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Foreclosures and REO Properties

The present economic scenario has made many owners to lose their homes through foreclosures. The number of bank owned properties is exploding alarmingly. Usually, the defaulting borrower is evicted from the property and the title is transferred to Housing and Urban Development department (HUD).

The present economic scenario has made many owners to lose their homes through foreclosures. The number of bank owned properties is exploding alarmingly. Usually, the defaulting borrower is evicted from the property and the title is transferred to Housing and Urban Development department (HUD).

Real Estate Owned (REO) by bank or any financial institutions come up for resale once all the paperwork related to transfer of ownership is completed. HUD advertises sales of such properties in their website and if you are interested, you can check up with the department and select one which suits you the best.

Owning a home is everyone's dream. There is no better way to realize your dream than to opt for a REO property. You can get the best deals here because most REO properties are sold by financial institutions in its original condition and without any value additions. Thus, you can own the property cheaply and later on can make necessary changes when your financial situation improves.

The price is determined by HUD after a lengthy appraisal process. The FHA appraisers check whether the property, if old, confers to the Minimum Property Requirements (MPR) and if new, meets the Minimum Property Standards (MPS). This process determines whether the property is insurable or not.

REO properties are not sold as per the usual mortgage procedures. Buyers can either opt for direct loans or guaranteed loans here. Direct loans are funded directly by the government under its rural housing plan. The scheme provides better opportunities for low income families to buy, construct, refurbish and perk up single family units in rural areas. The program is highly beneficial to all low income group people to own a good house without much headache. The loan seeker receives the loan amount directly from USDA Rural Development and the standard time limit for repayment is 33 years. The agency takes into account the repayment capacity of the borrower and as such, may offer shorted or longer loan periods, if you request so.

For higher income groups, there is a 502 Guaranteed Housing Loan. These loans are given by different lenders involved in the p[process, including banks and credit unions. Here, the USDA Rural Development gives a loan note to the concerned lenders and they, in turn, make the loans available to the property buyer. This type of loan attracts stricter stipulations. You would have to repay in a maximum of thirty years and there is usually no scope for any seller concessions. Fortunately, most lenders loan up to 100% of the valueFree Articles, including the costs of repair and reconstruction.

 

Source: Free Articles from ArticlesFactory.com

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If you are looking for more information Related to REO Properties then feel free to visit http://www.reohud.org



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