What is foreclosure?

A foreclosure is a state when a property is being sold because the owner fails to pay the principals or interests of the property.

Stages of foreclosure

Notice of Default (NOD):

When a owner fails to pay the mortgage the lender will ask for NOD. This will in effect put the home owner in notice that there property will enter a state of foreclosure

Notice of Sale:

If the home owner doest not fix the NOD then they will the home owner will receive a notice of sale. This notice will be then attached to the property and it will go to the County record’s Office. County record office will put this foreclosed property in local news papers over a period of three weeks.

Trustee Sale:

They will happen at the local county court house at the designated time in Notice of Sale. At the trustee sale the property is sold to the highest bidder, who must pay the bid price in cash.

What is a foreclosure auction?

Once the property is in auction the lender sets the price for the property, which is also called as the opining bid

The opening bid is usually decided by the amount of the loan balance, interest accrued, and any other additional fees associated with the attorneys dealt with Trustee Sale.

When does REO come into action?

In case of where there are no bids higher than opening bids than the property is purchased by the attorney conducting the sale, for the lender. If this case occurs then the property becomes an REO or Real Estate Owned. In most of the cases these occurs because the property is not worth the price of the opening bids or the total amount owed to a bank or lender.

When you purchase a property at one of these sales all liens other than the property taxes are wiped out for the customer. When a customer purchases a REO a.k.a.Bank Owned property , you will typically receive the property with a clean title.