Mostly Foreclosures Articles

Distressed Properties are any houses or properties that are in the foreclosure process, including from homes that are in pre foreclosure to houses that are going to be sold at auction to real estate owned properties. Most people usually need more information about the different stages of the foreclosure process.

Pre foreclosure is the first stage of distressed properties. At this stage, the homeowner is still in possession of the home and still owns it; however, they have been notified by their mortgage lender that their mortgage is in default. There are many reasons that homeowners fall behind in their mortgage payments. This stage is the time when investors can purchase the home directly from the homeowner. This can potentially be a good situation for both the homeowner and the investor, because the homeowner can sell their home and not lose it to foreclosure, and the investor can purchase a home for less than other homes on the market.

The foreclosed property being sold at auction is the second stage of foreclosure. The property was foreclosed upon by the lender, either in a judicial or nonjudicial action. The distressed properties are then sold at a real estate auction, which can be held in a variety of places, including in front of the actual property or the county courthouse. To purchase foreclosures at auction, the interested buyer must have the money up front or proof of financing. During the auction stage of the foreclosure process, distressed properties can also be bought at excellent prices at this stage are generally sold for 10-50% off the market value.

The third stage occurs when distressed properties did not sell at auction. They are repossessed by the bank or the lender that financed the loan on the home. At this stage, they are called bank owned properties or real estate owned properties. Most banks sell their them through a real estate agency. Many times, these properties sell very quickly, especially if they are nice homes that don’t need a lot of work. Distressed properties generally do not sell for as much of a discount, because the bank needs to recoup their losses on the property. Because these properties can be unoccupied for various amounts of time, it is always smart for the buyer or investor to get an inspection on the property.

For homes that the mortgage loan was insured by a government agency, like VA or HUD, the government repossesses them when the foreclosure process in complete. Then the government agency offers them to anyone through a bidding process.

Distressed properties are a term for every property that is in one of the stages of the foreclosure process. The best location for extensive lists of distressed properties is at MostlyForeclosures, which is the leading in foreclosure listings service.

This entry was posted on Tuesday, August 29th, 2006 at 9:43 am and is filed under Distressed Properties. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.