What is a lender?
A lender is the institution that lends you money. In most cases its a bank or building society?
What is a bank foreclosure?
When a property owner is unable to make payment on his or her loan, the bank or lender can seize the property as stipulated in the terms of the contracted loan. When the property is seized the bank/lender will sell the property at a price lower than the market value or the balance of the loan.
What is a "REO"?
A "REO" is "Real Esate Owned" by the lender. REO is usually a property that was not sold during the foreclosure and was taken back by the lender. Most lenders are not in the business of selling properties and are willing to sell the property quickly below market value to interested investors or buyers.
How does a lender foreclose on a property owner?
A lender will foreclose a property according to the state laws where the property is located. In each and every sate there is a "non-judicial" or "judicial" foreclosure procedure that must be followed. A state that tends to use mortgages for property ownership documentation usually follows the judicial procedure, which requires a court case before the lender can foreclose. A state that use deeds of trust usually follows the non-judicial procedure, which does not require a court case. A non-judicial foreclosure can take as little as 30 days to complete. A judicial foreclosure can take much more than 30 days to complete because of the need for a court hearing.
I am interested in purchasing foreclosures for investment reasons. I have been warned of 2nd mortgages being what is foreclosed, not the original. What do I need to do to know the difference?
First of all don't ever buy anything until you get a preliminary title report or Lien and Encumbrance report showing who all has a claim on the property. This way you will know exactly who is expecting to be paid off before you can own the property.
When does a foreclosure process legally commence?
Is there a difference between REO and bank Foreclosures?
What are some examples of the extra costs I should consider when estimating the ROI of a possible foreclosure property purchase?