What does sold foreclosed to lender mean

If everything checks out, move to closing and the keys to the home will be yours. Many foreclosed properties require extensive repairs to get up to code. The work can range from electrical upgrades and plumbing repairs to full-scale roof replacements and foundation work.

Your inspection should uncover most of the work that needs to be done. When a homeowner fails to make mortgage payments, lenders have the option to seize a home, a process known as foreclosure. Much like a car loan is tied to the collateral, the vehicle, your mortgage is tied to your property. If you fail to make payments, your lender has the right to seize the collateral — your home. In some states, foreclosure is a lengthy legal process that can take years.

In others, it can take less than a few months and bypass the court system completely. Real Estate Investing. Debt Management. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance.

Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Preventing Foreclosures. The Pre-forclosure Period. How Foreclosures Work. By Cara O'Neill , Attorney.

A foreclosure sale occurs when the bank exercises its " lien " rights and sells a home at auction. The bank obtains a lien an ownership interest in the property when a borrower takes out a mortgage. The lien helps protect against a significant loss by allowing the bank to foreclose on the house and sell it at auction if the borrower stops making the agreed-upon payment defaults on the loan. The lien doesn't allow the bank to sell the home at a foreclosure sale immediately after a default, however.

Instead, a home lender must follow federal and state foreclosure laws. Federal law as of January prohibits a bank from initiating foreclosure proceedings before a homeowner's mortgage payment is days past due. The purpose of the federal waiting period is to help the homeowner stay in the home.

The extra time gives the owner a chance to find a way to bring the loan current or to apply for a loss mitigation program. Create a personalised content profile.

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Foreclosure Terms A-O. Foreclosure Terms P-S. Foreclosure Terms T-Z. Table of Contents Expand. Phase 1: Payment Default.