- Process starts when the owner misses consecutive mortgage payments.
- Bank assumes ownership rights of the property.
- Property can be sold via auction or through the Multiple Listing Service.
- There are two types of foreclosures: Judicial and Non-judicial
- House is sold lower than market value because banks are interested in a quick sale.
- Takes on average 3 to 7 business days to receive a response from the bank after an offer has been submitted.
- Process starts when the owner demonstrates hardship to the lender or when the owner misses consecutive mortgage payments.
- Bank agrees to sell property for less than the seller’s mortgage because there is not enough equity to pay off the mortgage.
- Money from sale goes directly to bank.
- Property is sold lower than market value.
- Typically takes around three to six months to receive a response from the bank after an offer has been submitted.
- On average, credit ratings lower the same amount of points whether from a foreclosure or from a short sale (i.e., a 30 to 300-point deduction).
In the video below, Michael Light discusses the differences between foreclosures and short sales: