When a homeowner stops making payments on their home loan, the lender will make several inquiries to see why and try to remedy the situation. However, if the homeowner is still not making their monthly payments the lender will begin foreclosure proceedings. Shortly thereafter the owners will be instructed by the sheriff’s department to leave the property, and depending on what ‘device’ is utilized to foreclose, the lender either sells it on the open market or auctions it off on the courthouse steps. The lender may still seek recovery of the balance of the loan from the now former owner. The former owner’s credit record will be affected adversely. I have helped many people, both those seeking a home and investors, purchase foreclosed, REO and bank owned properties.
Why would a foreclosed property be of interest to an investor? Such properties are frequently priced well below what their market value should be. In other words, such a purchase represents a potentially very good deal for the purchaser/investor.
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