Foreclosures

Foreclosures are up 100% according to the news - true statement. However, they are still a small portion of the total home inventory. Now, they are a mere 2% instead of the 1% of 2006 levels.

If you are facing foreclosure, there are several numbers you can call for assistance. The first step should be to talk with your lender about a reduction in your interest rate, temporary forebearance of payments, a deed-in-lieu of foreclosure or short sale and you may have other options as well.

If you are interested in purchasing a foreclosed property, realize it will likely be a longer process than a typical home purchase and may have a few more speed bumps.

Foreclosure normally starts with a notice of foreclosure six weeks or so before what is called a Sheriff's Sale. After the home is sold at the Sheriff's Sale, the home goes into a redemption period where the borrower has up to 6 months or infrequently 12 months to make good and bring their mortgage up-to-date.
After the redemption period, the winner of the Sheriff's Sale, normally the lender or primary mortgage holder, takes the home into it's REO portfolio. It then goes up for sale by the bank as a foreclosure.

If you are interested in buying a foreclosure, realize that there are no warranties, possibly no appliances and since the bank may be slow to respond, I recommend writing a time limit for response into the purchase agreement.