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A home becomes a bank owned home or bank foreclosure once the owner defaults on their payments and cannot bounce back. The property then gets put up for trustee sale or foreclosure auction. At this time an interested buyer or investor has the opportunity to bid on the home. At this time the bank or lender may also repurchase back the home. If the property does not sell to someone outside of the bank, the property becomes real estate or bank owned property.

Bank owned property, or bank foreclosures then become an opportunity for an interested buyer or investor to contact the lender with their interest in the property.  Banks do not want bank foreclosures sitting on their books indefinitely. They are looking to move these properties. After all, banks are in the business of cash and mortgage loans, not necessarily interested in holding real estate.

Keep in mind that the bank owned homes process can be different than your usual home buying process. For example, most bank loans will offer a “redemption period” where the homeowner may still repurchase the property. Be sure to have a good understand of bank foreclosures and a realtor to help you out in the process.

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