subject: Facts About Government Foreclosures That Buyers Should Remember [print this page] As a serious foreclosure investor, it is only right that you find out as much as you can about these distressed properties that you are investing in. You might be well-informed about pre foreclosures and bank foreclosures but not as much with government foreclosures. To remedy this, you should read on.Government Insured MortgagesThere are actually two ways a home buyer can pay for a property. One is by paying in cash and the other by applying for a mortgage loan. In the second option, there are two sources: private lending institutions and government agencies such as the Department of Housing and Urban Development, Department of Veterans Affairs, Department of Agriculture and the Internal Revenue Service.When you take out a mortgage loan insured by any of the above agencies, the title of the property will be in the banks name. If the mortgage obligations are not met, the bank forecloses and the mortgage balance will be paid by the government. On the other hand, homeowners who did not pay the taxes on their home are also susceptible to foreclosure. The resulting repossessed houses are called government tax foreclosures.Government Foreclosures AuctionsIn an effort to recover their losses, the government holds auctions with the intention to sell off the property to the highest bidder. Initially, first time home buyers are the only ones allowed to bid during the first round of foreclosure sale. The bids are made by real estate agents who are authorized by the HUD to do it on the buyers behalf. If none of the bids were accepted for the foreclosure house because it did not meet the minimum amount, another auction will be set and this time it will be open to the public.Investing in these government foreclosures, in addition to bank foreclosures and pre foreclosures, is certainly a nice way to earn considerable profit. They are sold at bargain prices as well and would require some repair. If there is time, a home inspection is recommended to determine the extent of the propertys deterioration.
