As the pendulum swings to foreclosure, the real estate foreclosure process continues to unfold. In the redemption period, the court decides the ownership of the home and any lienholders(s). After the redemption period, the first record of a deed-in-lieu of a mortgage on the property is filed in the county recorder’s office, and all lienholders are notified of the pending foreclosure proceedings. Once the property is deeded by the county to the court (tentatively set in October), it is recorded in the county inventory of real property and the lien holder is notified that the home is available for redemption. Upon the notice of redemption, the lien holder must respond within twenty-one days or the lien will be released and the redemption period is ended.
It is not uncommon for a house to be foreclosed before it reaches redemption. If there are not any qualified homeowners, there is typically an attorney on retainer at the courthouse and foreclosure properties are purchased in bulk quantities. The sale of these homes usually results in a loss of profits for the mortgagee and the lender.
When foreclosure occurs in the Spring, the process of foreclosure can take from a few weeks to several months, depending upon the severity of the underlying debt, the length of time that it took to negotiate and the amount of equity held in the home. In many cases, a judge has ordered a sale of the house prior to redemption but sometimes this doesn’t occur until sometime in the Fall or Winter months.
A property foreclosure can also occur in the Fall when the bank has determined it can no longer make its mortgage payments. In most cases, the banks will attempt to sell the home before foreclosure occurs. At this point, many investors have purchased the homes with the intent of making an offer to purchase the home as soon as it becomes available for sale. If the bank agrees to sell the house at a price greater than the current value of the home, investors will often go out and try to negotiate for a better price. At this time, the investor and the bank work together to determine who is going to make the highest offer for the home.
It is possible for the bank to hold onto the house during the redemption period if they feel that the value of the home is not worth the price paid for it. In some cases, the bank will hold the home for several months until they can sell it at a reasonable price and make a profit on the home.
The redemption period is a time when the bank allows the home to go on the market in order to collect enough money to settle its outstanding debts and make a profit on the home. When the home goes on the market, it can attract buyers from all over the country.