Just when you thought that the only word that you need to keep in mind when it comes to Boston foreclosure houses is “foreclosure,” you realize that there are a lot more. You also need to understand “real-estate owned (REO)” and “short sale.” Why? Because these terms can have some effect on the entire processes of your Boston foreclosure houses.

What is foreclosure?

Foreclosure happens when the borrower or the home owner goes on default, and he can no longer make the repayments to his loan. As a consequence, the lender will have to take action and consider his property as foreclosed. Depending on which state the house is found, the lender may go to court or not. The only goal he has in mind is to sell the house to the one who bids the highest in a public auction. This way, he will be able to obtain a small amount of profit while recover the default payment.

Nevertheless, not all properties will go through a public sale since there are some of owners who will make back payments. The rules on these will differ from state to state.

What is short sale?

This happens when the lenders of the Boston foreclosure houses would have to agree to accept an amount that is less than the default payment. This also occurs before the property goes into public auction. This is ideal for those who are buying foreclosed properties at a much less price since they don’t need to pay any existing loan or make some back payments. Normally, lenders would accept this too, so they don’t have to wait for a very long foreclosure process. They just need to forgive or write off whatever the difference is.

What is real estate owned?

By this time, the property is already at the hands of the lender, and the foreclosure action is complete. The only problem is that the Boston foreclosure houses are not bought, and they are assumed by the banks. They are then sold by these lenders for a price way less than the balance. It’s better that way than never earn anything from the foreclosed home.

Joseph Smith has been educating buyers on the finer points of Boston Foreclosure Properties at FindForeclosureProperties.com for over five years. Click here to visit and read more advice on finding Massachusetts Foreclosure Properties.

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