Copy of Projected Foreclosure to REO Cost Analysis

Planning to purchase or refinance a home? The most up-to-date national average mortgage rates can only go you so far. Get in touch with a mortgage lender and provide some information so they can offer you an estimate of the interest rate you would really pay. After doing so, you’ll be provided with a loan estimate, a crucial piece of paper outlining the essentials of the mortgage you’ve applied for. Before proceeding with the underwriting process, it is highly recommended that you thoroughly check your loan estimate to ensure that you completely understand the loan and are able to comfortably make the payments.

An estimate of loan costs is a three-page document that explains the costs associated with a mortgage loan in plain English. This standardization makes it simple to evaluate loan packages from different lenders to get the best one for your needs. If you apply for a mortgage and don’t immediately get turned down because you don’t satisfy the lender’s minimum requirements, you’ll obtain a loan estimate within three business days. If that happens, ask for an explanation from the lender in writing within 30 days. A credit report charge is the only other possible cost associated with obtaining a loan estimate. A loan estimate is good for 10 working days from the day it is provided to you. Try to make a decision about a loan offer within that time range; if you wait too long, the lender may alter the terms and provide you a new loan estimate. In most cases, the terms of the offer will remain the same, but fluctuations in the market and your credit score might result in a better or worse deal. True, mortgage rates might fluctuate several times in a single day. Of course, you should take your time and give yourself more than 10 days to find a house you wish to buy and make an offer.

When a property held by a lender is not purchased at a foreclosure auction, the lender retains ownership of the property, which is referred to as real estate owned (REO). REO properties are those whose owners have defaulted on their mortgage payments and the bank is attempting to resell them. When a property cannot be sold for enough to pay off a loan, the lender (often a bank) takes possession. These homes typically sell for far less than market value because of the substantial maintenance they may need. Short sales and foreclosure auctions are common pre-foreclosure events when a borrower has stopped making mortgage payments. In the absence of either, the lender can finalize the foreclosure and take possession of the property. Banks, non-bank lending institutions, government agencies, and government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac are all possible sources of funding. The lender may try to sell the REO property without using a real estate agent. Banks frequently publish online listings of REO homes in this situation. Loan officers at a bank may inform prospective homeowners of the bank’s REO properties.