3 TYPES OF FORECLOSURES
SHORT PAYS OR PRE-FORECLOSURES
After about three to six months of missed payments, the lender orders a trustee to record a Notice of Default (NOD) at the County Recorder's Office as required by real estate foreclosure laws. This puts the borrower on notice that he or she is facing the real estate foreclosure process.
TRUSTEE FORECLOSURE ACTION (TRUSTEE SALE)
If the default isn't corrected (the loan must be brought current) within three months, a real estate foreclosures for sale date is established.
The homeowner will receive a Notice of Sale, and this notice will also be posted on the property. In addition, the Notice of Sale is recorded at the County Recorder's Office as a real estate foreclosure in the county where the property is located.
The foreclosure Trustee Sale typically occurs on the steps of the county courthouse in which the property is located. The time and location of this sale are designated in the Notice of Sale and listed in real estate property foreclosures. At the Trustee Sale, the property is auctioned in public to the highest bidder, who must pay the high bid price in cash, typically with a deposit up front and the remainder within 24 hours. The winner of the auction will then receive the trustee's deed to the real estate and foreclosure property.
Foreclosure Auction: At auction, an opening bid on real estate property foreclosures is set by the foreclosing lender. This opening bid is usually equal to the outstanding loan balance, interest accrued, and any additional fees and attorney fees associated with the Trustee Sale. If there are no bids higher than the opening bid, the distressed property will be purchased by the attorney conducting the sale, for the lender.
BANK OWNED (REO'S)
If the opening bid is not met, the property is deemed a REO or Real Estate Owned property. This typically occurs because many of the foreclosed properties up for sale at foreclosure auctions are worth less than the total amount owed to the bank or lender. The lender now owns the reo bank owned property. The reo foreclosure property is now put on the open market for sale.
If you want to know how to find reo properties, you may contact us for a list of reo properties in Southern California. We can help you purchase reo property, provide reo real estate listings, find bank owned commercial real estate, bank owned land for sale, and residential reo real estate for sale.
For more details on buying or selling Short Sales and Bank Foreclosures contact Larry Weichman at 714-241-4532. He has represented over 1,000 homes sold in his career. Visit TeamWeichman.com or OCRepoBroker.com