About Fore-closure.com
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Purchasing a foreclosure can be risky but an often rewarding experience financially and also emotionally. Not all foreclosures are good deals, and some need in excess of $10,000 worth of repairs, and/or are located in high life risk neighborhoods.
This web page is dedicated to showing you: how to find, buy, purchase and finance a property that has been foreclosed on or any property that is in distressed condition. There are many ways to acquire this type of property, we will help show you some of the ways.

This site has a list of current properties that are in the process of being foreclosed on. However, there is not any single all encompassing list. There are many lists and they change on a daily basis. Buying a foreclosure is a dynamic process and what worked one time may not work the next.  This web site has links to as many foreclosure web sites that we are aware of, and that are useful. Many web sites have a big list, but the properties have been sold for months. But before we begin you need to have some basic terminology, so please read the following:

Foreclosure: this is a process that takes place when the borrower defaults on the loan.
Judicial Sale: this is where the loan in default is auctioned at the court house steps.
Judicial Deed: this is the deed that is issued by the Court at the auction. See "Types of Deeds" for more information.
REO or OREO: stands for Real Estate Owned or Other Real Estate Owned by the Bank. The foreclosure process is over, the loan was sold to the highest bidder (typically the Bank), the Bank was issued a Judicial Deed, and now the Bank is the owner of the property and has rights to sell the property to recapture their investment.
Arearage: this is the dollar amount plus costs the prior borrower is in arears, or has not paid to the Bank.
Total Debt: this is the amount the Bank typically bids at the foreclosure sale, it typically includes the Arearage.
Short Sale: this is where the Bank allows the current owner to sell the property for less than they owe on it or for less than its market value.
Asset Manager: this is the person at the Bank that is responsible for managing the asset (loan or REO/OREO) while the Bank still has an interest in the property. They are king, they hold the key to the gold. They are typically paid on commission with a monthly bonus, catch them at the right time and they will deal.

Buying Foreclosures
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Once you find a foreclosed property you have to be able to buy it. You can finance the purchase of some foreclosed properties, but most have to be paid for in cash because they are in such bad condition. Most people buy foreclosures after the Bank owns it, but the best time to buy them is before the Bank owns them. Here is a brief overview of how to buy and finance foreclosures.
? To buy a HUD foreclosure you must work with an Approved HUD Real Estate Broker.
? To buy a Fannie Mae or Freddie Mac Foreclosure you have to work with any Real Estate Sales agency that has access to the MLS. It is possible to buy foreclosures directly from Fannie Mae and Freddie Mac.
? To buy Foreclosures from Banks you need to work with the asset manager from the Bank or their Real Estate Agent
? You can also buy foreclosures at the auction on the court house steps.
? You can also buy foreclosures at an auction sponsored by an auction company; this is post the Judicial Sale.
Judicial Foreclosure
? Judicial Foreclosure allows the property to be sold by court order after the borrower has been given sufficient public notice. The property is sold in an auction at the courthouse.
? Non-judicial Foreclosure is allowed when the mortgage document contains a power-of-sale clause, not requiring any court action.
? Strict Foreclosure is a process where the court provides a deadline to the borrower to repay the debt in full. If the borrower does not pay, the court awards full title to the lender. There is no formal sale.
? Deed-in-lieu-of-Foreclosure or a friendly foreclosure is where the borrower agrees to sign over the title to the lender without any formal court action.
? Illinois is a Judicial Foreclosure State
Redemption
? Equitable-Right-of-Redemption allows the borrower or any other person to redeem the real estate between the notice of default period but before the foreclosure sale. Total debt plus costs must be paid to the lender. Junior lien holders often redeem during this time period to protect their investment.
? Statutory-Right-of-Redemption takes place after the foreclosure sale within a statutory time frame.
? Illinois does not have a Statutory-Right-of-Redemption period.
? Illinois allows an Equitable-Right-of-Redemption after the date of the foreclosure sale.
? In Illinois the borrower may retain possession for 30 days after the foreclosure sale, but must pay rent to the entity that acquired title at the foreclosure sale. On day 31 the occupant must vacate or they can be evicted.
? Illinois offers borrowers what is called the Statutory-Right-of-Reinstatement within 90 days after service of summons.

Judicial Deed
? Occurs when the default is not cured by redemption or reinstatement.
? A judicial sale or sheriff?s sale will take place.
? Each defendant in the suit must be given written personal notice and public notice must be published in a newspaper of general circulation.
? The successful bidder at the sale receives a certificate of sale.
? Approximately 30 days later, or after the sale is confirmed, the certificate holder will receive a sheriffs deed (Quitclaim Deed).
? Typically when the lender re-sells the foreclosed property they will issue a Special Warranty Deed.
Deficiency Judgment
If the foreclosure sale does not net enough to repay the total debt, the borrower may be held liable to repay the debt through a personal judgment.

Pitfalls
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? Property Condition
Banks and Government agencies are exempt from any property disclosure laws. This gives them an unfair advantage over you. When the Bank or Government Agency takes back a property they have already hired contractors and realtors to tell them what is wrong with the home and what the value is "as is" and as "repaired".
Therefore, unless you are a skilled contractor, investor or have access to either it is very easy to over pay for a property in foreclosure. You can always get a home inspection, but frankly they are worthless when buying a foreclosure. What you really want is an inspection completed by a FHA 203k consultant. They will provide you with a report that outlines the minimum repairs needed to obtain financing.
? Title
When buying a foreclosed property having title insurance is critical. Most foreclosed properties had second and third liens. Ensuring these liens have been released correctly is critical. If the foreclosure was filed in the wrong county there may still be existing liens. You should get a lien search before buying any foreclosure.
? Utilities and Real Estate Taxes
The foreclosure process does not wipe clean past due taxes or utility bills. They travel with the property. Taxes and Water bills must be paid by the buyer or seller at the time of closing. Sometimes the past due taxes and water bills are higher than the property value. Gas and electric bills can be waived as long as it can be proved the prior occupant is responsible for them.
? Attorneys
You should always have an Attorney, and they should be experienced in buying foreclosures. You should not use an attorney that does an occasional Real Estate Closing.
? Purchase Contracts
Most Banks have their own contracts and/or addenda that are attached to the Board of Realtor contract. These addenda are one sided in favor of the Bank and basically say, "what you see is what you get and what you don't see tough luck". These contracts are typically non-negotiable, other than price and closing date.
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