Till yesterday ordinary people outside the world of mortgage and finance did not know about bank foreclosures. But today, thanks to the crisis raging across US bank foreclosures has become a household term. The two words, bank foreclosures, conjure up images of the wolf knocking on the door and huffing puffing down the house. The house in question is not just a building of bricks and mortar – it is a home where real people live and love. The bank foreclosures are targeting the nests and the homes.
Foreclosure is a judicial process. Today it is raging and raising a storm. Bank foreclosures starts when the borrower in a mortgage contract, where the house has been kept security, fails in the regular payment – in other words the borrower defaults. When that continues beyond 90 days then the loan becomes delinquent. This is the point of time when bank foreclosures take off. A notice is issued to the borrower that the lender is seeking the permission of the court to realize dues by staking a claim on the house. A date is fixed for hearing and if the court considers the allegations of the lender to be valid then the green signal is given for the next phase of the judicial process – Sheriff’s auction. The term bank foreclosures are used because in nine cases out of ten it is banks that are the lenders.
The final stage of the bank foreclosures process is when the auction fails to find a satisfactory buyer. Then the banks repossess the units and this is said to be Repo houses or repossessed houses. The banks now clear tax dues, repair the unit giving these a cosmetic touch and try to sell them off. Since the end of 2006 bank foreclosures have been alarmingly rising. The banks are weighed down by innumerable unsold vacant units. These are snowballing into a grave situation for the locality and the nation. The vacant units emanating from bank foreclosures are causing law and order as well as health problems. Recently laws are being passed regarding bank foreclosures. The vacant houses must have the name of the lenders pasted on the front door so that easy contact can be made. Taxes and maintenance works have to be done. Considering all the snags, bank foreclosures have become a headache for banks.
Recently banks have been organizing free tours with lunch included to attract buyers.