Bank foreclosure is the legal way of terminating the right of the mortgagee to the mortgagor's rights to a property. This usually happens when the mortgagor is not able to pay the debts to the bank on time. When the foreclosure happens, the mortgagee is able to take away the mortgagor's rights to the property. The property may then be sold in order for the debt to be paid.
Here is more information on how bank foreclosure works:
- Property. In bank foreclosure, the property is not owned by the lender. In this case, the lender is the bank. This is known as bank owned homes. The mortgagor gives the property as collateral to the bank where he borrowed money from. In the event that the mortgagor is not able to pay the debt in a specified amount of time, the bank then has the right to take the property rights from the mortgagor in order to cover the unpaid debts.
- Conditions. There are three conditions that must be met before a property goes into the bank foreclosure process or bank repo. The first condition is that the property of the mortgagor must be the collateral in order for it to be sold. The second condition is that the payments from the mortgagor are not made on time. The last condition is that the bank must be able to accomplish all the legal requirements for the state where the property is located. These are the three conditions that should be met before the property can go into homes listings for foreclosure.
- Court Proceedings. In the event that a foreclosure happens, there will first be court proceeding to give the mortgagee a chance to plead his case. Usually, the judge gives the mortgagee an extension for the payment if the mortgagee presents a feasible payment plan. If the judge does not rule the verdict in favor of the mortgagee, the property will then go to the public auction list for properties in foreclosure.
- Public Auction. The property is presented to the public for auction or foreclosure information. This will give the mortgagee a chance to get back his property. The highest bidder on the auction will have the chance to pay the debts of the mortgagee. The mortgagee must then pay the winning bidder the debt in a period of time in order to get back the property. If the debt is not paid within the time period, the property rights will be transferred to the bidder.
- No Bidders. In some cases, there are properties that do not have bidders at all. When this happens, the bank is ready to bid on the property. The bank will then get the property back.
These are some of the concepts behind bank foreclosure. You can read more about the details regarding the whole process so that you can have a better understanding of the subject. There are a lot of different websites that offer readings on foreclosure. You can also invest your money in houses that are in bank foreclosure.