What is a Foreclosure?

Foreclosure is a process through which the lender can take possession of a home. Bank foreclosures are those where the homeowner has failed to make the necessary payments or when they have defaulted on the loan. In a way, it is a termination of homeowners' rights on the property or home as covered under the mortgage. To make a foreclosure happen, a lender has to first file a public default notice, also known as the Lis Pendens or Notice of Default. There are three ways through which a foreclosure can end and they are:

  1. If the homeowner/borrower is able to reinstate the loan during the grace period as instructed by the state law/court. In this grace period or pre-foreclosure period, if the homeowner pays off the default amount then the property will not go into foreclosure.
  2. The homeowner/borrower can sell his or her property to another buyer during the pre-foreclosure period and thus pay off the loan. If he or she pays off the loan then their credit history will not show any foreclosure.
  3. The lender takes repossession of the home to re-sell it through an auction. The lender will get ownership of the property through a mutually signed agreement with the homeowner during the pre-foreclosure period. A property owned by the lender is known as bank-owned property or REO properties.
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The process of foreclosure or pre-foreclosure helps other people/third party to get a home at a bargain price. We at BankForeclosuresSale.com will help you get the foreclosure homes of your choice by identifying the right property for you. Here's a look at what all is available.

Pre-Foreclosure Property:

If you want to buy a good home then you should look out for bank foreclosures for sale. You can also check some of the best homes or property that is in the pre-foreclosure period. You will have to approach the homeowner/borrower and make the proposal of buying the property outright. If the homeowner/borrower sells you the property then they will avoid a bad mark on their credit history. At the same time, you will get the property at a good bargain price. As a buyer, you will have enough time to research and collect information the property and get a discount of anywhere between 30% to 60% below market value.

Auction:

If the homeowner is unable to pay the loan by the end of the pre-foreclosure period then the property is put up for a public auction where potential buyers can bid on it. These are known as foreclosed homes and buyers can pay in cash or by check depending on the laws of a particular auction. There are times when a buyer may not get the appropriate time to even do a background research on the property. The good part though is that a public auction eliminates the direct dealing with the borrower and offers the best bargain possible.

Bank-owned/REO:

The reason why lenders take ownership of a property is to sell it off at an auction so that they can recover their losses. Once the lender has repossessed the property, they will ideally do the repairs before putting it up for auction. It has been seen that the bargain for REO homes is lesser than a pre-foreclosure property. Bank foreclosures, REO property or VA repo homes can become a government foreclosure only if the loan was issued by a government agency like the HUD or Department of Housing and Urban Development or Department of Veteran Affairs (VA). In such a case, the HUD or the respective government agency will be responsible for selling off the property.

Things To Know Before you buy

To help you find the best property, we offer you all the relevant information regarding various foreclosed property. The information is available through our foreclosures list and includes details of over two million foreclosure properties nationwide. You can search on our foreclosure database that includes properties in pre-foreclosure as well as foreclosure.

Foreclosure Terms & Information

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