Judicial Foreclosure ProcessJuly 27th, 2009
Author: admin
Before a property goes to auction, the lender will typically request a current and updated "title report" on the property. This will guarantee and affirm that the lender has priority over all other possible claimants.
Other claimants could be other mortgages, unpaid taxes and judgment creditors. Some states require that the lender make further notices under specific circumstances for an "unclean title" such as to the IRS and may wish to re-access the amount of money they are willing to accept at auction, especially if there is a possibility that other leins will remain on the property after foreclosure.
An updated appraisal or a "broker's price option", which is much more common, will also be obtained before the auction. The lender relies on local real estate brokers for something in writing which would indicate what the broker would list the property if the property had a listing.
The request for this "brokers price option" is an almost certain indication that the foreclosure will occur and gives the broker an immediate advantage over the real estate investor. The broker gets a first hand look at the property and knows that it is going into foreclosure and what the value of the property most likely is.
It is very common and well documented that some unscrupulous brokers will assign very low values to property they themselves are interested in and as underhanded and unethical as this is, brokers all across the nation practice this abuse of power in order to buy the property for themselves or to assist a client when bidding at auction.
You as an investor must begin to realize that in order to compete, you must gain knowledge before the official process of foreclosure begins or else you will be competing with those that have inside knowledge that you yourself do not.
We now take a look at the next step in the foreclosure process and to determine what that is, we need to know if this is a judicial or non-judicial foreclosure.
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