After a distressed borrower has missed about 4 payments, the bank will issue a Notice of Default. The certified Notice of Default tells the borrower that if they do not bring their loan current, the house will foreclose. These notices become public record. They are posted at the county courthouse. You can also get access to these records on online foreclosure sites like foreclosure.com, realtytrac, and bargain network. These services offer a one week free trial period. If you like the service, and find it valuable there is a monthly charge. Personally I like bargain networks service the best. Its format is the best. With that said, Foreclosure.com’s service provides the most information without having to pay anything. In many small Idaho towns, the information given without the paid subscription is often sufficient to identify and contact home owners who have received notices of default.
These services also provide valuable information and can give you email updates anytime a new preforeclosure or for sale by owner property is found.
How do I contact owners in default?
Some try door knocking. Some use mailers, some make phone calls. RealtyTrac has programs and campaigns to help you contact default owners to find out if you can purchase those distressed homes.
Notice of Trustee Sales/ Foreclosure Auction
If the loan is not brought current. Aproximately three months after the notice of default another official notice is given. The “notice of trustee’s sale” or the foreclosure auction. This notice is posted on the borrowers property, at the courthouse, and in a newspaper. This notice states that the house will close in 28 days. This is the desperation point for foreclosure sellers and many investors with cash like to step in and relieve them.
How do I purchase properties at a foreclosure auction?
Trustee sales usually take place at the court house steps of the county seat. This is a public auction, and anybody may bid on the house to buy a house at a trustee sale you should know that:
- You must provide $5,000 certified funds prior to bidding.
- Must pay off the entire purchase price in full within 24 hours.
- Properties sold at the public auctions are sold without warranties. There still may be liens and judgements tied to the property. The properties might even still have residents needing eviction. Some liens such as second mortgages will sometimes be shafted.
Courthouse sales are not the most reliable auctions. The date posted in the newspaper is very often postponed or canceled because of bankruptcy filing, postponement, reinstatement, repayment, Deed-in-lieu of foreclosure, or sale.