What is Foreclosure?

A Foreclosure is a State when a Property is being sold because the Owner fails to pay the Principal or Interests of the Property.

Stages of Foreclosure

Notice of Default (NOD):

When an Owner fails to pay the Mortgage, the Lender will ask for NOD. This will in effect put the Homeowner in notice that their Property will enter a State of Foreclosure.

Notice of Sale:

If the Homeowner does not fix the NOD then the Homeowner will receive a Notice of Sale. This Notice will be then attached to the Property and it will go to the County’s Record Office. The County Record Office will then put this Foreclosed Property in a Local Newspaper for a period of three weeks.

Trustee Sale:

This will happen at the Local County Courthouse at the designated time given in the Notice of Sale. In 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 Opening Bid.

The Opening Bid is usually decided by the Amount of Loan Balance, Interest Accrued and any other additional Fees laid by the Attorneys dealt with Trustee Sale.

When does the REO come into Action?

In case where there are no Bids higher than the Opening Bid, the property is purchased by the Attorney conducting the sale for the Lender. In this case, the property becomes a REO (Real Estate Owned). In most cases this occurs because the Property is not worth the price of the Opening Bid or the total amount owned 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 or Bank Owned Property you will typically receive the Property with a Clean Title.