REO, Bank Own- Buy it now!

It’s here, the time to purchase a bank owned property. There are much more active buyers bidding on a home. The need to wait for a short sale or an auction sale isn’t necassary. Banks are asking for at least 10% -down payment and properties to be sold in an as is condition. Make a trip to the city, where the property is located to see what are the pending violations, if any.

 

Most loans which are 10% down payment require Private Mortgage Insurance (PMI). The lender programs may have the option of including the PMI on the rate (in the form of a higher rate), or may include a seperate monthly private mortgage insurance premium along with the mortgage payment (its about aproximates .82% of the loan amount and varies by insurer). The difference is, adding it to the rate makes the payment lower. The downside is when you do have the 20% equity you would have to refinance the loan rather than on a monthly premium you would just call the bank and ask them to remove the monthly PMI premium. It would be wise to you ask your loan officer to give you the different payments and make your decision accordingly.

 

Be prepared, by being buyer ready in these times of multiple offers we suggest the following:

Consult a loan officer to give you a “good faith estimate” (make sure you get a copy of your credit report)

A good faith estimate will show an itemized estimate of all fees involved in closing the mortgage loan

Receive a qualification letter from the loan officer.

Do not disregard an “as is” purchase. Most purchase agreements allow an inspection time frame.

Bank owned properties in many occasions just need paint, carpet, and minor maintenance.

Building sweat equity is what matters.

 

 

 

 

 

 

 

Foreclosure and the time-line.

  By:  www.wespeakrealestate.com 

Who is Who?

Trustor = Borrower

Beneficiary = The Lender/Bank

Trustee = Title Company

What is a FORECLOSURE-   Procedure in which pledge is sold to pay a debt.  In California, there are three steps in the foreclosure of a Trust Deed. A 90-say notification of default; time during which the trustor may reinstate by paying the delinquent payments. 

A 21– day publication.  If the trustor has not reinstated within 90 day period, the beneficiary must publish the time, place and date of the sale and wait 21 days.  During this publication period, the trustor may reinstate by paying the entire balance due.

 Trustee’s sale.  The sale is conducted by the beneficiary but in the name of the trustee who has the title.  The successful bidder at the sale receives a trustee’s deed.     

Timeline:

The Homeowner Is not making payments

January     February    March   

 A 90-day NOTICE OF   DEFAULT Is sent to the Homeowner to Bring the loan Current.

 April       May     June    ( 90 Day Period)

 A 21-day NOTICE OF SALE Is sent to the Homeowner. 

July 1    thru    July 21  (Auction home is sold)

Please be advised every case is different and time-line may vary.