Foreclosures
What Is Foreclosure? A series of events that begins when a homeowner defaults -- or stops making mortgage payments -- usually because of a life crisis which impacted their income (examples: death, disability, divorce, etc.) or because their loan payments increased beyond their ability to pay them (example: when an adjustable rate mortgage begins to adjust). The series of events ends when the mortgage holder sells the home at auction, or takes the home back from the owner.
HOMEOWNERS:Foreclosure can start when you miss your first payment (ie 30 days behind). Then, the foreclosure process is represented by a series of notices you get in the mail and even posted on your front door over a 4-6 month period of time telling you that you have two options: (1) either bring your past due mortgage current or come to some compromise with the lender, or (2) your home will be sold and you will have to move out. At the end of these notices is usually an auction, where the lender sells your home on the steps of the county courthouse or simply takes ownership of it, and you move out. Your options, rights and responsibilities change depending on what phase or stage of the foreclosure preceding your home is in at any given moment.
HOMEBUYERS:For prospective buyers, foreclosures can result in significant savings, since the lenders that take back the properties typically aren't in the business of being landlords and will do whatever they can to sell them. These properties are usually purchased As/Is. Because the bank has not owned the property in most cases they will not provide you a copy of Sellers Disclosures. It is prudent that a buyer hire a licensed home inspector to thoroughly inspect the property. (Please note: Some banks may not make an offer contingent on a home inspection, so it is important to read any bank addendums and/or contracts thoroughly). In most cases however, the bank will allow the offer to be contingent on a home inspection. Typically you must complete these inspections within 7 to 10 days after acceptance of the offer. Click on the Buying Foreclosure button for some more information.
