Bankers: Number of Foreclose Homes, Cars Rose

For nine consecutive quarters, the number of foreclose homes and repossessed cars increased, according to the report by the American Bankers Association.

The association noted that most often, consumers can purchase these repossessed cars and homes at discounted prices.

According to industry experts, many automobile auction companies that market repossessed cars sell only to dealers who are licensed. Typically these dealers placed the cars on used lots. They said that for people who want to purchase used cars, boats or motorcycles may try the local credit unions.

Experts said that prices of repossessed automobiles are based on the standard value of the National Automobile Dealers Association, the remaining unpaid loan amount and the condition of the car. Members of credit unions can inspect the cars and may submit their bids which will be reviewed by the union president.

The East Texas Professional Credit Union said that if the bids are accepted, members can purchase the cars. For non-members to become eligible to purchase repossessed automobiles, they are required to join the credit unions by opening checking accounts.

For people who are interested in purchasing properties who were foreclosed due to non-payment of mortgage loans, they need to have cash or a pre-approved loan during auctions. When lenders foreclosed on properties, they appoint trustees who will place the foreclosed houses for public auctions.

According to industry experts, foreclosure is a public legal procedure, thus announcements of auctions of foreclosure properties are displayed at courthouses.

Allied Home Mortgage branch manager Tom Holyfield said that bank owned foreclosed homes sold at auctions are priced 5 percent below the fair market value. Some industry experts said that potential buyers could find great deals at auctions, but often they are hit or miss because usually, they are not allowed to inspect the foreclosed home first.

In the event that lenders did not receive acceptable bids at auctions, they will take over ownership of the foreclosed houses and sell them. Prices for bank-owned properties vary but in East Texas, houses are sold at market value.

As with auctions for repossessed properties, potential buyers of bank foreclosed houses should submit a pre-approved loan letter or documents showing proof of income.

Industry experts said that potential buyers should know that if several offers were made on a foreclosed home, the banks will determine which offer they will accept and usually, cash offers are the preferred choice of lenders and banks.

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