As a real estate investor, understanding the foreclosing process can serve you well, regardless of what niche of investing you’re pursuing. The foreclosure process is easier to understand than most people think. Essentially, there are a few stages during the foreclosure process that the homeowner goes through before the home goes to auction.
- Mortgage Delinquency
The first part of the foreclosure process is when the homeowner gets behind on making mortgage payments. The actual length of delinquency varies from state to state, but usually, it’s between 3 to 6 months of missed payments.
- Notice To Foreclose
When the loan has not been paid for those months, the bank will file a Notice of Default (NOD) at the County Office. This notice lets the homeowner know that they are risking their home being foreclosed upon if they cannot bring payments current within a certain time frame. That time frame may vary from state to state. Some states do not have a notice of default.
- Auction Date Set
If the homeowner cannot bring the loan current, an auction date is set. This means that the bank is foreclosing on the home and it will be auctioned off to the public on a designated date. Usually, the auction happens on the steps of the county courthouse. The bank will follow the state process and timeline for foreclosure or trustee sale.
When the auction takes place, the bank will have a preset amount to begin the bidding process. The highest bidder will get the house. Generally, the winner will have to secure the home with a deposit that same day and have the rest in cash within 24 hours. Should no bidders bid above the price that the bank set, the bank will get the home and the home will then be considered an REO.
Where You Fit In The Foreclosing Process
If you’re using our Niche2Wealth strategy, you’ll be targeting sellers when they’re in the Pre-Foreclosure Stage. This is the stage where they’ve become delinquent in their payments to the bank, but they still have a chance to work with the bank to get their loan current.
Now, it’d be great if you could simply find those sellers who are just about to become behind in payments – and sometimes you can – but it’s easier to find those who have been given a Notice of Default because there are lists that name such homeowners.
This is the target niche you’ll be marketing to and our course “Foreclosure Investing Mastery” is just the course to teach you how to go about that. If you haven’t had the chance to check this course out yet, please do so, as it’s full of all the information you need to find, buy, and profit from real estate investing in the foreclosure niche. It’s full of proven strategies that can certainly help you experience the financial freedom you’re after.