With foreclosures on the rise, and home prices declining there are more and more people looking for explanations, and information on what is going on in today’s market.  I talk with clients and customers on a daily basis of course, and it came to my attention that many people don’t quite understand foreclosures or short sales as much as they’d like to, they just know it’s a bad thing for the homeowner, their neighbors, and the country.  Today, I’ll explain the basics of a foreclosure as it happens here in Arizona.

 

What is a foreclosure? 

 

There are a number of events and circumstances that can lead up to the initiating of foreclosure proceedings.  Whatever the circumstances may be, the owner of the home has fallen behind on mortgage payments, and hasn’t had the ability to catch up.  A typical scenario might be this:  an owner of a home has fallen 3 months behind in mortgage payments, and the Trustee (an agent of the bank holding the note on the property) sends a Notice of Trustee’s Sale to the owner (and public), meaning the Trustee will sell the property to the highest bidder at auction on a specified date.  This sets the foreclosure wheels in motion.  From the date of the Notice of Trustee’s Sale to the day of auction is a minimum of 3 months.  In the current real estate environment, it’s not uncommon to see sale dates beyond 3 months, by way of a granted extension.  At the day of auction, if the past due payments (and added fees), have not been remedied by the owner of the home, the Trustee will auction off the home to the highest bidder.  Because of the current market conditions, it’s very common that there will be no highest bidder (no one will want the property at the current bid price, which can be the original loan amount), and the bank will wind up taking the home.  At this point the home is a foreclosure, the bank owns the property, and it goes on the books as REO (real estate owned).  This is a very brief, nutshell explanation of a foreclosure.  Each property is unique, and varying actions may be taken (by the lender, or borrower), depending on the particulars of the situation.

 

As you read have been reading you no doubt have other questions regarding foreclosures or the pre-foreclosure process.  Here are a few of the most common questions I am asked regarding foreclosures:

 

“I’m a homeowner facing foreclosure what should I do?”

  

 “What are the effects of foreclosed homes on property values in my area?”

 “I am interested in purchasing a foreclosure, how do I get started?”

 

 

I will cover these topics and others in future postings.  If you are a homeowner facing foreclosure take immediate action!  Time is of the essence, and now is the opportunity to solve your situation.  Please don’t hesitate to contact me at 480-529-6329, or email me: Nathan@ezlistaz.com.

 

Have a specific question?  Post a comment!