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What are Foreclosure Homes?
What are Foreclosure Homes?
Foreclosure homes...we have heard this term a lot in recent years thanks to the slump in the real estate market and then downward spiral of the economy. But do you really know what it means for a house to have been put into foreclosure?
A foreclosure is the process at which a bank (or other creditor) has taken back the property because of a default (failure to comply with lending obligations and terms).
When a person purchase a home using a mortgage to pay (anything other then cash sale), the debtor (purchaser) repays the bank (according to lending terms) for the property that was purchased. Most banks/creditors will require a security interest in the property. This "security interest" allows the bank to take back the property if the debtor defaults on the loan.
If the debtor does happen to fall behind on payments (for whatever reason) and defaults on the loan, then the bank or creditor will send notification to the debtor and will be give a certain time period to
- make the loan current (taxes, interest, penelties, etc)
- arrange an agreement with the creditor
- declare bankruptcy
If the default is not cured, then the property will be seized and auctioned (each state's foreclosure procedures are different). The proceeds will first go toward the primary lien holder and trickle down to other remaining balances. If there is anything remaining from the sale after all the payments, the balance will go to the debtor.
Remember, that each state has its own set of laws in regards to the foreclosure process. If you are thinking about purchasing a foreclosure home, make sure to research or contact an attorney about the foreclosure process.
Foreclosures can be great investment properties if done correctly. Make sure to consult the proper professionals to help with this process.
Search for foreclosure homes in Greensboro, NC
THE WARMATH REALTY GROUP
Bill and Katie Warmath
Keller Williams Realty
(336)317.6556
Foreclosure homes...we have heard this term a lot in recent years thanks to the slump in the real estate market and then downward spiral of the economy. But do you really know what it means for a house to have been put into foreclosure?
A foreclosure is the process at which a bank (or other creditor) has taken back the property because of a default (failure to comply with lending obligations and terms).
When a person purchase a home using a mortgage to pay (anything other then cash sale), the debtor (purchaser) repays the bank (according to lending terms) for the property that was purchased. Most banks/creditors will require a security interest in the property. This "security interest" allows the bank to take back the property if the debtor defaults on the loan.
If the debtor does happen to fall behind on payments (for whatever reason) and defaults on the loan, then the bank or creditor will send notification to the debtor and will be give a certain time period to
- make the loan current (taxes, interest, penelties, etc)
- arrange an agreement with the creditor
- declare bankruptcy
If the default is not cured, then the property will be seized and auctioned (each state's foreclosure procedures are different). The proceeds will first go toward the primary lien holder and trickle down to other remaining balances. If there is anything remaining from the sale after all the payments, the balance will go to the debtor.
Remember, that each state has its own set of laws in regards to the foreclosure process. If you are thinking about purchasing a foreclosure home, make sure to research or contact an attorney about the foreclosure process.
Foreclosures can be great investment properties if done correctly. Make sure to consult the proper professionals to help with this process.
Search for foreclosure homes in Greensboro, NC
THE WARMATH REALTY GROUP
Bill and Katie Warmath
Keller Williams Realty
(336)317.6556
