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Foreclosure overview and buying opportunities

By RealtyTrac | Published: Jul 28, 2010 | 46 Comments

What is Foreclosure?

Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files a public default notice. The foreclosure process can end one of four ways:

  1. The borrower/owner pays off the default amount to reinstate the loan during a grace period determined by state laws. This grace period is also known as pre-foreclosure.
  2. The borrower/owner sells the property to a third party during pre-foreclosure. The sale allows the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.
  3. A third party buys the property at a public auction at the end of pre-foreclosure.
  4. The lender takes ownership of the property, usually with the intent to re-sell. The lender can take ownership through an agreement with the borrower/owner during pre-foreclosure or by buying back the property at the public auction. These are also known as bank-owned properties.

The foreclosure process presents three bargain-buying opportunities.

Pre-Foreclosure (Notice of Default, Lis Pendens):

Buying a property in pre-foreclosure involves approaching the borrower/owner and offering to buy the property. The borrower/owner can walk away with something to show for any equity in the property and avoid a bad mark on his or her credit history. The buyer has time to research the title and condition of the property and can realize discounts of 20-40 percent below market value.

More about pre-foreclosures

Auction (Notice of Trustee Sale, Notice of Foreclosure Sale):

If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction. Buyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction often offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner.

More about auctions

Bank-owned (Real Estate Owned):

If the lender takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender will usually want to re-sell the property to recover the unpaid loan amount. The lender will probably make sure the title is clear for any buyer, but the potential bargain is typically less than a pre-foreclosure or auction property.

More about REOs

Comments

By Smile,  Sun Aug 15 2010, 16:14
By Polanco,

Please let me know where the auctions will be held and the time and date. I also would like to know where can I see the houses that are in foreclosure. Thanks!
By Hector Ponce,  Tue Aug 17 2010, 07:00
Were are the auction held could you provide this information

Thanks
By Banty,  Thu Aug 19 2010, 08:49
were are the auctions held and how do find out dates of the foreclosure
By Kathy,  Sat Aug 21 2010, 15:55
please let me no auctions dates of houses in raeford nc
By Jamaudry,  Sun Aug 29 2010, 14:40
how and where these auctions held and how can i make a bid.
By Jrattner,  Thu Sep 30 2010, 19:12
Where the heck is the info where the auctions are. This site is a Joke
By Rebecca Flores,  Sun Oct 24 2010, 07:27
where are these auctions held and when where can I get more info? looking to buy in urbana il
By Gayle,  Sun Oct 24 2010, 09:26
How do you sign up to see the property.....and where are the answers to all of these questions......
By Amr Amin,  Mon Nov 1 2010, 07:12
i need to buy any foreclosure house can you give me your list for foreclosure homes,thanks
By Rocio,  Thu Nov 18 2010, 15:51
I also would like to know about where the auctions held and when,where can i get more information. What did you recommend for a first time buyer to do. Buy by the auction or foreclosure?
By Realestate Buff,  Thu Nov 18 2010, 21:22
Look up auction websites. A good one is "Williams & Williams" they auction all over US. but you can narrow your search down to the zip code. You have to register with or without an agent. You can preview the house, then show up with cash. Good luck.
By New Standard Real Estate Co,  Wed Jan 12 2011, 11:07
This property is REO, How can i or whom do I contact to put an offer. I am also agent. Can I get commission from it? 925 580-5205
By Mike Pristow, Donna Hodge,  Tue Jan 25 2011, 12:15
If you are buying properties that have already been foreclosed, and the bank has bought the house at the foreclosure (REO), there are several professional auction companies that will sell these homes. They usually are the homes that cannot be sold by regular real estate methods through an agent. They will let you be represented by an agent if you wish, and they will allow you time to secure financing. They advertise in the newspaper, on television and on the internet. However, if you are talking about a mortgage sale or trustee's sale when the owner actually loses title to the home, or a tax sale or HOA sale, those are usually held on the courthouse steps, and are usually noticed in your county's legal newspaper. In my area, Clark County, NV, which includes Las Vegas, these auctions are most often held on the courthouse steps, and sometimes held at title companies. They are almost always posted in the Legal News, and sometimes in the local newspaper. Purchasers must buy the properties with "cash" or certified funds, and it is not unusual to see people with suitcases full of money, or certified checks in lots of denominations. Both types of sale can be dangerous for uninformed buyers, as certain types of liens survive foreclosure and sale, and the sales are final, so the buyer is stuck with paying the liens The best bet for a buyer who wants to buy a foreclosure is to buy an REO through a reputable agent, where he can do an inspection of the house, receives title insurance, and can make the contract contingent on receiving financing. You can check with a real estate agent or title company in your area to determine where foreclosure auctions are held, but it's most probably "on the courthouse steps."
By Stephanie Theobald,  Mon Feb 21 2011, 16:03
It will be interesting research , we found a house that only shows up on trulia . never been listed for sale on the MLS ,gives no info about how to inquire about a purchase ,won't even give the address, unless your enroll in their service. yet there are legitimate real estate agents advertizing on this web-site ????
By Griselle,  Fri Mar 11 2011, 07:59
please let me know if you have any offer !! the owner will like to avoide foreclosure thanks!! to get more info on address
By Mj,  Wed Mar 23 2011, 23:13
I would like some direction on how to move forward to purchase these homes. Please advise.
By Chrisnwlc,  Thu May 26 2011, 14:03
do houses ever go for 8,000 or less in portland oregon at one of these auctions. I would really like to know some sort of a price range????
By SueEllen Naegle,  Sat Aug 13 2011, 10:02
Call me on how to find auctions and place bids. We are a large foreclosure Brokerage firm in Colorado. I deal with these everyday!!

SueEllen Naegle, Broker Associate
Sellstate ACE Realty
720.260.7774 (leave msg. I'll get right back to you)
By Courage,  Wed Jan 4 2012, 20:05
I would like to know how to save my first home out of foreclosure, I have another question when I purchase my home it was through the bank, after one year the bank sold my contract to the servicing agency, do you think its legal?. That is why many people like most of our houses are foreclosure. The Bank and their buddy the servicer are making money. The public we live in nightmare.
what is the answer for this please i need it.
By rhonda_48shea,  Sun Apr 22 2012, 12:07
this site was not helpful
By Matie,  Tue Jun 5 2012, 02:50
largest foreclosed homes database free. http://www.indexpost.com. It can help you a lot in what are you looking
By Robin Boyer,  Tue Aug 28 2012, 22:25
Your best bet is to talk to a licensed Realtor in your area. Everyones questions are specific and a local Realtor will be better able to advise you.
By Luvmyschnau,  Thu Nov 29 2012, 13:09
I am a widow with limited income, I have sold my house and am interested in buying a "deal" where I can get more for my limited money, but it seems to me all the foreclosures, short sales, etc., are snapped up by investors who fix n' flip these properties and have relationships with banks and mortgage cos. so they get priority treatment. What is the best way to get in on this market?
By maytaleb,  Tue Mar 19 2013, 16:51
I need to buy any foreclosure house in Okemos can you give me your list for foreclosure homes,thanks
By maytaleb,  Tue Mar 19 2013, 16:52
I need to buy any foreclosure house in okemos can you give me your list for foreclosure homes,thanks
By Brian Smith,  Thu Mar 21 2013, 03:36
Foreclosure is just like a nightmare to any homeowner. Fortunately, these dates the foreclosure rate across the US is not so high as it was a few years ago. Taking out a long-term loan requires responsibility and confidence in your repayment ability. There are consumers who apply for mortgages only because of low interest rates and then fail to repay because they finally understand that it’s necessary to make payments during all the loan term. So in case you have made a decision to take out a loan then make sure that you’ll be able to pay it off.
Brian from http://paydayloansat.com/installment-loans-for-bad-credit/
By docmike9,  Tue Apr 16 2013, 23:17
Yes but rent is higher, after savings on income taxes and the land lords have really jacked it up so it's cheaper to buy, especially condo if HOI is reasonable.
It's the myth that credit scores are accurate too. Why does everyone treat score like the holy grail? My " bad credit" is turning into "good credit" as I get the total lies and other stuff that showed up when I was out of commission for three years. 5 more lying collectors to go. I'm at 640+.my phone is 714 650 7158. I want 2+2 in long beach. there is a foreclosure you have. Can qualify lst home or VA 5% down, will pay up to 175 K Credit ration is about 00.25
By docmike9,  Tue Apr 16 2013, 23:18
ratio, not ration. a little slip there.
By Mela Stickler,  Mon Jun 17 2013, 11:50
I would like to buy a home in foreclosure or short sale..anyone....call me at 281-323-5770 for more info.
By Mela Stickler,  Mon Jun 17 2013, 11:50
I would like to buy a home in foreclosure or short sale..anyone....call me at 281-323-5770 for more info.
By Goodsportmedia,  Wed Jun 19 2013, 09:15
Can these properties be purchased with a VA loan?
By eslater,  Mon Jun 24 2013, 09:01
i would like to purchase a home i have the income but not perfect credit located in Moncks Corner SC.R.Butler 843-539-6801
By levilady3,  Sun Jul 14 2013, 07:36
I am looking for a property that I can buy w/ cash and close fast. I will not pay anymore then 30,000.00 So if anyone has a listing or foreclose I would be able to close ASAP then call me. Do NOT CALL ME IF IT IS A HUNK OF JUNK! I WOULD LIKE A CLEAN READY TO MOVE IN HOME. MY HUSBAND IS ALMOST 55 AND HAS HAD SEVERAL STROKES AND I DON'T MIND A LITTLE WORK THAT I CAN DO BUT NOT A TOTAL FIXER UPPER.
HOME (813)926-4126 CELL (813) 263-4900
By jmvolineer,  Sun Sep 29 2013, 10:28
If i buy a foreclosed home from the bank can the old owners come back and reclaim it from me?
By Jim Cramer,  Wed Oct 16 2013, 14:50
jmvolineer - Once a home has been taken back by a bank it is now owned by the bank. They therefore (the bank) have the rights to sell the property to a new owner. You should have a Title Search done and get Title Insurance to make sure all has been property documented and recorded.
By Carmen Brodeur- Top 1% Realtor,  Tue Dec 3 2013, 08:41
Foreclosures have practically vanished in the Scottsdale, AZ area. The market has really come a long way over the last few years.

http://www.TopScottsdaleHomes.com/current-market-trends
By 1galway,  Sat Mar 1 2014, 20:38
I would like listing of foreclosures and short homes in Upstate NY either in Harriman, Roscoe, Rockhill NY, Pine Hill or Woodridge NY with in two hours from NYC. Thank you Mary Faherty
By generalpopo,  Tue Mar 25 2014, 19:15
I would like to know where the foreclosures are going to be in the san Gabriel California area
By thienlongquoc,  Sat Apr 12 2014, 20:53
Please let me know where the auctions will be held and the time and date. I also would like to know where can I see the houses that are in foreclosure. Thanks!
thienlongquoc@yahoo.com
By thienlongquoc,  Sat Apr 12 2014, 20:53
Please let me know where the auctions will be held and the time and date. I also would like to know where can I see the houses that are in foreclosure. Thanks!
thienlongquoc@yahoo.com
By thienlongquoc,  Sat Apr 12 2014, 20:54
Please let me know where the auctions will be held and the time and date. I also would like to know where can I see the houses that are in foreclosure. Thanks!
thienlongquoc@yahoo.com
By weedy623,  Wed Apr 16 2014, 10:43
Will be in area of plattsberg collage in August can you let me know what property is up for foreclosure
Weedy623@aol.com
By Greg & Cindy,  Thu Apr 24 2014, 17:41
Very interested in this property, have cash,
By Martin,  Sun Apr 27 2014, 13:04
Can you please let me know where the auctions in Canton, OH will be held and the time and date. I also would like to know where can I see the houses that are in foreclosure. Thanks!
Enerchidoc@gmail.com
By Michael Way,  Fri May 30 2014, 08:10
Can I please be notified when there will be an auction in the Lake George NY area, I would like to see the houses in foreclosure!! Thanks for your help !! tcspri21@gmail.com
By hiways.engineering,  Tue Jul 8 2014, 02:38
i am interested in buying any foreclosure single family home in Houston or nearby area. i can pay $40000 in cash. you can contact me at hiways.engineering@gmail.com

thanks
saleem

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