Foreclosure Process

In Florida, foreclosure requires a judicial process. This means that there must be a lawsuit filed and this must go through the court system before a property can be sold at auction.

The foreclosure process begins when an owner defaults on loan payments for usually three consecutive months and the lender files a public default notice, called a Notice of Default or Lis Pendens. A lawsuit can also be filed for non payment of property taxes.

The foreclosure process continues in one of these three ways:

1. Pre-Foreclosure

The owner returns the loan by paying off the default amount to during a grace period determined by state law. This grace period is also known as Pre-foreclosure. During the pre-foreclosure period, the owner sells the property to a third party. The sale allows the owner to pay off the loan and avoid having a foreclosure on his or her credit history.

If the homeowner can show a financial hardship, the lender might agree to sell the property for a price that is less than the amount owed. This is called a "short sale"

2. Foreclosure Auction

If a loan is currently in default at the end of the pre-foreclosure period, the property is offer at a public foreclosure auction. The foreclosure auction is open to anyone, and is held in a public place, at the courthouse or in front of the property being auctioned. The successful high bidder must post a deposit and pay the balance of the purchase price within a prescribed time.

If no one bids on the property at the auction, then ownership of the property is taking it by the lender.

3. REO

The lender takes ownership of the property, usually with the intent to re-sell it on the open market. The lender can take ownership either through an agreement with the owner during pre-foreclosure or by buying back the property at the public auction. These properties are also known as bank-owned or REO (Real Estate Owned by the lender).

Financial institutions will give these properties to real estate agents to list and to sell.X

Each step in the Foreclosure process provides the opportunity to find bargains on Foreclosure homes.

The time to get a good deal on foreclosure real estate is now. If you are interested in buying or investing in South Florida Foreclosures, particularly in Parkland, Coral Springs, Boca Raton and surrounding cities, contact Raffaele.

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