This post is going to be one of many posts on the foreclosure process in Logan UT that I will be writing over the next couple days. First of all let’s discuss what a foreclosure is.
A foreclosure is a process that allows the lien holder, or lender of a mortgage, to recoup the costs owed on a loan that has defaulted by taking ownership of the property, and then selling it. When a home owner or loan borrower fails to make payments on their mortgage, the lender will file a notice of default. After notice of default, the foreclosure process can end in a few different ways:
- The borrower can pay off the amount they defaulted on to reinstate their loan during the 90 day grace period allowed to Utah home owners. This grace period is known as a pre-foreclosure.
- The homeowner can try to sell the property before foreclosure to avoid having a foreclosure on their credit record or seek a short sale, which allows the homeowner to sell the property for less than is owed.
- A public auction is held and is sold to an investor/home buyer.
- If the lender doesn’t get a descent offer price at auction, or there are no bidders, the lender will take ownership of the property and will evict the residents. These properties, if you’re a buyer, are known as REO (Real Estate Owned) properties or bank owned properties.
During the foreclosure process, buyers/investors have 3 chances to purhcase at bargain prices.
1. Pre-Foreclosure – A notice of default is public record. If your a home buyer looking for a great deal on a Logan foreclosure, it’s a smart idea to watch the public records for these default notices. This pre-foreclosure period is usually the best time to purchase a property because the home owners still live there, and it will be in better condition than if it had been foreclosed on. Besides, most home owners would rather sale their property if they can’t afford the payments than go through the foreclosure process. (Check Logan Utah Notice of Defaults)
2. Auction - If the borrower does not sell the home in pre-foreclosure and doesn’t reinstate the loan, the bank will move to auction. During the auction, buyer/investors have a chance to bid on the property against other bidders. Buyers are often required to pay cash for the property within a 24 hour period. The downfall of auctions is the limited time frame to check out the property. Although auctions provide the best chance to get a great deal, the drawback of not being able to inspect the property could backfire.
3. REO (Bank Owned) - A bank owned property is a foreclosed property. The owners have been evicted by the sheriff, and the bank will try to sell the property. Usually bank owned properties are sold through real estate agents, and provide a chance to inspect the property properly. This is the safest way to purchase a foreclosure, but buyers may not get as great of a deal as an auction. Buyers will also have time to obtain financing, during an auction buyers will have to pay for the property immediately.
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