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Foreclosures
How does a home become a "foreclosure?"
A home becomes a foreclosure property when a property owner goes 3 months without making a payment to the lender. At this time, the lender is legally allowed to proceed with reclaiming the property, also known as the "foreclosure process." Once the property is reclaimed, it is technically considered to be a "foreclosure" and is included in the foreclosure list.
Are foreclosure listings public information?
Information on homes that are reposessed by the Department of Housing and Urban Development, Fannie Mae, Freddie Mac, and the Department of Veteran's Affairs are public information.
Can I hire someone to help me find a foreclosure?
The listings contained here at CurrentBankForeclosures.com are accompanied by the contact information for the property. Often times, this is a real estate agent.
How difficult is it to buy a foreclosed home?
Typically, buying a foreclosed home involves slightly more paperwork than when purzchasing a normal home and does take a little longer to complete the process. However, the person you contact regarding each property will be able to help you complete most of this paperwork and guide you through the process.
Bank Foreclosures Laws
A home is foreclosed by a bank as the owner defaults upon the month-to-month house mortgage payments. As a home is bought via a partial cash or total cashless transaction, the home itself is the security for a loan. The purchaser signs an agreement with his or her bank in regard to the terms and conditions of the loan's payment. They additionally sign an extra agreement for placing up the home as security for the mortgage; therefore, empowering the bank to obtain possession of the home if the purchaser defaults in his or her payment.
The bank or lender could call in the loan as a purchaser defaults in the payment of the loan. The bank typically recovers the home loan by disposing of the home by selling it or via an auction, according to the agreement with the purchaser. The act will be governed by the house foreclosure law and a lender must follow the regulations prescribed by the state.
The Judicial Process
The state must foreclose the house through the court of law. In this process, a bank or lender must prove to a court that the borrower became delinquent. This process begins with a lis pendens that means 'lawsuit pending' notice that's filed with a court or public property department of the area government. The act notifies the public concerning the case filed against a borrower and the home which is being foreclosed. As the foreclosure is confirmed, the home is sold via a public auction.
The Non-judicial Process
Within this process, a lender will file a default notice with a county clerk or property records office. As the notice is served, a lender must notify the public concerning the sale or auction of the home, in a way as directed by the officials. The home is auctioned to the highest bidder in the instance of a satisfactory bid. If bids are unsatisfactory, a lender could retain the house.
The process permits the lender to file his case of deficiency judgment against an owner if the sales cost is less than the outstanding quantity. Many states offer a borrower with redemption rights, in which a borrower could buy the home back by clearing the amount due.
HUD Financing and Assistance
The Department of Housing and Urban Development (HUD) does not provide financing to buyers directly. Buyers must individually gather funds to purchase these foreclosures through either their own income or from lenders they solicit themselves. If an individual is able to gather these funds, or already have them, then you are eligible to purchase a HUD home.
There are discounts available to those willing to live in specific areas, such as that of a single-unit per property revitalization area. Along with that choice there are different programs that will assist individuals dependent upon their qualifications, such as the Good Neighbor Next Door program which is a program available to law enforcement, EMTs, teachers, and firefighters. This program is designed to help encourage the development of a revitalization area by having these qualified individuals as neighbors to other HUD owners, and as incentive offers foreclosed HUD homes at nearly fifty percent discount.
As for learning about these foreclosed HUD homes and when they are available, any time a single family property is acquired there a sign there will be a sign displayed to inform individuals of who is managing the property to prepare it for sale. It is during this preparation time that the property is appraised for value and that title issues to the land is sorted out, as well as having the property judged to see if can be used inside the HUD's different discount sales programs.
Quality in HUD Foreclosures
Even though the price of a foreclosed HUD home is something to behold, the quality of these foreclosed homes can often be questionable to new buyers. It is strongly recommended that you have a professional inspection prior to purchasing, as you the new owner will be financially responsible for making any repairs needed at additional costs to the buyer. Although these homes aren't in the best of shape, they do follow a set of minimum property standards that must be met before the foreclosed HUD home can be put up for sell.
The benefit of buying a foreclosed HUD fixer-upper is that of the ability to apply for the FHA 203(k) rehabilitation loan to assist in the financing. Previously when an individual went into a buyer agreement with a foreclosed HUD that individual had to first obtain financing for the dwelling, additional funds to do needed construction, and a maintain a long term mortgage to pay on the immediate loans until the work is completed.
Previously the only way to gather these funds was to take on acquisition and construction loans that had unusually elevated rates when it came to interest levels. The current program, Section 203, is standardized to quell this by offering just one mortgage long to finance both aspects of the property. Typically these loans are at far reaching rate as opposed to high interest flexing short loans.
Buying a HUD Listing
HUD homes are 1-to-4 unit properties that are the results of a HUD foreclosure action on a person's FHA-insured mortgage. The house, now foreclosed, becomes the property of HUD - Department of Housing and Urban Development - which then sells it at a lower premium cost in an attempt to recover part of the loss of the foreclosure.
Almost anyone can buy a HUD foreclosure home as long they have the cash or they can qualify for a loan (restrictions apply to loans). The ability for a HUD home to become available to buy by anyone comes only after a length of time called the priority period, which a period that only those who are buying it as a primary residence may purchase the foreclosure property. After this time, the foreclosure home becomes able to be sold to anyone, including investors. Registered real estate brokers are able to bid in place of their clients on foreclosed HUD properties.
For those who are evacuees of Hurricane Katrina, Wilma or Rita, there may a chance for you to purchase a foreclosed HUD home at a discount. Contact the seller for more information regarding the possibility of this discount.