The U.S. real estate market has been staggering with a flux over the last two years. The reasons are many like a chain reaction starting from the downward economy affecting the financial markets. This caused cost of living to soar and made borrowers of home loans to suffer in not able to meet the repayment installments. Consequently the mortgage lenders took action to foreclose the loans and sell the homes through foreclosure sale of public auction. “Repo Homes” is a new terminology as the direct result of the foreclosure epidemic.
Repo homes denote housing properties repossessed by the banks and other mortgage lenders. The foreclosure process requires the mortgage lenders to follow the rules laid out in the foreclosure laws of the State. The judicial way of foreclosure is filing a law suit in the County Court by the mortgage lender against the borrower of loan, after sending appropriate intimation through legal notice about the commencement of foreclosure process. The non-judicial method of initiating the foreclosure process is by sending a recorded notice to the borrower and arranging for a trustee sale of the property, without going to a Court. In both the foreclosure proceedings the ultimate object is to dispose off the property by foreclosure sale and this is done through public auction.
Homes that do not get the cut off price as bid in the public auction are repossessed by the lenders and are known as “Repo Homes”. These Repo Homes are meant for sale by the lenders to retrieve the balance of loan amount invested in them. Till such time these Repo homes will be lying as bad debts and non-performing assets. In the legal foreclosure process it takes months together to finish the process and all these months Repo homes are to be maintained by spending further money. Lenders are in a fix to dispose off these Repo homes quickly therefore by allowing flexible discounts on the sale price.
As such Repo homes are best buy for home buyers at a price well below their market value. Repo homes in the possession of the lenders belong to assorted categories and models like single family homes; multi-family residences; town homes and condos. Repo homes offer a wide choice for selection in prime locations with all the conveniences. Another advantage in buying these Repo homes is they are with clean titles of ownership; all liens wiped off and tax dues paid. The buyer of these Repo homes will not have any problems later on.
One more category of Repo homes is also available in the market. They are Repo homes forfeited by the government for tax dues. These Repo homes can be bought at a cheap price since the tax due outstanding will be very much less – just a fraction of their value.