Government Foreclosed Homes Sold by HUD, VA and Others
Reasons for foreclosure acquisition
- Non-payment of mortgage installments guaranteed by government agencies
- Tax default
- Seizure by the customs
- Government surplus
- Unclaimed property
Who owns government foreclosure real estate properties?
Homes foreclosed by government agencies are sold at discounted prices by Housing and Urban Development (HUD), Veterans Administration (VA), Fannie Mae, Freddie Mac, Internal Revenue Service (IRS), U.S. Customs, local Sheriff’s office, local tax administrations, and a variety of other public agencies. In some cases, homeowner cannot pay their taxes and their houses are foreclosed.
Expect low- to mid-market homes when you want to buy government foreclosed properties, primarily bought by first-time homeowners who lost their jobs or bought properties that they could not afford.
Real Estate Owned (REO)
REOs are typical foreclosure properties. They are vacant. People who cannot afford to pay home mortgage loan installments start ignoring the property. They could not afford to spend money on it. Furthermore, some occupants damage the property because of their problems.
Lenders prefer to sell the property “as-is” rather than fixing it up. Again, lenders are not in the real estate business; they are not in the repair business either. They are in the lending business; and they are under legal and accounting obligations to get rid of such properties to reduce the total amount of their non-performing assets. They have to stay liquid to meet federal and state requirements.
REOs are on the liabilities side of their balance sheet rather than on the assets side. That’s why they want to sell them as soon as possible to recover their receivables on the assets side of their balance sheet.
There are no uniform rules set forth for selling REOs by lenders. Each lender applies different rules. Accordingly, you need to make another offer if your first offer is not accepted. Change your terms and see if the next offer will be attractive.
More on government foreclosures opportunities…
- Government foreclosure auctions
- Government foreclosure listing – Updated
- How to negotiate the best possible deal to buy government foreclosures?