Editors note: Each week foreclosure notices seem to dominate the legal pages. As a result, The Islander will be focusing on foreclosures: what it means to foreclose; what to consider when purchasing a foreclosure, how to buy your foreclosed home back; and the affects foreclosure has on the real estate market and economy. This is the first part of a three day series. While the information in the following story is provided by a professional real estate broker it is not a substitute for legal advice when handling a foreclosure.

GULF SHORES, Ala. The real estate market, locally and nationwide, has turned upside down — another affect of the down and out economy — and the results can be seen in the form of foreclosure signs.

“Three years ago it was difficult to find a foreclosure. At any given time there may be only two or three,” Nancy Harmon, owner and broker of H Brokerage Co. Inc., said. “Now I can easily pull up 200 to 300.”

With the fear of foreclosure too close to home, it’s important to know the facts.

“There can be several things that cause a foreclosure,” Harmon said. “A lot of people have been caught with an adjustable mortgage rate, and then with the combination of our insurance raising in the last few years and our taxes going up, some people’s payments have increased $300 to $400 a month.”

With payments increasing and income remaining stagnant, people are experiencing cash flow problems, and some are missing their notes.

“Most people are upside down in their house so it’s very hard to refinance,” Harmon said.

If a person owes more for their house than they could sell it for they are upside down, Harmon explained.

“They either bought at the height of the market or refinanced at the height of the market.”

In the first month a payment is missed a notice will come to the door. Within three months, a mortgage company or bank is allowed to begin the foreclosure process.

“A few years ago, at three months, they would run the ad in the paper and kick them out. Now they are working with them a little bit more,” Harmon said. “Normally they will offer them a short sell or a deed in lieu of foreclosure.”

A short sell is an offer the bank makes where they will take less than what is owed on the house to finish the mortgage. Harmon said now, if a house is foreclosed on, it’s because house payments have been missed for six to 10 months.

To complete the process, an ad must run in the newspaper three times stating that foreclosure is on the horizon.

In Baldwin County, foreclosure announcements are required to be published with Gulf Coast Newspapers.

“The Alabama Supreme Court determined in 1985 that Gulf Coast Newspapers, rather than the Baldwin Register, met requirements of a general circulation newspaper as described in state codes, and is the paper of record for publication of legal notices in Baldwin County,” GCN staff writer Graham Heath explained.

The owner of the home will be notified by certified mail each time the ad runs.

At that point, if the owner does not respond with the money, the house is put up on the auction block.

If a house doesn’t draw the lender’s desired amount, they buy it back and take ownership of it.

County reporter Graham Heath contributed to this report.