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Questions.. It seems that the process is very complex and shrouded in legalese.  What?  When? How? Below, we try to offer answers to some of the common questions people encounter:

What is a foreclosure?

A foreclosure or distressed sale begins when the owner stops making the mortgage payments. After the delinquent owner has missed several payments, the lender will record a Notice of Default against the property.

What is an Bank Owned Property

Bank owned properties are foreclosures that are available to be purchased after the auction.  In order to understand the concept of  buying bank-owned property, you'll need to understand how the property became a part of the lender's inventory.  There are a number of reasons why a property becomes bank-owned. 

How do I find a foreclosure I want to buy?

The easiest way is to find a foreclosure service who will, for a fee, provide you weekly or monthly lists of foreclosure properties.  The best of these is Foreclosure Update.
 

All of the foreclosures I have looked at have no opening bid. Where do I find the opening bids?

To fully understand why opening bids are not available, you have to understand the process of creating the opening bid itself.

The Notice of Trustee’s Sale document is required by law to provide an estimate of the total debt of the loan as of the date of the document. This is a good starting point; however, this is rarely the opening bid at the foreclosure sale.

There are several companies involved in calculating an opening bid. Companies such as MGIC (Mortgage Guarantee Insurance Company) and the Veterans Administration insure the loan, or investors such as Freddie Mac (Federal Home Loan Corporation) or Fannie Mae (Federal National Mortgage Corporation), participate in the process.

In most cases, the bid is calculated by the insuring or participating parties, which is forwarded to the Mortgage Company, then forwarded to the trustee, which then forwards the opening bid to the Auctioneer Company. At this time it is posted on our web site..

Where can I find out more about the property?

Additional research should be done.  There are many sources of information about the property starting with the plaintiff's attorney whose name is listed on the listing.

I found a property, now how do I bid?

Show up at the sale site early.  The auction will begin promptly at the scheduled time.  The first item of business will be any properties that were scheduled for sale but have been postponed to another date.

The next item will be the actual auction.  The auctioneer will announce each property as it comes up for sale.  This information is provided on the Notice of Trustee Sale document. 

Generally, persons bidding show up at the sale with multiple checks.  The first check is for an amount close to the opening bid, and additional checks are in lesser amounts.

 

Who are the trustee and the beneficiary ?

The Trustee is the individual or company that is performing the foreclosure process.  The Beneficiary is another name for the lender, or the company who is owed the money.

 

What is the opening bid?

The opening bid is the minimum dollar amount for which the property may be sold.   The trustee may choose to open the bid at a specified amount, then raise the bid to an amount higher than the opening bid, but never more than the total debt.

An estimated bid is provided in the Notice of Trustee Sale document.   To determine the final opening bid,  contact the trustee.


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