| Short Sales,
Foreclosures, Repossessions are all categorizations of
financial situations as they relate to real property.
The main differences in these
categories are their position along the timeline and
current ownership.
Short Sales: These
are properties that have a current Market Value which is
less than the present Loan Value. This generally
happens in a depreciating market when property values
fall. It is also possible when the Finance Company
loans more money than the property's Market Value.
This situation is commonly known as: "Upside Down".
Occasionally, due to Financial Hardship, a Home
Owner may make arrangements with their Mortgage Company
to sell their property at a Price which is less than the
Loan Value. The Home Owner may retain Possession
and Ownership of the property throughout the sales
process. Upon a Sale and Successful Close of the
property, the Home Owner will be required to vacate the
property and shall receive No Proceeds from the Sale.
Foreclosures: These
are properties that are going through a legal process
known as Foreclosure, generally due to the Home Owner
being delinquent on the Loan Payments. Some other
common reasons for Foreclosure Proceedings may be
delinquent Tax Payments or Home Owner's Association
Payments or IRS Tax Liens. Once Foreclosure is
Filed, the Home Owner has a Statutory Period, which
varies from State to State, in which to pay up
delinquent payments and become current. If this
does not occur, then the Foreclosure progresses with the
Home Owner possibly still occupying the property with
Ownership Rights. After the Foreclosure Period,
the Property is Sold at Auction and the Home Owner will
be required to vacate the property and May or May Not
receive Any Proceeds from the Sale.
Repossessions: These
are the properties that have been through the
Foreclosure Process or the Mortgage Company has accepted
a "Deed in Lieu of Foreclosure" from the Owner.
These properties are Owned by the Mortgage Company, thus
they are commonly known as: "REO" or "Real Estate
Owned". At this time, the Owners are usually not
occupying the property.
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