Understanding the Foreclosure Process
A foreclosure occurs when a property owner cannot make the interest payment and cannot make the principal payment on the loan. When this happens, the property will be seized by the lien holder, the bank and sold in order to recoup some of the loan monies.
Foreclosures vary from state to state but in general, the following is a brief outline of the process:
• In many cases, the bank will give a grace period to make payments current. Once the payments are three months behind, the bank usually files a “Notice of Default” (NOD) to officially put the homeowner on notice that foreclosure proceedings are beginning.
• If the default is not corrected, the bank will service a Notice of Sale to the homeowner and the property will go to real estate auction.
• The opening bid is usually equal to the outstanding loan balance, interest accrued and all fees including attorney fees. If the bids do not satisfy the lender, the home stays with the bank as a real estate owned (REO) property.
• REO properties can be purchased from the bank with a clean title at a low cost.
If a buyer is looking for pre-foreclosures, foreclosures or REOs, wading through the paper work can be daunting because each state has its own set of rules. Now, there is a service that eliminates the research for a real estate auction for buyers. The company is Realty Note Bid, everything is done for the buyer. All you do is choose and state and check the list. Check it out for yourself.