Foreclosure Process Questions
A foreclosure refers to a legal process in which a lender recovers any money that he/she may have given to an individual by selling an asset. In many cases a foreclosure will take place when the person stops making payments to the lender. Since foreclosure is a legal process, one may have many questions regarding foreclosures and its pros and cons. Given below are some of the important questions about foreclosures that have been answered by Experts.
If new owners were to purchase a foreclosed home, would the new owners be responsible for any debt still owned on the home?
In most situations, the new owners of the foreclosed property may be responsible for any debt and back Home Owners Association (HOA) fees against it. The owners may check with the title company if a proper title search was done on the property before it was bought. In some situations, the title company may agree to pay off the debt as the owners did not purchase a clear title.
What are the pros and cons of buying a home in foreclosure?
There are various advantages and disadvantages of buying property in a foreclosure. Some of the advantages are:
- One gets to buy property at a price that is lower than the market value
- The cost of the property can appreciate to a good value in a short period of time.
However there are various disadvantages of foreclosures as well. Some of them are:
- One cannot get the property inspected before the deal is closed
- The maintenance of the property may not be very good due to the financial problems of the previous owners.
- A title search may not be conducted on the property before the deal is closed
- One must have all the money to pay for the house ready before bidding and committing to buy the property
- An appraisal cannot be done before making a bid
If an individual sells his/her primary residence in foreclosure; will he/she be responsible for any taxes on it?
An individual may not be responsible for any taxes on his/her primary residence if he/she sells it in a foreclosure.
Why is a Deed in Lieu considered to be a better option than a foreclosure by most people?
Many times a Deed in Lieu is considered to be a better option than foreclosure by many people because this helps the lender save time and money that would have otherwise been spent on the foreclosure. However, it may still have a few negative points as well. How the deed will affect a person’s credit will depend on how the lender reports it. One may request the lender to report it as paid-settled.
What is the procedure for foreclosure in the state of Florida?
The process of foreclosure in the state of Florida is as follows:
- The person may not be notified when the foreclosure is starting. The law does not require that the person should be informed. If informed, he/she may have time till the date of the foreclosure to stop it.
- The lender may then file a court action. If the person does not respond to the court action, the lender may request the court for a final ruling
- The date of the sale and the total amount that the person owes the lender will be calculated once the final ruling is done.
- A notice of the foreclosure will be given in the paper once a week, for two weeks before the date of the sale
- In most situations, an auction will take place at the county courthouse one month after the court ruling
- The property will then be sold to the person who bids the highest. The buyer will then have to pay a 5% deposit at that time and the remaining money by the end of the business day. If he/she does not do so, the property will be sold again.
- The buyer will be given a certificate of sale once the he/she pays for the property
- If no one disputes the sales, the county clerk will transfer the property to the new buyer within 10 days of the foreclosure.
A foreclosure can be a very tough time for a person to deal with. Not having enough information about the process and its rules can add to your frustration. The laws and process of foreclosure may sometimes differ from state to state. You may ask an Expert if you need to know about the process of foreclosure in your particular state or have any other problems regarding them.