The process of foreclosure commences when the Notice of Default is a matter of public record. The lender will have given a period of notice to the property owner of his intent prior to filing. Most commonly mortgage payments will have fallen 2 to 3 months in arrears. Note that the NOD must be recorded in the county in which the property in question is to be found.

  • Day 1: Record Notice of Default.
  • Within 10 Days: Mail Notice of Default; publish Notice of Default when necessary.
  • Within 1 Month: Mail Notice of Default.
  • After 3 Months: Set sale date.
  • 25 Days Before Sale Date: Send notice of sale to IRS when necessary.
  • 20 Days Before Sale Date: Publish Notice of Sale; post Notice of Sale; mail Notice of Sale, including any state taxing agency.
  • Within 10 Days from Publication: Request for directions to property sent to beneficiary.
  • 14 Days Before Sale Date: Record Notice of Sale.
  • 7 Days Before Sale Date: Trustee cannot sell for 7 days after expiration of court order.
  • 5 Business Days Before Sale Date: Right of borrower to reinstate ends.
  • Sale Date: Sold at trustee’s sale.

Bank foreclosures, also known as a Bank Repos, are available at auctions at the courthouse steps. Foreclosures are sold in “as is” conditions and may contain second liens, property taxes, and HOA fees that may have to be paid off to get a clean title to the property. REOs, on the other hand, are real estate properties that have reverted back to the lender following an unsuccessful trustee sale or foreclosure auction. In most cases, REOs have clean titles and are listed by real estate agents.

A property sold as a foreclosure is usually sold in “as is” condition, meaning there may be additional costs such as second liens, eviction, repairs, and renovations. In REO properties, the bank usually has done the repairs and handled the eviction process.
After a property owner misses several mortgage payments, the owner has a pre-foreclosure grace period of a few weeks to a few months to bring the payments up to date and stop any foreclosure proceedings. If the owner does not bring the delinquent payments up to date during the pre-foreclosure period, the property will be sold at a public auction. Our team at Casas Advisors can help you in the process of buying a property at these public auctions.

You just have to be more creative with your financing. That is the great part about real estate; you can control property with very little money. One technique that works well is called “Subject To,” or taking over a property subject to existing financing. So instead of applying for a loan the conventional way where they check your credit, debt to income ratios, and so on, you can take over the monthly payments and sell the house before it goes to auction. Or you can keep it as a “rent to own” and make a monthly cash flow. It’s kind of like assuming a loan, except you are not paying points, loan fees, and so forth.

Another option is to use transactional funding. Transactional funding is used when you’ve negotiated a deal with the bank and plan on doing a back to back closing but don’t have the money or good credit to fund the deal. The money is used to fund the transaction between the seller and you and then between you and your end buyer. You’ll have to pay a few points, however you’d have to pay the same amount anyway if you were to fund it yourself… this way you’re never at risk because it’s not your money. It works very smooth.

Yes, the lenders have the option of calling the entire loan due, (“due-on-sale clause”) but rarely ever do. Banks are in the lending business and make money by lending money to you. As long as someone is making payments to them, they most likely will not call the loan due. The only time you really need to worry about lenders calling loans due, is if interest rates went up dramatically. For example, if the previous owner was locked in at 6%, and interest rates have climbed to 12%, you can bet most banks want the higher interest rate and more than likely would call the loan due just so you would have to refinance with them. So, can it happen? Yes. Will it happen? Not likely.
If you would like to know the value of a property, please contact an agent at Casas Advisors, and the agent will provide the property value free of charge to you.

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