When the word foreclosure is used it includes all the steps of the judicial process of foreclosure including Bank Repo houses. Repo means repossession. Foreclosure happens when the borrower fails to meet monthly mortgage payments. Initially the first stage is known as default. When this continues for about 90 days the mortgage is said to have become delinquent. At this point the lender sends a foreclosure notice to the borrower saying that permission is being taken from the court to realize unpaid dues by foreclosing on the security given – the house. When the court is satisfied with the contentions of the lender then permission for foreclosure is given. To fore close is to close ahead the mortgage. The house is put up for court auction and after conclusion of the sales the lender takes back dues and taxes with incidental charges are cleared. If something is left over it goes to the borrower.
Recently too many foreclosures are causing havoc. The houses are not being sold at the court auctions mainly because it is a seller’s market; the numbers of buyers are negligible. When the house fails to get sold at the court auction the lender, usually the banks take it over. In other words these become Bank Repo houses. Today the Bank Repo houses are flooding the market. Heavy discounts are offered for these Bank Repo houses. The banks are not landlords and want to dispose of the innumerable Bank Repo houses at any cost. But by offering discounts on Bank Repo houses the real estate market is suffering. Discounted Bank Repo houses are pulling down the price of neighbouring houses that are not affected by foreclosure.
For some people Bank Repo houses are offering great opportunities. The first time nest builders can snap up a bargain from the many Bank Repo houses. Purchasing Bank Repo houses has a distinct advantage over buying a foreclosed unit in a court auction. The foreclosed houses can be viewed only from the outside. But in the case of Bank Repo houses one can make a thorough estimate inside and outside. Bank Repo houses are often put up for auction by hiring auction houses. Agents who take potential buyers around to view Bank Repo houses are organizing bus tours. The banks are under great pressure to see that its repossessed houses do not lie vacant as unoccupied houses are causing great problems – attracting crime and creating health problems.