Frequently Asked Questions

Q: What is Foreclosure?

Foreclosure has been a commonest term we have been hearing off late due to the severe economic crisis everyone is in due to the crash in the world economy. Foreclosure is a legal action that is done by a bank or lender who lends with mortgage of the property. If you have ever taken a loan and could not pay back then what ever property against which we have taken the loan will become the property of the lender who so ever. This property will be generally sold or put up in auction so that the lender can recover the rest of the amount that is pending for him. This is what foreclosure is precisely.

There will be a pre-closure period which will start when the lender sends a notice to the owner of the property demanding payment of the dues. It is during this period they can terminate the foreclosure by paying the amount that is due to them. Also its is possible in this period one can sell off their property to get the amount needed to pay the lender .Doing it this way they can save and maintain the credit ratings. If this did not happen then the lender will put the property for sale most often at an auction or through a realtor.

There are two kinds of scam that are rampant these days. The first one is that in which you are approached by the scammer in disguise of buying your property. They pay a nominal amount that would be sufficient to get you out of the foreclosure in lieu for the transfer of title on their name. They give an option to buy back the title when we are well off but he is never seen after that and he ends up having the title for your property at a cheaper price. You will never get back your property and you are ripped.

Another type of scam that is happening these days is that the scammer or the companies in disguise will promise to give you a fresh loan so that you can clear off the debts of the foreclosure. But in this, the reality is that your documents will be forged and finally you will lose your property. With this it’s just that your old mortgage is cleared with a new mortgage and if you fail to pay up again you will become an offender.

The best way not to fall trap into such things is to read clearly any paper that you are signing. Check the documents thoroughly before you sign and give them to anyone. A trust worthy attorney can help you in this regard.

Q: How to Buy Foreclosed Homes?

It may be strange for you but it is also true that many people, who generally look for the cheap deals on the real estate, generally ignore one opportunity for sure in saving lots of money. The opportunity here is in purchasing a foreclosed home. You are either dreaming about your own house or you yourselves want to try your hand at the real estate business. On thing that you should be looking for is the foreclosure property deals. They not only save us about twenty to thirty percent of property’s market value. In many cases, it offers many more advantages just like no down payments or only a little amount of down payments.

However, before making a good bargain and purchasing the foreclosure property for a very less price which comes at a much discounted price which is very low when compared to the general market. You must learn how to find this kind of property.

Here are a few options that you can consider before purchasing a foreclosed property:

Look for the Bank’s Public Notice in the Newspaper. When the foreclosure is going to take place, then the bank or the lending institution will make the formal announcement regarding it in the newspapers in advance. It will be published in the legal section of the local newspapers. The notice comes in either of the following two names: Lis Pendens or Notice of Default. It will be given along with property’s address as well as the current owners name available in it. You will also have the initial information that is needed to proceed. However at this stage, if you are able to purchase a foreclosure property that is called as the pre-foreclosure stage. Then you can save large amount of money.

Also look for the Foreclosure Property Auctions. These are generally advertised in the business or local news papers. It is also advertised sometimes online. The notifications are generally available upon subscribing for it. In addition to this you can directly contact the lending institutions to enquire about any auctions that are to be scheduled in the near future.

Q: How to Invest in Foreclosures?

Foreclosure investing has been made more profitable along with the lower interest rates that are available. Investing in the Foreclosure real estate is an excellent opportunity for those who like to benefit from the downside market. The same time they build their own real estate portfolio.

How much should you be expecting to be spending to begin investing in the foreclosure?

Using this evolving opportunity, even the financially challenged people will be in a position to make profit.

Even if you are really on a very tight budget, do take heart from it. There are a few clever approaches to investing in the foreclosure without taking any credit or without any large sums of money.

To save some amount of time and to prevent the various head aches attached to it, you need to do some research. You need to get familiar along with foreclosure market. You can do this by reading everything on which you can lay your hands upon, regarding foreclosures. Then you need to examine the information thoroughly.

You should choose to invest only in the better neighborhoods. Generally these are various areas that recover from crunch in shortest time period. Reading several local newspapers in the area in which you like to invest considered as time that is well invested. You also need to focus on knowing your target area thoroughly as good as you can. You should be so thorough that you have to become a neighborhood expert in your chosen area.

However, you need to simply do this. The next thing that you should sincerely do is subscribe with a very good reputable foreclosure. The monthly cost average for any good service ranges somewhere between thirty to forty dollars. This will be considered as a reasonable expenditure when you compare it to wealth of information that you will be getting. Excellent services are provided by several reliable companies. You should choose the ones that save your time and also provide fast and reliable leads. The business of investing in Foreclosures is made easy by the various foreclosure list providers. You must also know how to Purchase the Foreclosures

Q: How Does the Foreclosure Process Occur?

Foreclosure process can be quite a daunting task with each state having its own set of rules and legal obligations relevant to foreclosure as well as considering the fact that you will be trying to keep up with the hour glass as well.

The payment due on the first can be dealt with within the grace period of around 15 days provided by the bank with no fee being imposed. If it is not paid, then after the 16th day, an assessed compensatory late fee has to be paid which will vary depending on the mortgage’s total cost. Those creepy calls will soon follow, the lender demanding an explanation for your inability to do so. Days 45 to 60 are probably the most unnerving where the call frequency increases, followed by a demand letter notifying you of your debts.

A Default Notice by Certified Mail is the most common practice of informing you of your dues, including late fees and various collection costs. After a hiatus of around 90 days, the collection department will spring into action sending your documents to a local legal representative or attorney. A local lawyer will then get your paper work, recording the notice of default sent to you at the courthouse and the newspaper as quickly as possible. The case is then dealt with as soon as possible with both parties seeking an explanation from the other.

Most cases do end in some sort of mutual agreement regarding payment or a fixed allotment of time for clearing out those debts, both proving beneficial to the one entangled in this whole process. Make sure you have a clear mind as a well planned and wise strategy can often help you get out of this intricate web of things

But there still seems to be some glimmer of hope .taking time into picture i.e. , the best way to go about this whole thing is to equip oneself with the entire foreclosure process per se before the clock leaves you high and dry . Moreover you like other people should stop at nothing to halt this creepy foreclosure process. Good luck and Take Care then!

Q: How to Avoid Foreclosure?

Avoiding foreclosure seems to be the name of the game for all property owners given the economic crash-down with several cases of short sale listing also being reportedly increasing in the current Scenario. Although foreclosure is a pertinent dogma which every real estate dealer has to think of, considering the sub prime crisis and the hard hitting credit crunch, it can be kept at bay if one knows the primary causes.

The new world since the global recession has experienced a down tide, thus attributing to a paradoxical economy which has been mainly attributed to the rising foreclosure trends. Retrenchment, Personal errands and troubles, debt obligations, mortgage related fraudery have all added to this chaos and commotion.

Although foreclosure is an ugly fact that each and every real estate businessman has to deal with, taking preventive measures can go a long way in preventing those unpleasant economic circumstances. Such measures include taking steps to avoid receiving the notorious Notice Of Default, letting Lenders and Banks know if the payment obligations cannot be fulfilled as they are pretty safe measures which one can bet on. Extending the possibility of a Repayment plan to fulfill those obligations is a safe measure which can be relied upon. Modifying the existing loans interest rate or freezing it to prevent its bloating or to make it a manageable chunk which you can financially procure is also a viable option. A short sale usually relevant only for properties with a pretty less market value compared to the mortgage amount is also a sound measure provided the lender is informed before the property is put on the list.

Foreclosure even though is a scary proposition is just a passing stage in the ever booming real estate market sector which every home and property owner needs to face relevant to the neo economic conditions which stand testimonial to our current market trend. The best way to beat it at its own game is to find the right set of people to help you get through this with the required resources. Wish you a happy journey though these tough times if you do encounter them.

Q: Why Purchase at a Foreclosure Auction?

Lenders usually hide nothing when it comes to an REO based foreclosed property. Getting this checked with the auction company does help though. These, inherently misinterpreted forms of real estate marketing basically involve an owner of a property wanting to sell his property while retaining as much value as possible. Misunderstandings usually arise as a result of governmental regulations which permit the lender to sell the property only at realistic prices with the lender often selling them at prices below conventional rates, sometimes properties requiring repairs to make them usable. Lenders usually offer very attractive deals.

Auction companies usually market the auctions big-time leading potential bidders into a belief that the property can be bought for a price below the actual price the lender can do so. Usually during an auction, the highest bids recorded usually retain this “steal of a century” valuation and the final sale bid or price is insanely low with the sale, subject to the consent of the lender. As the rejection of this ridiculously priced bid is not an open option until a few days before actual bidding starts, the bidders are lead into believing that the property will be sold for that low price whereas the property was never sold, and the whole bunch of people were actually doing nothing.

Media Houses try to report sales figures from auctions with the pre-notion that the property was actually sold for such a low price, this propelling the rise of false improbable deals on the property of interest. To add to this confusion, the bidders in the next auction become even more conservative.

Irrespective of all of these minor hiccups, there is nothing which can beat a Foreclosure auction when it comes to buying property at throwaway prices. Every auction is simply a matter of using ones common sense ending in a pretty concise, fair and quick fashion requiring a bidder to be aware of “free houses” with the most realistic bid earning him the ownership of his desired REO property. As a bidder, make sure that you place a bid which you can honor before the auctioneer ends a bidding session knowing that once you place a bid, after the bell goes, you will be bound by a contract to fulfill your obligation. Have a great time at the auction then!!!

Q: What Causes a Foreclosure Auction and What Happens After the Auction?

Getting through a Foreclosure is one whirlwind ride. But the post Foreclosure confusion is one that has troubled bidders and previous owners alike. Let us review the salient things which flutter by during the post foreclosure period.

For starters, depending on laws specific to the region, a redemption period is offered during which the previous owner can retain his house through adequate financing. It is the decision of the new owner to evict the old owner if he is still over there. The home in case of a void bid is considered to be an REO, with the lender still assuming possession, his decision on putting the property up for grabs remaining the sole authority.

All of the auction money will be used in paying off the debts with priority being given in paying owed real estate taxes owed followed by the mortgage. If there isn’t enough cash to clear the whole mortgage, it remains the responsibility of the previous owner to clear the debt. The debt is considered to be an unsecured debt as the owner is no longer in legal possession of the home. If one runs short of money after paying out the mortgage, the lien holders and creditors who filed themselves eligible during the foreclosure come into picture. This period is usually a nightmare of sorts for the poor person who has to go through this entire sequence of events as he is left with a limited number of options which he can choose from to ascertain his next move in the post Foreclosure hiccup. The decision taken here usually goes a long way in sorting out the mess he would have landed himself into.

Once the foreclosure is done, the previous homeowners are in for one long walk to the park as they have to consider credit reestablishment, getting another house and others. But Nowadays, with the advent of many small scale financing firms and credit offerings, once can rent a place or even a home without even going through a credit check. So there are many options to consider post foreclosure. What will you are doing?