeowner files for Chapter 7 bankruptcy and has defaulted, the

homeowner will not be able to retain the property after the bankruptcy

absent the lender’s consent. If the homeowner files for Chapter 13

bankruptcy and has defaulted, the homeowner may de-accelerate the note

and cure the default simply by making up missed payments rather than the

full amount of the note. The homeowner may not, absent the lender’s

consent, modify the terms of the mortgage in bankruptcy if the property is

Federal Home Finance Agency Office of Inspector General | 19

a single-family residence. For multi-family residences, the homeowner

may be able to restructure the mortgage in bankruptcy.

Figure 12. Summary of Foreclosure Process by State

State ForeclosureProcess

 RightofRedemption

 MediationPrograms

Alabama Primarilynonjudicial 1year None

Alaska Primarilynonjudicial No None

Arizona Primarilynonjudicial No None

Arkansas Primarilynonjudicial No None

California Primarilynonjudicial

2yearsifcourtgrants

deficiencyjudgment

Yes



Colorado Primarilynonjudicial

Redemptionbylienholders

allowedonlywithinspecified

periods

Yes



Connecticut Primarilyjudicial

Yes,afterjudgmentand

beforesale

Yes



Delaware Primarilyjudicial No Yes



Districtof

Columbia

Primarilynonjudicial

Inoptionaljudicialprocedure

thereisaprovisionfor

redemptionbeforejudgment

Yes



Florida Primarilyjudicial

Yes,uptodateclerkfiles

certificateofsale

Yes



Georgia Primarilynonjudicial No None

Hawaii Primarilynonjudicial No Yes



Idaho Primarilynonjudicial No None

Illinois Primarilyjudicial

Yes,laterof7monthsafter

serviceofcomplaintor3

monthsafterjudgment

Yes



Indiana Primarilyjudicial No Yes



Iowa Primarilyjudicial 1year None

Kansas Primarilyjudicial

3to12monthsdependingon

percentageofdebtthathas

beenpaid

None

Kentucky Primarilyjudicial 1year Yes



For further information

on homeowner

assistance programs,

borrowers should visit

www.makinghomeaffo

rdable.gov or call 888-

995-HOPE.

Federal Home Finance Agency Office of Inspector General | 20

State ForeclosureProcess

 RightofRedemption

 MediationPrograms

Louisiana Primarilyjudicial No None

Maine Primarilyjudicial

Mortgagesafter10/1/75,90

days.Mortgagespriorto

10/1/75,1year

Yes



Maryland Primarilynonjudicial No Yes



Massachusetts Primarilynonjudicial No Yes



Michigan Primarilynonjudicial

1monthto1yeardepending

onsizeofparcel,numberof

units,percentageoforiginal

loanoutstanding,and

whetherpropertyis

abandoned

Yes



Minnesota Primarilynonjudicial

6or12monthsdependingon

dateofmortgage,sizeof

property,andwhetheruseis 

agricultural

Yes



Mississippi Primarilynonjudicial No None

Missouri Primarilynonjudicial 1year None

Montana Primarilynonjudicial

Generally1year;forsmall

tractsno

None

Nebraska Primarilynonjudicial No None

Nevada Primarilynonjudicial No Yes



New

Hampshire

Primarilynonjudicial No Yes



NewJersey Primarilyjudicial 6months Yes



NewMexico Primarilynonjudicial 9months Yes



NewYork Primarilyjudicial No Yes



NorthCarolina Primarilynonjudicial 10days None

NorthDakota Primarilyjudicial

60daysor1yearfor

agriculturalland

None

Ohio Primarilyjudicial

Beforeconfirmationofsale

withtheamountofjudgment

andassociatedcostspaid

Yes



Oklahoma Primarilynonjudicial Uptoconfirmationofsale None

Federal Home Finance Agency Office of Inspector General | 21

State ForeclosureProcess

 RightofRedemption

 MediationPrograms

Oregon Primarilynonjudicial No Yes



Pennsylvania Primarilyjudicial No Yes



PuertoRico Primarilyjudicial No None

RhodeIsland Primarilynonjudicial

No,exceptifforeclosureby

processoflaworbyopen

entrythen3years

Yes



SouthCarolina Primarilyjudicial

Noredemptionaftersale.

Redemptionpossiblefor5

daysaftersherifftakes

possession

None

SouthDakota Primarilynonjudicial 1year None

Tennessee Primarilynonjudicial

Generallyno,couldbe2years

butrighttoredemptionis

routinelywaived

None

Texas Primarilynonjudicial No None

Utah Primarilynonjudicial

6monthsforjudicial

foreclosure

None

Vermont Primarilyjudicial

Injudicialstrictforeclosure

withnosale,6months.In

judicialforeclosurewithsale

mayredeemuntilsale

Yes



Virginia Primarilynonjudicial No None

Washington Primarilynonjudicial 8months Yes



WestVirginia Primarilynonjudicial No None

Wisconsin Primarilyjudicial

Uptotimeofsale;12months

afterjudgmentunlesscreditor

waivesright,ifwaived6

months

Yes



Wyoming Primarilynonjudicial 3months None

Federal Home Finance Agency Office of Inspector General | 22

ENDNOTES

Commissioner v. Wilcox, 327 U.S. 404 (1946).

National Consumer Law Center, Foreclosure Report: Survey of State Foreclosure Laws

(online at www.nclc.org/images/pdf/foreclosure_mortgage/state_laws/survey-

foreclosure-card.pdf) (accessed Sept. 22, 2011).

Id.

National Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

Douglas County Housing Partnership, Foreclosure Mediation Program (online at

www.douglascountyhousingpartnership.org/foreclosure.htm) (accessed Sept. 22, 2011).

State of Connecticut Judicial Branch, Foreclosure Mediation Program (online at

www.jud.ct.gov/foreclosure/) (accessed Sept. 22, 2011); National Consumer Law Center,

Foreclosure Mediation Programs by State (online at www.nclc.org/issues/foreclosure-

mediation-programs-by-state.html) (accessed Sept. 22, 2011).

Delaware State Housing Authority, NEW Residential Mortgage Foreclosure Mediation

Program (online at www.deforeclosurehelp.org/mediation.html) (accessed Sept. 22,

2011); National Consumer Law Center, Foreclosure Mediation Programs by State

(online at www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed

Sept. 22, 2011).

District of Columbia, Foreclosure Mediation Program (FMP) (online at

www.disb.dc.gov/disr/cwp/view,a,1299,q,645508.asp) (accessed Sept. 22, 2011).

Collins Center for Public Policy, Mortgage Mediation (online at

www.collinscenter.org/page/mediation_home) (accessed Oct. 27, 2011); National

Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

Governor of the State of Hawaii, Help for At-Risk Homeowners (online at

www.hawaii.gov/gov/newsroom/in-the-news/help-for-at-risk-homeowners) (accessed

Sept. 22, 2011); National Consumer Law Center, Foreclosure Mediation Programs by

State (online at www.nclc.org/issues/foreclosure-mediation-programs-by-state.html)

(accessed Sept. 22, 2011).

Circuit Court of Cook County, Mortgage Foreclosure Mediation Program (online at

www.cookcountyforeclosurehelp.org/) (accessed Sept. 22, 2011); National Consumer

Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

Indiana Courts, Help With Mortgage Foreclosures (online at

www.in.gov/judiciary/home/#how) (accessed Sept. 12, 2011); National Consumer Law

Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 12,

2011).

Federal Home Finance Agency Office of Inspector General | 23

City of Louisville, Kentucky, Mayor Abramson and Congressman John Yarmuth

Announce Foreclosure Conciliation Project (June 30, 2009) (online at

www.louisvilleky.gov/Housing/News/2009); National Consumer Law Center,

Foreclosure Mediation Programs by State (online at www.nclc.org/issues/foreclosure-

mediation-programs-by-state.html) (accessed Sept. 22, 2011).

State of Maine Courts Judicial Branch, Foreclosure Diversion Program (online at

www.courts.state.me.us/court_info/fdp/index.html) (accessed Sept. 22, 2011); National

Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

Maryland Home Owners Preserving Equity, Maryland’s Foreclosure Mediation

(online at www.mdhope.dhcd.maryland.gov/ForeclosureMediation/Pages/default.aspx)

(accessed Sept. 22, 2011); National Consumer Law Center, Foreclosure Mediation

Programs by State (online at www.nclc.org/issues/foreclosure-mediation-programs-by-

state.html) (accessed Sept. 22, 2011).

National Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

Community Economic Development Association of Michigan, Michigan Foreclosure

Task Force (online at www.cedam.info/resources/mftf/index.php) (accessed Sept. 22,

2011); National Consumer Law Center, Foreclosure Mediation Programs by State

(online at www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed

Sept. 22, 2011).

Minnesota Housing Finance Agency, Foreclosure Prevention (online at

www.mnhousing.gov/consumers/home-owners/foreclosure) (accessed Sept. 28, 2011).

The Nevada Judiciary, Foreclosure Mediation (online at

www.nevadajudiciary.us/index.php/foreclosuremediation) (accessed Sept. 12, 2011);

National Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

New Hampshire Judicial Branch, Office of Mediation and Arbitration - Summary of the

Foreclosure Mediation Program (online at

www.courts.state.nh.us/adrp/foreclosure/index.htm) (accessed Sept. 22, 2011); National

Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

New Jersey Judiciary Foreclosure Mediation Program, Home Page (online at

www.nj.gov/foreclosuremediation/) (accessed Sept. 22, 2011); National Consumer Law

Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

State of New Mexico First Judicial District Court, Forms (online at

www.firstdistrictcourt.com/Forms.htm) (accessed Sept. 22, 2011); National Consumer

Law Center, Foreclosure Mediation Programs by State (online at

Federal Home Finance Agency Office of Inspector General | 24

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

National Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

Save the Dream Ohio, Help for Homeowners (online at

www.savethedream.ohio.gov/Homeowners.aspx) (accessed Sept. 13, 2011); National

Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

National Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

National Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

National Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

The University of Vermont, Mortgage Issues and Foreclosure (online at

www.uvm.edu/consumer/?Page=foreclosure.html) (accessed Sept. 13, 2011); National

Consumer Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 22,

2011).

Washington State Department of Financial Institutions, Washington Foreclosure

Mediation Program (online at www.dfi.wa.gov/consumers/homeownership/foreclosure-

mediation.htm) (accessed Sept. 22, 2011).

Marquette University Law School, Milwaukee Foreclosure Mediation Program (online

at www.law.marquette.edu/foreclosure/) (accessed Sept. 22, 2011); National Consumer

Law Center, Foreclosure Mediation Programs by State (online at

www.nclc.org/issues/foreclosure-mediation-programs-by-state.html) (accessed Sept. 29,

2011).