Repossessed Homes

A home is repossessed after it suffers a long journey through the foreclosure trail. Repossessed homes are hitting the headlines because of millions crumbling to foreclosure leading to the final end – the taking over by the lender of the security or collateral in the mortgage deal – the house. It is painful for many but many might make hay out of the situation if one knows how to pull the correct strings.

To know the end of the tale – repossession of houses – it is necessary to open the first page of the book – the credit culture. Loans, mortgages, defaults and repossessions have always been there from time immemorial. Loans are a part of life and failing to meet commitments are also part of the story of life with many impediments like illness, death, job loss and divorce. Foreclosure and talks of repossessed homes are today hitting the headlines because of the sheer numbers involved. Millions of units right across the nation, with variations of concentrations here and there are falling into foreclosures leading to repossession. The accusing finger shifts from the usual causes listed above to the sub-prime mortgage crisis.

The prime mortgage loan was sanctioned to those who had a good credit rating and a clear source of income. The loaned amount was in proportion to the income and consequently to the value of the house. It required a down payment and the terms were generous as regards time slab and interest rates. Many could not avail of this and ostensibly for this underprivileged section of society the sub-prime mortgage was introduced. The whole scheme was lax and lenient with no checks on income or property valuation. The lenders were motivated by greed of commissions. The borrowers were ignorant and fell a trap to the loan culture that had long been carefully cultivated in the society. There were no checks, evaluation was falsely inflated and the initial teaser rates were the irresistible lollipops. Property prices rose till suddenly the balloon burst. As soon as interest rates rose delinquency followed by foreclosures and auctions followed in sharp succession. Repossessed homes became inevitable. But the phenomenal rise in numbers is shaking the socio-economic fabric of the country. The net result was that without any buyers the units could not be sold off at auctions. So it reverted to the lenders who were mostly banks. These repossessed homes are now begging for sellers.

There are two types of people rushing to buy repossessed homes – the first time buyers of houses who want to build their nests and make it into a home and the speculators who are optimistic that as per usual economic laws the prices are bound to start rising again.

The advantage of a repossessed house is that unlike the auctioned units these can be inspected. Secondly these are free from lien – it being sold directly by the owner of the property. Banks are eager to sell low. Find out everything related by clicking on to US Repos for latest news and views.