When an economic downturn occurs, foreclosures in the housing market rise as does the number of diversifying opportunities for investors. In Texas, once a loan is over 90 days outstanding, a bank or lender can begin the foreclosure process.
The foreclosure process takes nearly two months to complete. At the foreclosure auction, the bank’s representative will “buy” the loan at a minimum of the loan balance + administrative fees.
For example, if the loan balance is $350,000 and the admin fees are $10,000, the bank representative would “buy” the home for $360,000.
If there are no other investors at the foreclosure auction interested in the property for over $360,000, the bank retains ownership of the real estate. Banks called these properties Real Estate Owned (REO or OREO).
When a bank owns an REO, a five year timer begins. Banks have 5 years to sell that REO and document along the way that they are actively selling the property. If you are an investor, now is a great time to tap into these REO lists in the Austin area. Here is where we can help:
Right now at Skelly Agency, we are sourcing these REO properties for our investor clients. If you are interested, let’s talk! Schedule for your free REO consultation here.
