A foreclosure is the process by which the lender i.e. the person holding the mortgage, sells the home or property due to the borrower’s continuous failure to pay the mortgage debt. By doing so the borrower looses all rights to the property.
There are mainly two kinds of foreclosure – statutory and strict. A statutory foreclosure is basically the sale of the property under the ‘power of sale’ clause that allows the lender to sell without the need for any court action. A strict foreclosure is when the court decides the amount that is due for the mortgage and a time span by which it should be paid making it clear that a default in these payments will lead to the borrower loosing equity or ownership of the property. This results in the property being transferred to the lender.
A foreclosure lead is generally bought by law firms, consultants for mortgages, attorneys, loan modification companies, mortgage brokers, investors in real estate, lenders of hard money, and real estate agents. These sort of people usually focus on short sale listings and loan modifications and hence buy all foreclosure leads. These leads can be found online on several leading websites.
When it comes to the purchase of a foreclosure lead, there is no minimum amount that has to be spent, however, there is a fee of 50$ which is charger as the amount of minimum deposit. Registering on different live lead websites and setting up appointments with web leads are the most efficient ways of getting foreclosure leads.
Foreclosures are generally extremely slow because they have to go through an entire court process. Once the borrower receives a notification with a time span of 20 days to reply to the court. The court now has 40 days to respond back to the borrower. This process goes on back and forth until the borrower can come up with a complaint. This process can take almost a year, if not more to complete. Being the investor, it would be a good idea to communicate with the borrower and negotiate on a price. This will motivate the borrower and help him make a quick decision.