| With Michigan's economy seemingly forever flagging | | | | auction. |
| the rest of the Nation, how to purchase foreclosed | | | | If the bank accepts your short sale offer, you will |
| homes in Oakland County Michigan has been gaining | | | | basically create instant equity. For example, say the |
| interest among real estate investors. | | | | distressed homeowner owes $200k on the mortgage |
| There are several methods real estate investors can | | | | and that the home is worth only $195k. If you could |
| employ when deciding how to purchase foreclosed | | | | negotiate a short sale for $150k, you've just created |
| homes in Oakland Country Michigan. | | | | 45k in equity. |
| We will discuss these here. | | | | You will also be helping the distressed homeowner |
| First, you can bid on a home when it is being auctioned | | | | because they will get to avoid the foreclosure and the |
| off at the sheriff's sale. | | | | damage to their credit that this event would case. Of |
| Here's how this works. | | | | course, they'll have to move out of the home since |
| When a homeowner misses 3 consecutive mortgage | | | | you will be the new owner, but they would have had |
| payments they will be in preforeclosure. At this point, | | | | to move out anyway if it went through foreclosure |
| their mortgage lender (bank) will pass their info to an | | | | and the redemption period ended. |
| attorney who will file the mortgage default information | | | | How to Purchase Forclosed homes in Oakland County |
| once a week for 4 weeks as public information in a | | | | Michigan |
| paper called the Legal News. | | | | Another example of how to purchase foreclosed |
| 28 days later, the home will be auctioned off at the | | | | homes in Oakland County Michigan is to try to buy the |
| local county courthouse steps to the highest bidder. So | | | | property from the bank when it's become an REO. |
| if you go to bid, you will be competing against other | | | | After the bank takes the home back after the |
| investors and also an agent for the bank, who will also | | | | foreclosure (assuming it is the highest bidder at the |
| bid on the home to make sure it doesn't sell for a | | | | auction) they will now have a "non-performing asset" |
| ridiculously low amount. | | | | on their books. Banks don't like non-performing assets |
| If the agent bidding on behalf of the bank wins, the | | | | for several reasons. |
| property will be called an REO (Real Estate Owned). | | | | One reason is because the bank is in the business of |
| This is just a term used to denote a property that has | | | | lending money and making money on interest, not from |
| gone through foreclosure and that was taken back by | | | | holding real estate. Second, Federal Law requires that |
| the bank. | | | | the bank have a certain amount of cash reserves on |
| Before you decide to learn how to purchase forclosed | | | | hand for every dollar of "non-performing asset." This |
| homes in Oakland County Michigan, you may also | | | | means that for every dollar of bad debt the bank has |
| want to consider learning the short sale investment | | | | on its books, it has an opportunity cost in the form of |
| strategy. | | | | "good money" that can't be loaned out until that bad |
| This is a strategy in which you try to buy the defaulted | | | | debt is eliminated. |
| mortgage note before the foreclosure auction. | | | | In short, this costs the bank money. |
| Here's how it works. | | | | Lastly, banks, being publicly traded entities, suffer when |
| You contact the homeowner facing foreclosure and | | | | they have too much bad debt on their books. Their |
| present yourself as an investor who may be able to | | | | stock price suffers as a result. The faster banks |
| help their situation. You'll need the homeowner's | | | | unload their bad debt from the books, the better their |
| approval. | | | | stock prices will be. |
| You will then contact the loss mitigation department of | | | | So, if you can get a hold of REO lists, either through a |
| the homeowner's lender and try to negotiate a | | | | mortgage broker, or through networking with other real |
| discount on the defaulted mortgage. You will make the | | | | estate investors, you can make offers on REO's that |
| case for the homeowner's hardship and why the | | | | banks hold. Some investors can pick up REO |
| homeowner will not be able to make payments on the | | | | properties from banks for 40 to 50 cents on the dollar. |
| mortgage. You will try to show how the property has | | | | In summary, being an educated real estate investor on |
| flaws or other problems that will make the bank think | | | | how to purchase forclosed homes in Oakland County |
| about taking it back as an REO after the foreclosure | | | | Michigan can lead to big profits. |