what happens in a foreclouser?

Asked by C Bland, Berlin, MD Thu Feb 19, 2009

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Jonathan S Tucker’s answer
Jonathan S T…, Agent, Columbia, MD
Thu Feb 19, 2009
C Bland, Jon Tucker with RE/MAX 100.

A foreclosure consists of many stages. I have worked many short sales, pre-foreclosures, and bank REO sales and listings. Short sales/Preforeclosures can take 4-12 weeks or more. I had one that went almost a year. Bank REO sales are relatively quick, 4-6 weeks.

The Process:

1. Mortgagee becomes delinquent. Bank will start required legal notifications at 60 to 90 days late.
2. The lender typically will offer various work out options to get the borrow back on track. Workouts are another whole blog topic.
3. A substitute trustee is appointed formally with the court by the lender. They are usually law firms who specialize in foreclosure. 30 days.
4. The substitute trustee petitions court for foreclosure after meeting all legal notification requirements. 30-60 days.
5. The trustee schedules an auction sanctioned by the court, often at the court house. 30 days
6. The public may bid. The lender typically has a reserve equal to the market value or loan note, which ever is higher. Usually the lender/bank buys the home back.
7. The court must ratify the public auction sale. 30-60 days.
8. The bank takes final possession and it is now Real Estate Owned (REO) by the lender.
9. The bank will often list with a Realtor, market on a REO website, or send to auction.
10. Final sale price is negotiated by the lender, but must be approved by the actual investor/owner behind the lender/mortgage servicer. This is another whole blog topic.
11. The contract/offer proceeds like any other real estate transaction, although many banks don't pay the same fees, commissions, seller help, etc. They all have different rules and procedures.
12. The new owner starts making their payments to their new lender/servicer/investor.

I hope that helps. Feel free to email me questions. I would like to work with you if you don't have a Realtor.
Thanks, Jon Tucker, 443.538.4316, TuckerRealty@comcast.net, http://www.JonTuckerHomes.com.
2 votes
Bill Eckler, Agent, Venice, FL
Sat Feb 21, 2009
C Bland,

As a buyer working with a real estate professional you would submit an offer on the property to the bank. There may be additional negotiations between the buyer and the bank before both parties agree on the terms of the sale.

When dealing with "foreclosures" banks generally request an "As Is' contract, cash deposit, and a letter of approval or proof of funds to cover the sale of the property.

An experienced agent will be able to lead you, step-by-step through the buying process.

Good luck
0 votes
Marilyn Emery, Agent, Chevy Chase, MD
Fri Feb 20, 2009
I'm not sure if you are asking the question as a home owner in trouble of losing your home or someone looing to buy a foreclosed property.

If you are behind in your payments and fearful of losing your home the best thing is to try and work out a restructure of your loan with the bank. Any correspondence from the bank should have the name and extension of the loss mitigator for your loan . Call them and try to rework your loan to help you save your home.

If you are trying to buy a foreclosed home you should look for properties that are bank owned, not properties subject to third party approval. Those will be properties the bank has already taken possession of. the price will have been determined by the bank and you will have less time waiting for the bank to determine the sale price of the home.

If you have specific questions feel free to contact me directly I willing answer your questions the best I can.

0 votes
Kevin & Moni…, Agent, Ocean City, MD
Fri Feb 20, 2009
Dear C. Bland,
Acquiring bank owned property can be difficult at best. There is not always a pre-determined process that is the same all of the time when a bank takes back a property from an individual owner.

May I suggest that you read the following two articles that I wrote about regarding bank owned properties and short sales.

Any other questions I can assist with, I am happy to help.

My best from the Beach.
Monica McNamara
Ocean City, Md. 21842


0 votes
Dallas Texas, Agent, Dallas, TN
Thu Feb 19, 2009
Undetermine of what your question means I will try :

Foreclosure is a home owned by the bank taken from a home owner or builder who could no longer make payments on the property.

Bank will review all professional files regards pictures, comps for property determine what is list price offer.

Bank will contract thru assest mgmt company OR realtor list home for sale anticipation for new home owner.

Submit an offer on any home requires lender approval letter . You must contact a mortgage broker prior working with realtor

Annual tax benefits of owning a home.
Web Reference:  http://www.lynn911.com
0 votes
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