About Home Foreclosures
Buying a home that is a foreclosure can be a great investment. Most people think of buying a foreclosed home is purchasing a home at the county courthouse step. It is not the case most of the time. With the right guidance you can buy a home that has all the liens paid and has a clear title.
HUD, VA, Fannie Mae, and Freddie Mac are government entities and they insure the mortgage company if the mortgage note defaults. After HUD, VA, Fannie Mae, or Freddie Mac acquires the property, they have a contractor that perform needed repairs to protect the public’s safety, make sure no liens are on the title and orders an appraisal of property value. If the property needs work to be done to the property that makes it non-livable, they place a figure on the amount and place it in escrow or fix up the home. When this process is complete, they offer the property to the open public to purchase. Typically on HUD and VA, a set number of days (ex. 10 days) the property is on the market for owner occupied purchaser only. After that it is open to all buyers and investors.
Banks and individual lenders also foreclose on properties that are in default. Most of these properties also make it to the open market.
If financing is required, the buyer before making an offer on a property has to obtain a financing letter of approval. There are many programs that allow people to purchase foreclosures as a homestead with little money down. HUD offers a $100 down program for owner occupied residency but the buyers has to offer list price for the home. If you are an investor, the typical is 20%-25% down payment.
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