Geting Answers To Your Questions About Mortgages and Foreclosure

Some basic foreclosure questions that you will want resolved before you purchase a foreclosed home are listed here.

Questions and Answers

1. What is a foreclosure? A foreclosure is a bank taking possession of a property due to delinquent mortgage payments. There could be many reasons for this such as the homeowner could have lost his or her job, or a medical emergency may have claimed funds from the homeowner. The loan could possibly have been made for a larger amount than was needed at the time and the homeowner can no longer afford the monthly payments.

2. What is a pre-foreclosure? A pre-foreclosure process is perhaps the most critical time for a foreclosure property. It is the time before it actually goes into full foreclosure, when the homeowner has 2-3 months to reinstate the property in good standing. This is one of the best times for negotiating a price that will be favorable to you in the outcome.

3. What is a short sale? A short sale is an alternative to a full foreclosure or bankruptcy. A short sale means the lender may accept less than full payment of the amount due.

4. Where can I find a listing of foreclosed properties? This is one of the most asked foreclosure questions. The internet has many companies who provide this service for a membership fee. You can also locate records at the County Clerk’s office, through public notices in local newspapers, real estate agents, bank offices, and title companies.

5. What is a Sheriff’s sale? A Sheriff’s sale is what they call the auction process when a property is opened for public bidding.

6. What is a foreclosure property auction? A foreclosure property auction is the court’s decision that the property be sold at public auction to see if someone other than the creditor (bank/lender) will bid enough to pay off all the related debt.

7. How can you pay for a property at a foreclosure auction? You need to have financing in place at an auction. You will need either cash, a cashier’s check, or paperwork showing you have the loan amount available to make the purchase. Ordinarily, the sale transaction must be completed within an hour of the winning bid; other times you will have through the end of that business day to complete the sale transaction.

8. Can the previous owner re-claim the property at any point? Before the foreclosure sale is finalized, the homeowner can re-claim the property if the final judgment amount of back taxes due and any penalties involved, which are decided by the court, is paid, as well as the court costs and attorney’s fees.

9. Is now the right time to buy a foreclosed property? Now is exactly the right time to purchase a foreclosed property. An abundance of foreclosed homes are in the system and they need to be put back in the hands of homeowners. The U.S. Senate is even considering a bill to give a $7,000 credit to those who purchase a foreclosed property because they are so abundant.

10. How long does a foreclosure take? A foreclosure process from beginning to end can take quite a while, from the time of the first missed mortgage payment until no other answer or solution can be found for the homeowner. Typically, lenders might start the foreclosure process on a home after the first three to six months of missed mortgage payments. Banks will send several notices to the homeowner of a pending foreclosure before the process actually begins. The legal procedure from there plays out at different time periods according to the laws of each state. However, with so many foreclosed properties on the market, banks are starting to turn them around sooner to get them off their books.

These ten foreclosure questions should help you make a decision about which property may be right for you to purchase. Using knowledge gathered and your best judgment, you will be able to find a foreclosure property that will be a good investment for you.