Add an answer to this item.A foreclosure is the legal process initiated by a lender to take possession of a property when a borrower fails to make their mortgage payments, ultimately transferring the property's title. The process typically begins with a written notification to the borrower about missed payments and the bank's intent to foreclose. There are three main phases:
1. Pre-Foreclosure: This is the period before the case goes to court, where the homeowner is aware of the impending foreclosure but still occupies the property. It offers an opportunity for investors to negotiate directly with motivated owners who want to avoid credit damage or debt.
2. Foreclosure Auction (Court Auction/Trustee Sale): The property is publicly auctioned, often online through county clerk websites or at the courthouse, to the highest bidder. This phase is known for potential deep discounts but also high risks, as properties are sold "as-is" and require cash payment.
3. REO (Real-Estate-Owned) / After Foreclosure: If a property doesn't sell at auction, the lender takes possession, cleans it up, clears the title, and then resells it to the public, often through real estate agents and the Multiple Listing Service (MLS). This phase is generally less risky for buyers