Foreclosed Properties - How Does REO (Bank Owned Properteis) Work
Foreclosure is a process in which the owner looses it's owership rights to the property and the
lender (bank) becomes absolute owner of the property. It is a termination of all rights of the homeowner covered
by a mortgage. Foreclosure is to shut out, to bar, to extinguish a mortgagor's right of redeeming a mortgaged
estate. It is a termination of all rights of the homeowner covered by a mortgage.
Currently, of the one hundred twenty or so million homes in America, more than 4% or roughly 4.8 million of them are facing foreclosure. Some of these homeowners are able to work their way out of foreclosure, however, according to MBA there were about 500,000 homes that went through foreclosure last year. Foreclosure threatens these homeowners because they are late or seriously behind on their mortgage payments.
The Foreclosure process begins when the homeowner fails to make payments of the money due on the mortgage at the appointed time. This may be due to several reasons: unemployment, divorce, medical challenges, terms of the loan, property management, and even death.
Foreclosure is applied to any method of enforcing payment of the debt secured by a mortgage, by taking and selling the estate. Borrowers and lenders now face a challenging situation. Both seek a compromise that permits a win-win outcome. The borrower to keep his home or business, the lender to keep receiving mortgage payments. Foreclosure proceedings typically start with a formal demand for payment which is usually a letter issued from the lender. This letter of notice is referred to as a Notice of Default (NOD). Depending on your state, the lender will issue this notice when the homeowner has been 3 months delinquent on the mortgage payments. Keep in mind that the notice is a threat to sell your property, terminate all your rights in that property and evict you from the premises.
For more information on selling or buying foreclosure properties in Miami, FL please contact us at 1.305.336.0457 or email us: Lana@OneSothebysRealty.com.