While federal relief is on its way, a large number of bank foreclosures in Boston are already for sale. More houses will soon be foreclosed upon, while many others are at risk of facing bank foreclosures. With some relief expected, increasing numbers of people are looking at buying bank foreclosed homes.
A lender/bank would foreclose on a house if the home owner is unable to make the mortgage payments on time. The home owner is first given time to try and take care of the default. The home owner, during this period, can choose to sell the home in order to take care of the default. After a home is foreclosed upon, it is first put up for sale at an auction, and if it does not manage to sell at the auction, it is then transferred to the lender.
A home owner would want to sell the home during pre foreclosure, because by doing this, the lender/bank can be paid back. If the lender is paid back during the pre foreclosure stage, foreclosure proceedings come to a halt. Many times, home owners end up accepting rather low offers for their homes, only because time is not on their side and they cannot wait for better offers to come by.
A home is put up for sale through a public auction after foreclosure. While auctions are know to produce some very good results for home buyers, thorough understanding of the process is required if you do wish to get yourself a good deal. This stage of buying bank foreclosure homes should ideally be left for the experienced home buyers.
After the home does not sell at the auction, its title is transferred to the lender who holds the mortgage on the home. Lenders are usually in a hurry to sell foreclosed homes because as long as a foreclosed property is with a lender, the lender has to incur regular costs for the up keep of the foreclosed property. Also, lenders are known to take care of the past arrears that might be linked to a foreclosed home. These could be secondary liens or unpaid taxes. Banks are known to offer substantial discounts while selling foreclosed homes.
Finding bank foreclosures is not hard. You can approach banks directly and they would give you lists of foreclosed homes they have on their inventory. They could also give you details of upcoming foreclosure auctions, and some banks even give lists of home owners in pre foreclosure. The internet is also a good source for finding bank foreclosure homes.
While buying homes during all phases of bank foreclosures are known to offer some good deals, you must make sure you have the property inspected (or inspect it yourself). You would not want a good deal turning bad later on.
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Written by Alex Rolim.
