Foreclosures happen for a variety of reasons and are not always a matter of poor financial planning. Unexpected things like a medical situation could wipe out a family, and their savings accounts. Though emotions can run high from the loss of a home, it should not be cause for shame; current statistics indicate that 1 out of every 200 homes will be foreclosed on, per the Mortgage Bankers Association. Let's take a look at what's involved.
Bank Owned properties are those which end up being owned by a lending institution who originally held the primary lien. These are the ones which failed to sell at auction, usually because the opening bid was never reached. Once the auction is concluded, the property is listed on the REO sheets, where bank employees work them to continue attempting to make a sale.
After the courthouse auction, if there are not bidders that met the minimum price the lien holder set, the property becomes an REO. Asset Management Departments then look for NRBA (National REO Brokers Association) Real Estate Brokers to market and list the properties for them. Lending institutions are not usually set up to be real estate management companies, and would rather not have rental income, when they could sell the property and get it off of their books.
When a property is presented as a below market opportunity, it means the lending institution needs to get it off their books, and the property may have been sitting empty for an extended period of time. In these cases, there could be considerable repairs, and other work involved, in bringing the property back up to codes. These are the properties which could be considered a good deal by investors.
HUD/VA properties are those which had the mortgage backed by a government agency, and does not mean that the actual money for the loan came through that department. The money still comes from other sources, such as lending institutions, but is simply backed by a government contract that insures the loan. These foreclosures can involve filing the correct documents to submit a bid on the property, or it might be one that is being handled through a Real Estate Broker.
A pre-foreclosure could be a good time to create a win-win situation for everyone involved. This is the point at which both lender and homeowner can agree to some terms, and the family does not have to vacate the property. It also means the property won't sit empty, and end up becoming a below market sale. There have been cases where the previous owner is able to recover and then return to making the payments.
Short Sales are simply pre-foreclosures which are under the same type of agreements, and the occupants are allowed to continue using it as a residence. In some cases, a government agency known as HAFA can become involved, and provide some financial incentives, which could help resolve the situation for the lender and the homeowner.
Foreclosures are something which simply happens in life, and are not always an intended outcome. Rules and regulations apply to the proper handling, of these circumstances, by all parties concerned. Whether it is the buyer, lender or person whose property is foreclosed on, these properties are eventually for sale.
Bank Owned properties are those which end up being owned by a lending institution who originally held the primary lien. These are the ones which failed to sell at auction, usually because the opening bid was never reached. Once the auction is concluded, the property is listed on the REO sheets, where bank employees work them to continue attempting to make a sale.
After the courthouse auction, if there are not bidders that met the minimum price the lien holder set, the property becomes an REO. Asset Management Departments then look for NRBA (National REO Brokers Association) Real Estate Brokers to market and list the properties for them. Lending institutions are not usually set up to be real estate management companies, and would rather not have rental income, when they could sell the property and get it off of their books.
When a property is presented as a below market opportunity, it means the lending institution needs to get it off their books, and the property may have been sitting empty for an extended period of time. In these cases, there could be considerable repairs, and other work involved, in bringing the property back up to codes. These are the properties which could be considered a good deal by investors.
HUD/VA properties are those which had the mortgage backed by a government agency, and does not mean that the actual money for the loan came through that department. The money still comes from other sources, such as lending institutions, but is simply backed by a government contract that insures the loan. These foreclosures can involve filing the correct documents to submit a bid on the property, or it might be one that is being handled through a Real Estate Broker.
A pre-foreclosure could be a good time to create a win-win situation for everyone involved. This is the point at which both lender and homeowner can agree to some terms, and the family does not have to vacate the property. It also means the property won't sit empty, and end up becoming a below market sale. There have been cases where the previous owner is able to recover and then return to making the payments.
Short Sales are simply pre-foreclosures which are under the same type of agreements, and the occupants are allowed to continue using it as a residence. In some cases, a government agency known as HAFA can become involved, and provide some financial incentives, which could help resolve the situation for the lender and the homeowner.
Foreclosures are something which simply happens in life, and are not always an intended outcome. Rules and regulations apply to the proper handling, of these circumstances, by all parties concerned. Whether it is the buyer, lender or person whose property is foreclosed on, these properties are eventually for sale.
About the Author:
Learn more about how to find foreclosures for successful investing, and for taking advantage of below market opportunities. We also provide insights on how to buy foreclosures while avoiding costly mistakes.
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