Is buying a house in foreclosure something that you have been considering? When does foreclosure happen for a homeowner? It is when they can't pay for their obligations anymore, and the lender wants to get his money back. Be aware, though, that there is a process, and you can't just bid on a property because the borrower failed to pay for it. The process is usually like this:
- Payment default - When the borrower misses at least one payment, he will be given a notice. Then a demand letter comes next when two payments are missed.
- Notice of default - Depending on which state you are in, a notice of default will be placed prominently on the home after 90 days of missed payments. The loan will then be turned over to the foreclosure department. Another 90 days will be given for the borrower to update his records and a chance to reinstate the loan.
- Notice of Trustee's sale - This will be recorded in the country of the property, and for the next three weeks, the notice will be published in a local newspaper for all to see that the property will soon be available for public auction. Details such as the description of the property, address, and the owner's name will be included in the publication.
- Trustee's sale - By this time, the property is officially entered ina public auction to be won by the highest bidder who has submitted all the needed requirements for the sale. The lender will base the property's price on the value of the loan, unpaid taxes, liens, and any cost that is part of the sale. Once the deal is finalized, the former homeowners must leave the property to give way to the new owners.
- Real Estate Owned (REO)- If by chance the property is not sold during bidding, the lender, as the owner, will sell the property through the help of a real estate owned asset manager.
- Eviction is the last step of this process. The former owner may be given a few days to prepare to leave and remove their stuff by the date that is indicated in the notice. A sheriff can be called to visit the property if the former owner does not leave.
If you need to know more about this, let us know how we can help you
. Who knows, you might be able to snag a good deal without breaking the bank.