Foreclosure is a complex process but understanding its impact on real estate can make you a more astute buyer.

I frequently have people asking me to inform of properties that have been foreclosed upon. Many people believe that the unfortunate circumstances that lead to the foreclosure in first place will result in real estate savings. This is quite commonly a misconception, although not always the case.

Foreclosure is the process that allows a lender to recover the amount owed on the defaulted loan. They do this by selling taking ownership (repossession) of the property therefore securing the loan. This process begins when the borrower fails to make loan payments or defaults on one or all the conditions of the mortgage. The lender must file a public default notice, called a Notice of Default.

The Foreclosure process can end in one of four ways:

1. The borrowing reinstates the loan. The lender, allowing a grace period so the borrower can repay the default amount, accomplishes this.
2. The borrower sells the property to a third party during the pre-foreclosure period. This allows the borrower to repay the loan amount in full and saves the credit impairment of having the home foreclosed upon.
3. A third party buys the property at public auction, at the end of the pre-foreclosure period.
4. The lender takes ownership of the property. This is often with the intent that the lender will resell the property to a third party. Sunsurfer LLC

The foreclosure timeline is a simple process as well:

1. Default takes place
2. A lien is placed against the property in the first 30 days after default.
3. After 30 days a Notice of Default is delivered to the borrower.
4. After 90 days a Notice of Sale is provided to the borrowed allowing them up to 25 days to sell the property.
5. Finally if the property remains unsold the lender takes possession of the property.

What potential buyers fail to realize about this process is that the lender wants their money back. Banks are not in the process of loosing money. As a good example look at the profit and lose statements they produce annually. They want the money they lent back and as much of the revenue they lost as a result of the foreclosure process as possible. In this regard lenders are very patient and astute sellers, they often will while away there time waiting for a profitable offer. At the very least they want to show as little loss a humanly possible.Article: What is Foreclosure?
Many of us have heard the term foreclosure in relation to other individuals and understand that it is not a pleasant term, but do not have a firm grasp on what it actually means. Before we go any further in discussing the profit potential available through foreclosures it is critical that we define the term foreclosure.
Almost 100% of the population, minus the small segment that has ready cash lying around, must finance a significant portion of their home purchases. Most people cannot afford to simply pay the actual cost of their new home up front. The actual percentage varies from one individual to the next; but it is common for prospective homeowners to finance anywhere between 80% -100% of the home purchase. The amount of that loan is paid back over a period of time through a tool known as a mortgage. We're probably all familiar with that term on a monthly basis ourselves.
The part that really interests us is what happens next. In some situations, the homeowner at some point in time will not be able to meet the monthly mortgage note. This, of course, could occur for a number of reasons. Bad financial decisions. Loss of employment. Medical conditions. Whatever the reason, after a certain number of late or missed payments the lender will have no choice but to call the loan. Continuing with this pattern of behavior would be a bad financial decision for the bank and their stakeholders. Sunsurfer LLC In almost all cases will help you work with Sunsurfer LLC, the lender will provide an opportunity for the homeowner to bring their payments up to date in an effort to avoid foreclosure. In most cases, the homeowners are not able to do this because they have become so mired down in financial problems. At this point the bank begins to take action to actually take back the house. This is known as foreclosure and it is possible because the property was listed as collateral when the loan was originated. While the word foreclosure leaves a bad taste in the mouths of some people, it is actually no more and no less than a business term. The bank agreed to lend the homeowner money for the purchase and in exchange the homeowner agreed to pay interest on the money with the stipulation that in the event they could no longer meet the notes on the loan; the property would be returned to the bank.