Foreclosures happen for more reasons than just a bad economy, and do not particularly reflect on the integrity of the previous owner. They may have experienced a loss of a job which wiped out their finances, and were no longer able to pay the mortgage. According to the Mortgage Bankers Association, one child in every classroom in America is at risk of losing his/her home because their parents are unable to pay their mortgage. Lets look further into what's happens with foreclosures.
An REO (Real Estate Owned) is owned by the lending company who foreclosed on the lien, and efforts to sell it at public auction have failed. In most cases, the opening bid is established by the amount of the payoff of the loan and some other factors, but if no one makes an offer on that amount, the property is removed from the auction block and becomes an REO.
Once a property becomes Bank Own, they are turned over to an asset management group to market and sell. Usually an NRBA (National REO Brokers Association) Real Estate Broker is selected to list the property, but some lenders believe they get better results selling the properties from their internal departments. Banks are not in the business of managing rental properties, so they sell them to clear their inventory.
When a bank has a property that has been on its books for a long period of time, they will sometimes offer it for sale as a below market opportunity. After so much time, lending institutions need to get properties off their records, and free up some revenue. These might be properties which have sat empty and fallen into bad repair, or begun to deteriorate from the elements.
HUD/VA properties are not owned by the government, nor did the government put up the money to purchase the properties. These agencies only guaranteed the loan, in the event the borrower failed to be able to continue making payments. Once that happens, the government ends up with possession of the real estate, and they are listed on their site as foreclosures.
Pre-foreclosures are situations which can be created when, and if, all parties involved reach an agreement. This possibility offers some benefits to everyone involved because the family does not have to immediately move, and the lender does not have a property that is sitting empty and exposed to vandalism. The lender could actually lose more money if the property is empty and suffers expensive damages, even if caused by deterioration.
Short Sale is another name for pre-foreclosures, and the lender has agreed to let the family continue living in the house. There are some possible financial incentives involved in these through an agency program known as HAFA. But, the property is allowed to be shown by Realtors, while the family is still living there.
Foreclosures doesn't have to be a bad word. There are plenty of properties that end up in foreclosure that was not a result of trashy people failing to make the mortgage payment. Often these properties can be purchased at reduced prices, and there are some possibilities of assistance to the homeowner, under certain financial conditions.
An REO (Real Estate Owned) is owned by the lending company who foreclosed on the lien, and efforts to sell it at public auction have failed. In most cases, the opening bid is established by the amount of the payoff of the loan and some other factors, but if no one makes an offer on that amount, the property is removed from the auction block and becomes an REO.
Once a property becomes Bank Own, they are turned over to an asset management group to market and sell. Usually an NRBA (National REO Brokers Association) Real Estate Broker is selected to list the property, but some lenders believe they get better results selling the properties from their internal departments. Banks are not in the business of managing rental properties, so they sell them to clear their inventory.
When a bank has a property that has been on its books for a long period of time, they will sometimes offer it for sale as a below market opportunity. After so much time, lending institutions need to get properties off their records, and free up some revenue. These might be properties which have sat empty and fallen into bad repair, or begun to deteriorate from the elements.
HUD/VA properties are not owned by the government, nor did the government put up the money to purchase the properties. These agencies only guaranteed the loan, in the event the borrower failed to be able to continue making payments. Once that happens, the government ends up with possession of the real estate, and they are listed on their site as foreclosures.
Pre-foreclosures are situations which can be created when, and if, all parties involved reach an agreement. This possibility offers some benefits to everyone involved because the family does not have to immediately move, and the lender does not have a property that is sitting empty and exposed to vandalism. The lender could actually lose more money if the property is empty and suffers expensive damages, even if caused by deterioration.
Short Sale is another name for pre-foreclosures, and the lender has agreed to let the family continue living in the house. There are some possible financial incentives involved in these through an agency program known as HAFA. But, the property is allowed to be shown by Realtors, while the family is still living there.
Foreclosures doesn't have to be a bad word. There are plenty of properties that end up in foreclosure that was not a result of trashy people failing to make the mortgage payment. Often these properties can be purchased at reduced prices, and there are some possibilities of assistance to the homeowner, under certain financial conditions.
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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