About ForeclosureForeclosure is when a bank or lending agency repossesses a property after the owner fails to meet its obligations in repaying a loan.
Foreclosure is a serious and complex process anyone facing foreclosure or considering buying a foreclosed property should seek professional legal advice.
There are two types of foreclosure in the United States. The first is known as foreclosure by judicial sale and is handled through a court with a judicial decision made.
The second type is referred to as foreclosure by power of sale. This is done outside of the court and is often results in a quicker sale.
A number of services and websites have started to help people experiencing problems with paying back their loan. These services help people to either stall or event prevent their home from going to foreclosure.
A bank can claim the title and possession of the property. This is known as deed in lieu of foreclosure. With judicial foreclosures the property is offered to auction usually through the county sheriff or similar officer of the court. If there are no buyers in the auction the lender usually bids and receives title to the property.
With non-judicial foreclosure which is done outside of the court, a public auction is usually held to find a buyer for the property. The winning buyer receives the property free and clear of any interest of the former owner, but could be liable for unpaid taxes on the property.
If there has been a drop in property prices since the property was purchased, the mortgagor could still be liable for the remaining difference between the sale price and the loan. Depending on the state, the lender may have the ability to go after the other assets of the defaulter. The defaulter will also be liable for another loans like second mortgages that may have been taken out on the property.
Investing in foreclosure properties
Lending institutions usually only seek to recover the outstanding mortgage plus costs, so for property investors, buying properties sold through the foreclosure process can potentially be a lucrative investment, as the properties are usually sold well under market value.
Finding foreclosure properties
One of the biggest difficulties in investing in foreclosure properties is actually finding about available properties and upcoming auctions. Property investors are reluctant to share details as more potential buyers will only raise the sale price of the property.
Government Auctions.org is one of the best places to find properties. There is a small fee for accessing the database, but it represents only a tiny layout for the potential money you can make buying and selling foreclosure assets.
Foreclosure data is a free site for finding foreclosure properties across the United States. The site has listing for over 1.2 million properties.
Foreclosure for beginners
Investing in foreclosures can be a complex and sometimes risky business. It is imperative to have good legal advice. There is a large amount of industry jargon which you need to become familiar with. You may have seen advertisements for property investment seminars on late night television. These courses are extremely expensive and the information is usually geared to just making you spend more money on further courses.