Is there Such as Thing as a Free Bank Foreclosure?
Posted on January 26, 2009
Filed Under Bank Foreclosures | Leave a Comment
Contrary to what you might have heard there is actually no such ting as a free bank foreclosure. Both in the context of whether a bank can foreclose on a property for free, and whether they will give away a free foreclosure property. The two words definitely do not work hand in hand with one another.
The foreclosure process is a costly exercise and never comes free, in some instances I have heard of a foreclosure process costing as much as $50 000. This is definitely not free. The bank is owed a debt on the mortgage by the homeowner and this is why they foreclose on the property in the first place, this debt, together with the legal costs and any other costs that the bank may have paid to foreclose on the property is what the bank has to recover on sale of the property.
So no matter what anyone might advertise or tell you, you must understand there is no such thing as a free bank foreclosure. The bank is trying to recover delinquent payments not give anyone a break. Judicial or non-judicial foreclosure sales take place after a homeowner has been unable to make his or her mortgage repayments. This is happening all over the US at present on a huge scale. It is happening to home owners in all walks of life, and the general consensus is that this is being cause by the credit crunch crisis. Properties have dropped dramatically in value and have created a buyers market.
The buyers market in turn has enticed property buyers to turn to the foreclosure market and in buying cheap properties in this way, in some areas more traditional real estate has decreased in value by as much as 40%. This factor also forces home owners into foreclosure as they find that they have no equity in their property. In some instances property that was worth $450 000 two years ago won’t even fetch as much as $270 000 in the traditional real estate market.
During a judicial foreclosure (this means of foreclosure is the only process allowed in some states), the bank files a law suit against the borrower through the court. The borrower is then sent a notice of default that will request he pay all the money that is due to the bank. It is imperative that the borrower respond to this default notice, generally within thirty days. He or she is compelled to make arrangements for payment during this given time, but if these arrangements are not made the bank again requests that the court give permission for a sale of the real estate. This is recorded at the courts and has also to be published in a local newspaper for at least three weeks. A notice of sale is also handed to the home owner and generally posted in a certain amount of public places including outside the property in question.