Definition of Foreclosed Home:
Orange County, California Foreclosures:
A foreclosed home is one in which the owner is unable or unwilling to make current or future mortgage loan payments and the bank has repossessed the home and it is now part of their inventory or real estate owned or REO. These homes are usually not for sale until the entire foreclosure process is complete and the bank or investor lists the home in the Orange County Multiple Listing Service (MLS.) The foreclosure process involves three stages:
Pre-foreclosure: the bank filed a Notice of Default (commonly referred to as an NOD) saying that the owner has fallen at least two months behind on their mortgage payments (although this is not a uniform amount of time – this varies from lender to lender, sometimes approaching 90 even 120 days). At this point, the owner still has 2, 3 even 5 months to try and modify the loan the existing lender, bring the loan current, sell the home or work out a South Orange County short sale agreement with the lender.
Auction/Foreclosure: the South Orange County homeowner can't make the mortgage payments so the bank schedules an auction date to sell the home "as-is" to the highest bidder – who must have the funds readily available at the time of the auction.
Bank Owned: If the home fails to sell at the auction (usually this happens when the mortgages and liens on the property are greater than the market value of the home), and the lien holders of the home are paid off through private mortgage insurance (PMI) or end up taking a loss on the investment. These homes are also known as REOs (real estate owned). The bank with the primary mortgage on the home is now the owner and will usually list the home with a South Orange County real estate agent in the Orange County MLS.