What is a Foreclosure?

What is a Foreclosure?

by Brian Bagnall

If you are interested in the real estate industry there is a good chance that you know what foreclosures are all about. But even if you are not into real estate you have probably heard the word “foreclosure” before. The fact of the matter is that in today’s day and age this word is very popular. The reason for this is that more people than ever before are buying homes that they cannot afford, and in turn running into major problems with the bank.

So what is a foreclosure? Generally speaking, foreclosure is something that happens when a home owner does not pay their mortgage on time, or worse yet they decline to pay it at all. When you take out a mortgage on your home you are telling the lender that you will pay the money back month in and month out until you are done. But when somebody does not do this the bank has the right to send a foreclosure notice. This means that if you do not get caught up with your late payments or work out an arrangement that they home will be repossessed, and you will be without anywhere to live. So as you can see, a foreclosure is not a good thing in any way, shape, or form if you are a home owner.

If you feel that you are having a tough time making your mortgage payments you should consider getting in touch with the lender. Tell them that you are worried about foreclosure, and ask if there is anything that they can do for you. Chances are that if you do not try to hide and are upfront that you may get a break from the lender.

When a home is foreclosed on it is usually put up on the auction block shortly thereafter. This is when real estate investors really get excited because they feel that they can get a good deal on a home. They will either buy a foreclosure to sell it back to the public after fixing it up, or they may even rent it out. But no matter what a buyer does with a foreclosure, a home like this is sure to be purchased by somebody. In other words, it is not going to sit there for months on end.

Overall, foreclosures are not difficult to understand.