A bank foreclosed property is offered back to the market with a significant price mark down making it possible for property investors or home buyers
. When home owners renege on their home loan, their lender will issue a notice of default indicating a time frame for borrowers to pay their obligation. A foreclosure notice follows when the obligation is not met and the process now enters the pre-foreclosure phase. The home will be under this phase until an auction is completed. There are some states like Florida where homeowners have a right to redeem their property. This allows home owners to pay off the remaining loan even after repossession to get back their property.
Judicial and Non-Judicial Foreclosures
A bank foreclosed property can be either judicial or non-judicial. A judicial foreclosure will require parties to appear before the courts to dispose of the foreclosure case. Both home owner and lender can present their side in court. A non-judicial foreclosure is more common and it does not require court hearings to be dispensed
Eviction is another phase of the process of foreclosure. This takes place after the bank takes possession of the home. A bank can exercise their right to empty the property through eviction. This proceeding can be commenced a few weeks after repossession and is done with the approval of a judge. All bank foreclosed homes are free of former occupants, which is an advantage for buyers.
The period of default before foreclosure proceedings are initiated vary between three and four consecutive months. The banks will turn over a defaulting borrower's case to its legal department where a notice of default and foreclosure will be sent to the homeowner. The bank usually gives anywhere from 30 to 90 days grace period for the home owner to either settle their arrears or vacate the premises.
Once the notice of foreclosure has been dispatched to the borrower and filed with the county courthouse, the auction will follow. An auction notice will be posted on the courthouse and published in newspapers bearing the schedule and venue of the foreclosure. If the auction is unsuccessful the bank foreclosed property becomes real estate owned and are then listed on foreclosure databases to be offered for sale.