People always come to me with their questions about the foreclosure process in Central Florida.  Below are most of the questions first time investor buyers ask me regarding bank owned homes.  Feel free to contact me if there is a question I haven't answered below at 321.948.9486 or http://www.cflagent.com/ .

What is a foreclosed home?

If a homeowner with a mortgage on their property fails to make payments on that loan, then the lender will file a law suite to take back the property for non-payment of the loan. This action is called foreclosure.

How long does this process take?

Generally, the homeowner's bank, mortgage company or lender does not file this law suite until the homeowner, the mortgagor, is three to four months behind in payments. Until that time, and even after the law suite is filed, the lender is doing their best to get the defaulted homeowner to make good on the loan. From the first filing, until the final judgment when the court orders the home to be auctioned on the courthouse steps typically takes just a few months. However, it is not unusual for complications such as bankruptcy or a death of one of the defaulted homeowners to drag this process out even longer. This is why it can sometimes be a year or more from the time you noticed a home abandoned until a Realty sign is posted on the property.

What is the auction, can I go?

Once the foreclosure court issues a final judgment in favor of the bank or mortgage company, the home is to be auctioned on the courthouse steps to satisfy that judgment. All monies received at the auction are applied and paid to the first mortgage, then any remaining monies are paid to the second mortgage or any other parties with liens on the property. Finally, if there is still any money left it would go to the homeowner that has just been foreclosed.

This auction is public and held on the courthouse steps by the clerk of the court. You can bid on the property.

What generally happens on residential property is the bank holding the first mortgage will lead the bidding. They have to bid to protect their investment; otherwise you or I could purchase the home for next to nothing. For example, Mortgage Company "A" is holding a $100,000 mortgage they have just foreclosed. They will bid the $80,000 to $100,000 owed to recapture as much of their investment as possible.

If no one bids against the mortgage company, many times they will bid as little as possible to avoid paying Florida Documentary Stamps on the Deed, or known as a deed transfer tax in other parts of the country.

How long do I have to pay for the property if I buy at the Courthouse?

Courthouse bidders are required to place a non-refundable cash deposit of 10 percent of the purchase price immediately upon being the successful bidder for the property. These funds are paid to the Clerk of the Court. It depends on the county, but some counties give seven calendar days to pay the full balance of the property. Then, some counties require the balance to be paid by the end of the business day or the 10% is lost.

That is all for now.  I will post Part 2 in a few hours when I get some energy to type.