Realtors®
Foreclosure 101 I’d like to walk you through all the terms you are hearing in the market place regarding Foreclosed and REO homes. · Foreclosure – If the homeowner stops making payments on the mortgage, the lender repossesses the property and it is Foreclosed. · Notice of Default (NOD)- The homeowner has missed enough payments to warrant a formal Notice of Default from the lender. The owner has a period of time to bring the loan current before the bank repossess and sells the property. · Notice of Trustee Sale (NOS)- This is the next step after the Notice of Default. This is when the property is Sold on the Courthouse Steps! The purchase is “Cash” only. In most cases the property goes back to the lender. · REO (Real Estate Owned-Bank Owned) – These are the properties that did not sell at the courthouse steps. The lender bought them back and is now putting them on the market for the general public. Buying Foreclosures There are risks at any phase of the process you have to weigh it out and decide what is right for you! Trustees Sale - Buying on the court house steps you are buying pretty much sight unseen. There is usually no access to the property in order to walk through and do any kind of preliminary inspection. It is imperative you do your homework to know if you are getting a clear title with no outstanding liens. They do not tell you this at the time of the sale and it is not their responsibility to do so they are merely “Auctioning” the property. REO - After the foreclosure and the lender owns the property and is trying to resell it the liens are cleared or confirmed and cleared through the escrow process of the sale. With an REO you get the opportunity to inspect the property as well. These homes if in financeable condition you may get a loan to purchase. Avoiding Foreclosures Well this one seems obvious but first and foremost pay your mortgage payment this is the first step in “not” being foreclosed on by your lender. However easier said than done, right! The current market conditions, economy and type of loan you may have and cannot refinance could put you at risk. Most important, do not ignore the situation. Here are some options: · Loan Modification – If you are still employed and can make a payment maybe your lender will do a “work out” or loan modification. · Forbearance – This is similar to a reinstatement. Payments can be delayed if you can work out a lump sum payment, bringing the account up to date, in the near future. · Refinance – Although this is not an option for most do to the declining market for some it is an option ask your lender. · Deed in Lieu - This is where you give back your home instead of having it foreclosed on. It does affect your credit record, but it’s definitely not as bad as having a foreclosure listed. · Short Sale – This is selling your home short of what you owe. There may be tax implications so it is important to contact your CPA or Tax Advisor. To view Foreclosure listings by price range, please CLICK HEREand select the price of your choice. If you'd like to check out my "Find a Home" button, you are welcome to type in your own criteria to receive listings automatically to your email! If you have additional questions please do not hesitate to give Us a call. We would be happy to help any way I can! |
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