The financial profile of borrowers who experience Foreclosure is changing. While Foreclosure rates are historically higher for sub-prime mortgages than for traditional mortgage products, rates of mortgage default are increasing among the most credit worthy individuals.
When a bank take possession of a property, it is referred to as an REO or Real Estate Owned property. You may have seen that term.
Considering purchasing a REO (Bank Owned)/Foreclosure property?...Keep the following considerations in mind:
1) The opportunity for the potential buyer to conduct property inspections can be negligible or extremely limited. Potential buyers usually have limited or no access to properties offered at a Foreclosure sale becasue they are often still occupied by the owners or tenants.
2) After completion of the sale and court approvals, if required, it may be necessary for the Buyer to initiate legal action to evict tenants.
3) Buyer is responsible for paying any ouutstanding liens. Some preliminary investigating can reveal if any additional liens exist.
4) In some cases, the Buyer may not receive clear title.
5) A "Redemption Period" may exist. A redemption period allows the originally foreclosed borrower to recover the property after the foreclosure sale. If the borrower makes good on past due payments within a specified period of time defined by the Redemption Period, he/she can recover the property. The Redemption Period may have been signed away by the original borrower in the Deed of Trust at the time he/she purchased the property. Consult a reputable real estate attorney for advice.
There are many items to consider when purchasing REO/Foreclosure properties. Fill out the "CONTACT US" form for additional information and CLICK HERE to search area REO/Foreclosure properties in Middle Tennessee.