What are types of Foreclosures?
There are basically three stages to the foreclosure process. At each stage, the real estate is thought of as a distinct type of property that a new purchaser can acquire:
- "Pre-Foreclosures" are still owned by the borrowers who are in default on one or more mortgage loan payments. We list thousands of properties that are in this early stage.
- "Auction" properties have been posted for public sale and may be bought at the time of the foreclosure auction by arranging to pay the arrears plus other costs at the same time the lender legally takes ownership of the collateral.
- Bank Foreclosures or "REO" is the term for "real estate owned" by the bank, savings and loan, or other lending entity after the foreclosure sale (or "auction") is concluded with no other purchaser buying the real estate.
To summarize, a Pre-Foreclosure occurs when the lender initiates foreclosure proceedings as the result of a default. If the borrower cannot cure the default by paying the arrears, and does not sell the property, it is sold at a public foreclosure auction. If no one buys the property at the auction, it becomes REO and the lender is now the seller.
You can see how at each stage, the owner is a highly motivated seller. Watching the progression of properties through one type to the next will allow you to understand when is the optimum time for you to seize the opportunity to benefit by helping others to solve the problems that have arisen from the borrowers' difficult circumstances. Read more inside our Members Section
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