"Repos and Foreclosure" 101
This information shall in no way be interpreted as providing legal and/or tax advice. Recipient is strongly advised to seek legal and/or tax counsel.
What is Foreclosure? Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files a public default notice. More about Foreclosures...
What is a Short Sale? A short sale is a situation where the property a seller needs to sell however the proceeds of the sale are not sufficient to pay the existing mortgage. It is an alternative to foreclosure. The term short sale refers to a process when the lender agrees to accept a payoff that doesn't cover the outstanding loan in order for the sale to take place. The seller receives nothing, except possible debt relief and not having a foreclosure on their credit record. More about Short Sales....
What is a Deed-in-Lieu? The deed in lieu of foreclosure is another option to avoid foreclosure. This process is basically giving the title and ownership of the property to the lender in trade to be free and clear of the loan. This process is recommended to be accompanied by a foreclosure lawyer to ensure that all the legal correct paperwork is completely to ensure the home owner has a legal transfer. More about Deed-in-lieu...
What is a Repo? A Repo is a shortened name meaning "Repossessed" property. This is a property where the ownership has been taken by the person or entity who was the Lender on the property.
What is an REO? "REO" is the acronym for a "Real Estate Owned" Property. In short this refers to a property that is owned by the Lending Institution that either foreclosed or took title to property through a Deed in Lieu of Foreclosure.
What is an Assumption? An Assumption is the transfer of the seller's existing mortgage to a buyer. Assumable mortgages must contain a provision that allows a buyer to assume responsibility for the mortgage from the seller. An loan that is assumable does not need to be paid in full by the original borrower upon sale or transfer of the property. There different types of assumptions, the 2 main are referred to as "simple" or "formal". A "Simple Assumption" means there is no qualification process for the Buyer. These have become quite rare and if not non-existant. A "Formal Assumption" requires the Buyer qualify for the loan, just as the Seller did. In either case, there is an fee paid to a lender (usually by the buyer) in order to assume the existing mortgage.
What are the Foreclosure Laws in Idaho?
Foreclosure Glossary
