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Understanding Foreclosures

It is an unfortunate commentary, but when economic activity declines and housing activity decreases, more real property enters the foreclosure process. High interest rates and creative financing arrangements are also contributing factors.

When prices are rapidly accelerating during a real estate “bonanza”, many people go to any lengths available to get into the market through investments in vacation homes, rental housing and trading up to more expensive properties. In some cases, this results in the taking on of high interest rate payments and second, third and even fourth deeds of trust. Many buyers anticipate that interest rates will drop and home prices will continue to escalate. It is possible that neither will occur and borrowers may be faced with large balloon payments becoming due. When payments cannot be met, the foreclosure process looms on the horizon.

In the foreclosure process, one thing should be kept in mind: as a general rule, a lender would rather receive payments than receive a home due to a foreclosure. Lenders are not in the business of selling real estate and will often try to accommodate property owners who are having payment problems. The best plan is to contact the lender before payment problems arise. If monthly payments are too hefty, it may be that a lender will be able to make some alternative payment arrangements until the owner’s financial situation improves.

Let’s say, however, that a property owner has missed payments and has not made any alternate arrangements with the lender. In this case, the lender may decide to begin the foreclosure process. Under such circumstances, the lender, whether a bank, savings and loan or private party, will request that the trustee, often a title company, file a notice of default with the county recorder’s office. A copy of the notice is mailed to the property owner.

If the default is due to a balloon payment not being made when due, the lender can require full payment on the entire outstanding loan as the only way to cure the default. If the default is not cured, the lender may direct the trustee to sell the property at a public sale.

In cases of a public sale, a notice of sale must be published in a local newspaper and posted in a public place, usually the courthouse, for three consecutive weeks. Once the notice of sale has been recorded, the property owner has until 5 days prior to the published sale date to bring the loan current. If the owner cures the default by making up the payments, the deed of trust will be reinstated and regular monthly payments will continue as before.

After this time, it may still be possible for the property owner to work out a postponement on the sale with the lender. However, if no postponement is reached, the property goes on the block. At the sale, buyers must pay the amount of their bid in cash, cashier’s check or other instrument acceptable to the trustee. A lender may “credit bid” up to the amount of the obligation being foreclosed upon.

With the recent attention given to foreclosure, there also has been corresponding interest in buying foreclosed properties. However, caveat emptor: buyer beware. Foreclosed properties are very likely to be burdened with overdue taxes, liens and clouded titles. A buyer should do his homework and ask a local title company for information concerning these outstanding liens and encumbrances. Title insurance may or may not be available following a foreclosure sale and various exceptions may be included in any title insurance policy issued to a buyer of a foreclosed property.

Your local title company will be happy to provide additional information.

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COLONIAL REALTY INC.
1007 Skyway Hwy.
Atchison, KS 66002
Phone (913) 367-4464
Email: colonial@coloniallistings.com

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"Sharon was very helpful and persistent in selling my home. Sharon and Bob Hanf did an amazing job keeping me in the loop of what was happening with my property and stayed in contact even if there was nothing to report. I really appreciated the dedication and consideration I consistently received throughout my entire experience. I would highly recommend Sharon or Bob or any of the realtors at Colonial Realty over any other realtors for certain. #honest #forthcoming #diligent #persistent #trustworthy #followthrough" 4/4/2017 bretthuskamp
We would just like to take this opportunity to Thank Bob Hanif for helping us find our dream home here in Atchison. He was so helpful and kind and went above and beyond for us which is really refreshing these days. We would highly recommend him if you are looking for an Excellent Realtor and an all around honest Professional with a great work ethic that genuinely cares about what you are looking for and won't stop until you find the home or property that is amazing! 10/2/2016 The Banister Family
We bought and sold our first home through Colonial. We currently have our 2nd home we purchased through colonial. When the time comes, I am sure our 3rd home will be through colonial. We couldn't be happier. Thank you Sharon. 6/30/2016 Alice
Very knowledgeable and understanding to my needs. No pressure and made good on all he promised quickly responded to all questions. was more than willing to work around my schedule and my needs for appointment times. 08/23/2016 SAGE6060
What a wonderful experience buying a house! In a very short period, Bob showed us multiple homes and went above and beyond in providing honest and genuine input for a completely professional experience. Best realtor experience I've had!! 07/18/2016 peggystarr9
Kyle helped me sell my home August of last year. He was very professional and easy-going. He made the process a lot easier for me to understand. There was even an issue a day of closing, at no fault of his own, but he was able to solve the problem and close the house on time. I highly recommend him as an agent. Thanks again. 07/11/2016 RiswR1991
Our experience with Kyle was one we will always greatly appreciate. He went above and beyond to sell our home, and spent so much time helping us to buy the right home that fit our needs. We are certain that Kyle will be the next top agent in Atchison and other surrounding areas. Thanks Kyle!! Your the best!! 07/06/2016 csickler2
Kyle was my agent in closing two real estate purchases in the last year and was very efficient and professional. He guided me through the process each time, gave me tips, kept me appraised on the progress of the sale, answered any questions I had and was present at the closing. I would recommend him highly! 06/29/2016 mwalters1022
I would recommend Sharon Locke to anyone looking to buy or sell in Atchison. Sharon was our seller's agent on a recent transaction and she made the process very easy and successful. I appreciated her insight regarding staging our home and her knowledge of how to market the property at its best. Atchison is a difficult market for sellers, but we had over a dozen showings. After only 13 days on the market, we accepted a very good offer. I credit her expertise with making that happen. Throughout the process, Sharon fielded our many questions and helped guide us to closing. We appreciated her professionalism and attention to detail; nothing escaped her attention. From receiving an offer to closing day, she looked out for our interests and ensured that we had everything in order so we could close on another property the following day. In sum, I'm glad that we trusted Sharon with our real estate transaction. 05/25/2016 bobchilders9
She got me $2000 more in negotiations than I was going to settle for....I was anxious to sell and be rid of the property and she suggested I hang in and negotiate for a little more--and it turned out to be good advice. 04/08/2016 scraven14
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