Who do you contact about the property in foreclosure. Well, I have your answer. What is a Mortgage Foreclosure? When most people purchase real property, they do not have enough money to simply purchase the property outright. In order to make the purchase, they are required to borrow money from a lender. In exchange for lending the money, the lender will hold a lien against the property. If the borrower does not make the required payments, then the loan goes into default and the lender can exercise the lien against the property, in order to take legal possession of the property for the purpose of selling the property to pay off the borrower’s loan. This process is named mortgage foreclosure Here is the foreclosure bargain-finding procedure: Start with a reliable local information source, such as a legal newspaper or privately-published daily or weekly newsletter. To find these sources, ask local real estate attorneys, realty brokers and title insurance officers. The county recorder of deeds is another good source. Most large cities have one or more publications of foreclosure and distress property notices. But in smaller communities you may have to go to the county recorder’s office to do your own research. Incidentally, most of these distress properties are not listed for sale so don’t expect much help from real estate agents. Develop a tracking system to keep records of the bargain properties you discover. It often takes many months from the recording of the notice of default or mortgage lawsuit until a property owner decides to sell just before losing the property by foreclosure or other legal process. *********************************** Talk with the distress property owner to learn about the residence to see if (a) you are interested in acquiring it and (b) if the owner will be cooperative. Unfortunately, many distress property owners bury their heads in the sand and do nothing until they lose their properties. ************************************* Since foreclosures comprise the majority of wholesale real estate buying opportunities, it pays to understand how foreclosures work. Exact procedures vary by state and locality, so don’t hesitate to buy an hour of a local real estate attorney’s time to ask your detailed questions. Most distress properties become available due to divorce, unemployment, death and illness. Since you didn’t cause the owner’s problem, don’t feel bad about acquiring the home or other property at a wholesale price. Someone will benefit. It might as well be you. Here are the major foreclosure acquisition opportunities: Before the foreclosure sale The first wholesale buying opportunity occurs before the foreclosure auction. Many homeowners who are unable to maintain their mortgage payments will sell before the lender’s foreclosure sale. The key question to ask is, “How much do you want for your equity?” It is often possible to buy a residence for $1,000 to $20,000 cash to give the owner any “walking money. ” However, before paying the seller any money be sure to have the title checked to be certain you know what existing encumbrances you will be assuming. Often you will discover the owner has mortgaged the house to the hilt and has zero equity. At the foreclosure auction If you can’t buy the distress property before the lender’s foreclosure sale, the next bargain opportunity occurs at the foreclosure auction. This sale wipes out most junior liens, such as junior mortgages and judgment liens. However, unpaid property taxes are not eliminated. Another advantage is that you don’t need to deal with an emotional seller who is losing his or her property. But a disadvantage, in any states, is the owner retains a right of redemption. If there is an IRS tax lien on the property, the IRS has a 120-day redemption period. However, few redemptions occur. After the foreclosure sale from the foreclosing lender If no bidders showed up at the foreclosure sale and the foreclosing lender acquired the residence, many lenders want to quickly dispose of the property at bargain prices. I’mmediately contact the lender to see if you can buy the residence at a bargain price close to the amount of the foreclosed mortgage. However, many foreclosing lenders list their foreclosed properties with local realty brokers at full retail market value. How do I Buy a Home in Foreclosure? It is important to be aware that buying property in foreclosure is a risky venture. Most foreclosed properties are sold “as is” and there can be problems not only with the structure, but there may also be liens on the property, unpaid taxes, and other problems to deal with. If you are not experienced in real estate, you should be very cautious before getting involved with purchasing foreclosed properties. That being said, buying foreclosure properties can be very rewarding and profitable if you are careful and thorough. The first step will be to familiarize yourself with the applicable laws and the process in your area. Once you understand this, you will next want to start identifying geographical areas in which you would like to purchase a property. Once you determine the areas you are interested in, you will want to begin locating properties that are in the foreclosure process. There are a number of different ways to do this, including checking the classified ads in your local newspaper. Foreclosure properties may be listed several different ways, such as under “Foreclosure Sales”, or “Sheriff’s Sales”. You can also learn about properties if the lender is giving notice to the borrower of the lender’s intention to initiate foreclosure proceedings. Other ways of learning about foreclosure properties include commercial databases, the number of which has greatly expanded in recent years. If you are using a commercial database of foreclosure properties, it is best to make sure that there are many pre-foreclosure properties listed, as these will typically be the best bargains. Interested parties may also check with the County Recorder’s Office, and it may be possible to get information from the applicable court in any areas. Another way to obtain information is through the banks or other lending institutions that hold the mortgages, or through government agencies such as the Federal Housing Administration, the Department of Housing and Urban Development (HUD), or the Veterans Administration. After you learn about the properties in foreclosure in your area, the next step is to inspect the properties you are interested in, if possible. Sometimes you will not be able to inspect the property ahead of time. You will then want to determine the value of comparable properties in the same area. This information can be obtained from local real estate agents. If you are still interested in the property at this point, the next step will be to find out who owns the property, and what liens encumber the property. Find out the balance in default to the lender, and the balance remaining on the loan that has resulted in the foreclosure proceeding. You will want to find out if back taxes are owed on the real estate. To determine this information you will want to conduct a full title search. Finally, you should make sure you are familiar with any land zoning, easement or toxic waste issues that could impact your use of the property. Also make sure there are no pest problems, other structural problems, and determine if any illegal alterations have been made to the property without the necessary permits. Once you know exactly what you are facing, how you will proceed will depend on what type of sale is taking place.
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