What is the Difference Between Lender Owned and Foreclosure?

September 24th, 2009 | Tags: Foreclosure

foreclosures-lender

Foreclosure

Foreclosure is the process whereby the lending institution that has given the mortgage loan will initiate the proceedings to get back the home. In this case the homeowner who had taken a mortgage loan from the lending institution is unable to make further mortgage payments. The foreclosure laws for the various states may differ. When the proceedings are complete, the property is foreclosed.

Lender owner property

While the lender owned property or bank owned properties are properties that are owned by the bank. After the foreclosure process has been completed, the properties are pt on the block for sale or auction. When the homes that had been foreclosed are not bought at the auctions or can’t be sold, they become the properties of the lender or become lender owner properties.

Now the bank or the lender will technically own the property. After this it enlists the help of an agent to sell the property. Usually these properties are sold way below the market price in order to attract the buyers. Also these properties are sold in “As is” condition. This means that the buyers should check out the lender owned properties before they buy it as the previous homeowners may have failed to repair the damages to the property.

Advantages of buying lender owned properties

Usually the title deed to the property will be clear since the lender would have already expunged the taxes and the liens on the property. For first time buyers as well as investors, it’s a great opportunity to bank the lender owned or the bank owned properties in today’s markets. However it’s important to check whether there are any renters still living on the property, since the latest housing law states that renters can live for at least 90 days (without lease) or till their lease expires (plus 90 days), when the property is been foreclosed.

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