Foreclosures Can Be A Buyers BargainBy Debbie Wilson
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If you've been bargain hunting for your new home loan, you might want to consider the foreclosure market. According to the Mortgage Bankers Association of America, banks began foreclosing proceedings on more than 175,000 homes in the first quarter of 2006, up 7 percent from the same quarter last year. And with 1.6 million loans showing past due, this could easily translate into a buyers bargain market.
What Is A Foreclosure?A foreclosure starts when a homeowner is at least 90 days behind on a mortgage payment and receives a notice that they are in default. This notification process is actually known as a pre-foreclosure. And, while every state has its own procedures for how the remainder of the foreclosure takes place, ultimately if the mortgage is not paid, the new home loan is foreclosed and subsequently auctioned off by the county.
Foreclosure AuctionsIn many cases, homes that have been foreclosed and put on auction are never purchased by the public. Instead, the home ends up being sold to the bank that holds the mortgage, for the amount of the loan balance. And because banks aren't in the business of owning homes, they put the house back on the market, hoping to unload it quickly. That said, not only are there some great new home loan deals to be had, but there are also an abundance of beautiful houses in all sorts of shapes, sizes, and styles.
How To Purchase A ForeclosureWhen looking to purchase a foreclosure, you can either bid at the auction, purchase from a bank via Real Estate Owned properties, or skip the middleman and step in before the bank does and work out a win-win deal with the defaulting homeowner. Whichever new home loan option you choose, do your research. There are myriads of Web sites that amass foreclosure data and then sell it for approximately $40 per month. It may sound like a lot of legwork, but this type of mortgage bargain hunting just might be the perfect foreclosure storm that leads you directly to your affordable dream home.
Mortgage Bankers Association of America
About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.
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