A foreclosure home occurs usually when homeowners face so many financial difficulties that they cannot meet their mortgage or home loan obligations when due. Sadly, the economy regularly has up and down cycles.
When times are hard, people are made redundant, lose their monthly incomes unexpectedly and there is a general domino effect that shows in an increasing number of foreclosure homes repossessed and put up for sale.
When home buyers fail to make their monthly payments several times in a row often their homes go into foreclosure. Their house is then included in a foreclosure home list, which is sometimes published on the Internet too. They are available to families looking for a foreclosed home opportunity and investors or real estate agents hunting for productive investments.
A home in foreclosure
Neither the bank nor other lenders can compel homeowners that are behind in payments to get out of their home. But what they can do is to request payment for the whole amount of the mortgage plus any due interest.
In this case, when home buyers are unable to make the payment for all defaulted mortgage bills and cannot pay the whole sum of the mortgage either, the bank will obtain a court order to evict the homeowner.
Every US state, or European country for that matter, has different foreclosure home rules. Also, the length of time until homeowners must move out of their homes depends on the type of mortgage: whether your house was financed with the help of a standard mortgage loan or the mortgage is secured with a deed of trust.
If you have a regular mortgage you may not have to leave your home until about a year after your house is included first on a foreclosure home listing. But if you financed your home with a deed of trust you might have to leave it within only three or four months.
The seller, who is the person in the foreclosure home, has the legal right to cure the defaulted loan, that is, pay off the amounts that are past due including all interest, and the foreclosure fees in full also.
Buying a foreclosed home through a foreclosed home listing
There are interested people who are convinced that purchasing a house or property from foreclosure home listings is extremely simple. But we advise private people against buying foreclosed homes completely on their own. It is more sensible to contract the services of a lawyer, particularly if he/she has experience in foreclosure home properties.
If you want to buy a house from a foreclosed home listing you could start by writing down an offer and sending it to the lending society or bank. If the lender society has interest in your proposal, they will then send you back a letter of commitment.
A home in pre foreclosure
A very good alternative is to convince the seller to sell you his/her property before the foreclosure process cannot be reverted any more. Sometimes when purchasing a home in pre foreclosure you can acquire it for an amount of money that is inferior to the balance that is owed.
From the buyer standpoint a foreclosure home can be a very sound investment, not so for the seller. The seller must be out of the home at the latest by the deadline that is specified in the foreclosure agreement.
If the house is not bought, the seller has to leave the house when the lender institution repossesses the foreclosed home or property formally. When the foreclosure home is sold in the early stages of the pre foreclosure, the seller is usually able to maintain a fairly adequate credit rating.
As soon as the house is in a foreclosure home phase, it is included in a foreclosed home listing in the County Clerk’s office. Anyone who would like to purchase this property can then easily discover when it will be sold in an auction.
At the post foreclosure level, the buyer of the foreclosure home, or the real estate department of the lending society for that matter, becomes the new owner of the property.