What is the most common form of foreclosure?

Foreclosure occurs when the homeowner is unable to make mortgage payments to the lender. A homeowner has a few options to avoid foreclosure. The most common are mortgage modifications and short sales.

Where does a foreclosure sale usually take place?

In the past, foreclosure sales almost always involved an auctioneer selling the property from the courthouse steps or another public area. Now, the auction can either be live (in-person) or online. Online foreclosure sales are becoming more and more common.

What happens when a foreclosure is sold for less than the amount owed?

If the property sells for less than the borrower owes the lender, the sale results in a deficiency. Then, depending on state law, the lender might be able to get a deficiency judgment against the foreclosed borrower.

What are the different types of judicial foreclosures?

It does not address suits initiated by the IRS to foreclose its lien interests. (See IRM 25.3.2, Suits by the United States) There are two types of foreclosures discussed in this IRM. State law determines the type of foreclosure a creditor must use to enforce its interest– judicial or non-judicial.

Who is entitled to extra money from a foreclosure sale?

Generally, the foreclosed borrower is entitled to the extra money; but, if there were any junior liens on the home, like a second mortgage or HELOC, or if a creditor recorded a judgment lien against the property, those parties get the first crack at the funds.

How do you find out if a house is in foreclosure?

Anyone can find out if a house is in foreclosure with a little detective work. Use the property’s address to search the county records, or purchase a list of preforeclosure properties in your neighborhood for a modest fee.

What are the risks of purchasing a foreclosure?

Understand what the problems are before you buy Problems With the Property. The most important thing to keep in mind before deciding to shop in the foreclosure market is that these properties are given up by owners who Maintenance and Condition. Vandalism and Neglect. Problems With the Purchase. The Bottom Line.

Can you inspect a foreclosure property before buying it?

Each federal agency has a different policy concerning pre-sale inspections. You cannot preview a tax-foreclosed home before you buy it. On the other hand, HUD homes often sell through approved brokers, making them available to preview before you buy. The same is true for real estate-owned homes.

What can I do about a foreclosure?

Many homeowners find alternatives to foreclosure by negotiating with lenders, often with the help of foreclosure counselors. If you’re facing foreclosure, call your lender right now to determine your options, which can include loan modification, forbearance, or a short sale.