The foreclosure process is a judicial procedure that consists primarily of three stages. The sheer numbers of foreclosure process raging in the courts has overburdened all branches of the government. The courts are not being able to tackle so many foreclosures and the staff is either working overtime or new appointments are being made to handle the backlog. Foreclosures are taxing the administration because of related problems of law and order as well as health that is linked with empty foreclosed houses. The legislature is in a tizzy trying to work out laws that will act as a silver bullet to save the situation of thousands angry citizens being evicted from houses and a furious lending group in the grips of a credit crunch.

The foreclosure process starts with the lender sending a notice of warning to the defaulting borrower. The foreclosure process grants a certain grace period for the borrower to get back bearings and try to save the house that is the home. The foreclosure process differs from state to state. In some states as per the rules of the local foreclosure process a very short time is allowed for the borrower to save himself or herself. However laws are being enacted in most of the states to allow for 90 days of respite for the borrower.

The second stage follows the pre-foreclosure stage wherein the lender proves to the court the right to realize dues by seizing the mortgaged property. This leads to a court auction. If a successful sale is conducted the lender can take from the proceeds only that much that is due. The tax authorities take their pound of flesh. What is left over goes to the hapless ex-owner of the house to start a new life with a bad foreclosure mark on credit ratings.

The reality is that in the current real estate market the worth of the house has become less than the value of the loan. Thus buyers are at a premium. Borrowers are simply walking away from houses that are not worth fighting for even if rates are reduced.

When the court auction fails the houses are repossessed by the banks that now try to sell these off, offering heavy discounts in the open market. This further pulls down the housing market.

Various laws are being enacted to change the foreclosure process laws in such a way that some relief is given to the foreclosed victims. The foreclosure process is a lengthy one and because of this the lenders are finding that by pursuing it to its logical end is time, money and energy consuming. More lenders are being responsive to loan modifications.