The Ins and Outs of Foreclosure

Canal HomeWhen I first heard that the foreclosure process could be completed in as few as forty one days, I was astounded. I couldn’t believe it but, after doing some research, I found that technically, someone could foreclose a property within 41 days of a default on a payment. The way that Texas has laid out the requirements for a foreclosure from default to sale is pretty quick, with only a couple of steps. Obviously, an interest in real estate necessitates at least a basic knowledge of the foreclosure process, but it is such a simple and quick ordeal that, in truth, most everyone should probably know just how swift of a process it is.

The first step in any foreclosure is obviously a default on a mortgage payment. At that point, the borrower can no longer afford to, or simply isn’t paying for the mortgage. From the stand point of the real estate opportunist, this is a chance for some people to go in and work with the actual borrow to take over a home by either offering financial help or some other service that lets them stay in the home, such as a change in ownership and then a rental agreement. This is definitely not the norm when one thinks about taking advantage of foreclosures, but it is an option.

The second step is the filing of a legal notice. At this point, the owner goes to the county office and official puts in that their mortgagee is falling behind in payments and that they would like to sell the house to someone else. There is a mandatory 20 period following that in which the mortgagee may attempt to resolve the issue in whatever way they can. There are two parties that should take particular note at this point. The first is the mortgagee. Chances are, they’re living there. If at all possible, they should work with someone to save their mortgage and figure out their payment situation. The other is the potential buyer. At this point, you may start discussing buying the home, as it is on its way to market sooner rather than later.

The third step is the actual sale. Twenty days prior to the actual sale of the home at the monthly auctions, the owner will now post that the house is going to auction. This is when the home is officially foreclosed and all efforts are now being put into finding a new owner. The current resident can all but be ready to go, and the real estate sharks start circling. After the 20 day period (not always exactly 20 days, but at least) the auction happens on the first Tuesday of the month, and the house gets sold new again. Bidding must reach at least two thirds the original price, and the court handles the financial details of it all.

The fourth and final step is the actual takeover of the home. The buyer now owns the home, but sometimes the previous tenants aren’t gone yet, which is where an eviction can come in to play. The sheriff will assist in clearing out the home, and there you have it. The home is now officially and fully owned by someone else. All in just over a month (assuming you timed it right).

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