1. 2011
FE B RUA RY U P D A T E
FREE
FE BRUARY FO R E C L O S U R E S
Caleb and Jodi Moore
Moore & Co. Realtors
Cell : 479-857-3409 or 479-970-8303
Office : 479-968-3300
Email : caleb@cmoorerealestate.com
www.cmoorerealestate.com
Friendly Advice from Caleb and Jodi Moore
Foreclosures are flooding investment as well as won't be easy. Buying a
the real estate market at important terms to know foreclosure is tricky, but if
record rates. This issue when dealing with you do your homework
offers tips on how to buy foreclosures. If you're and follow these 10 steps,
a bank-owned or real looking for a bargain in a you can land a great deal
estate owned property sea of foreclosures, it on a home.

2. Foreclosure Guide
1. Understand the Foreclosure work with an agent or court order to sell the
Process lender. You can also look property.
Foreclosure is a process for notices of defaults and
that allows a lender to auctions in public records 8. Find Financing
recover the amount owed and local newspapers. Whether you use cash, a
on a defaulted loan by home equity line of credit,
selling or taking ownership 5. Check the Property Liens resources from other
(repossession) of the A lien is a legal claim on a investors or mortgage
property securing the loan. property by a lender or products, secure the money
It begins when a borrower/ other entity that is owed for your purchase in
owner defaults on loan money by the owner of the advance. Sellers only want
payments and the lender property. In addition to the to work with serious buyers
files a public default notice outstanding mortgage who are ready to buy
or a lis pendens (Latin for balance, buyers need to be quickly. You could miss an
"lawsuit pending"), aware of other liens, which opportunity if you don't
depending on the state. can drive up the purchase have your financing in
price. Examples include
place.
2. Choose a Foreclosure Stage outstanding property taxes
You're Comfortable With and unpaid repairs or
There are different stages remodeling done by a 9. Know Who to Contact and
in the foreclosure process, contractor. How to Approach the
and each stage offers Owner
unique advantages and 6. Do the Math Depending on the property
disadvantages for the Calculate how much you'll status, the seller will be the
buyer. For instance, some need to sink into the owner in default, the trustee
buyers prefer buying bank- property, outside of (the person or party who is
owned properties because mortgage and tax filing the paperwork to
they're uncomfortable payments. Necessary initiate and carry out the
dealing with distressed renovations, upgrades and foreclosure), or the
homeowners. other expenses can pile up foreclosing lender.
and eat into your profit
3. Contact a Real Estate Agent margin. 10.Make an Offer
If you're a first-time Use a return on investment Usually the offer amount is
homebuyer and you've calculator to determine your somewhere below the
never purchased a home, potential IRR (internal rate market value but above the
let alone a foreclosure of return) on a property. total outstanding liens and
property, a good real estate estimated repair costs. If
agent can be a helpful 7. Research the Local State the property is a pre-
resource and guide you Foreclosure Laws foreclosure or bank-owned,
through the process of California and Texas, for you could prepare an offer
buying a foreclosure and example, follow non-judicial similar to a typical purchase
drawing up a purchase foreclosure process, which offer, contingent on a full
agreement. Make sure they means that lenders are not inspection and title search.
know your priorities. required to go to court or
file a lawsuit to repossess a
4. Find Foreclosure Properties home. Other states like
The easiest way to find New York and Florida
foreclosures is to subscribe require the lender to sue
to online listing services or the borrower and get a

3. FORE C L O S U R ES I N YO U R A R E A
How to Buy a Bank-Owned Property
1. ASK YOUR REAL ESTATE
or Real Estate Owned
AGENT TO CHECK THE MLS Under this buying stage, the lender potential bargain is often less than
FOR BANK-OWNED or bank has taken ownership of the a pre-foreclosure or auction
PROPERTIES
property, either through an property. Here's how to buy bank-
2. CHECK THE POTENTIAL agreement with the owner during owned properties or REOs:
BARGAIN ** pre-foreclosure or at the public **Bank's break-even amount -- includes the
auction. REO means "real estate unpaid balance of the loan, any fees and costs
3. CONTACT THE LENDER incurred during the foreclosure process and
THROUGH AN AGENT TO owned" by the lender and indicates any other liens the bank had to pay off to take
EXPRESS YOUR INTEREST ownership of the property. Estimated market
the house has already gone
IN SEEING THE PROPERTY value.Your monthly expenses as a homeowner
AND MAKING AN OFFER through the foreclosure process (mortgage payment, taxes, insurance, repairs,
etc.)Subtract all your costs as a buyer (break-
and has been repossessed by the
4. NEGOTIATE A PURCHASE
even amount, additional liens, repair costs)
lender. The lender usually sells the from the estimated market value of the
AGREEMENT - BUY AS IS property, and use that number as a basis for
property to recover the unpaid your offer to the bank. This is all public
5. CLOSE THE DEAL loan amount and typically clears information so you can research on your own
with the county recorder, consult a local real
the title for any buyer. But the estate agent.

4. Arkansas B A N K R UP TCY
Foreclosure Laws
A LEGAL RECOURSE THAT ALLOWS A
Pre-foreclosure Period PERSON OR BUSINESS TO CLEAR ANY
DEBT OBLIGATIONS BY REORGANIZING
In Arkansas, foreclosures can be handled
THE PAYMENT AMOUNT AND PAYMENT
either in or out of the court system, but SCHEDULE OF THOSE DEBT OBLIGATIONS.
the lender must have an appraisal of the A BANKRUPTCY STALLS THE FORECLOSURE
property taken before the scheduled PROCESS, KEEPING A FORECLOSING
foreclosure date. LENDER FROM PROCEEDING WITH THE
FORECLOSURE UNTIL THE BANKRUPTCY
In a court-handled foreclosure, the court
PROCEEDINGS ARE COMPLETED OR THE
determines the amount in default and
COURT IN CHARGE OF THE BANKRUPTCY
gives the borrower a short time to pay ALLOWS THE LENDER TO CONTINUE WITH
the debt to the lender. If the borrower THE FORECLOSURE.
fails to pay the full amount owed within
that timeframe, then the property goes up
for sale, usually about 30 days after the
court considers the matter.
D E E D OF TRU S T
Power-of sale clauses in mortgages allow
lenders to foreclose on property in
default without going through the court
A LEGAL DOCUMENT THAT DICTATES
system. To begin the foreclosure process THE TERMS OF A LOAN USED TO BUY A
out of court, the lender will have a notice PROPERTY AND TRANSFERS THE
of default filed with county records. The OWNERSHIP OF THE PROPERTY TO A
borrower can stop the foreclosure THIRD PARTY CALLED A TRUSTEE
process by paying off the amount owed UNTIL THE LOAN HAS BEEN PAID IN
any time before the foreclosure sale. FULL. THE TRUSTEE CAN SELL THE
PROPERTY TO RECOVER THE
REMAINING LOAN BALANCE FOR THE
ARKANSAS FORECLOSURES LENDER IF THE BORROWER VIOLATES
THE TERMS OF THE LOAN (I.E. DOES
ARE HANDLED BOTH IN
NOT MAKE MONTHLY PAYMENTS).
COURT AND OUT OF COURT. A
TYPICAL OUT-OF-COURT
FORECLOSURE CAN LAST A
LITTLE LESS THAN THREE
MONTHS.
F OR E C LO SU R E
Notice of Sale/Auction A PROCESS THAT ALLOWS A LENDER
For power-of-sale foreclosures handled TO RECOVER THE AMOUNT OWED ON
out of the court system, the notice of A DEFAULTED LOAN BY SELLING OR
default filed by the lender also serves as TAKING OWNERSHIP (REPOSSESSION)
the notice of sale, as it contains all the OF THE PROPERTY SECURING THE
information pertinent to the sale (time, LOAN. THE FORECLOSURE PROCESS
location, property description, etc.). BEGINS WHEN A BORROWER/OWNER
Within 30 days of this notice of default DEFAULTS ON LOAN PAYMENTS
(USUALLY MORTGAGE PAYMENTS) AND
being recorded, a copy of the notice and
THE LENDER FILES THE NECESSARY
the lender's intention to sell is mailed to
DOCUMENTS TO BEGIN THE
the borrower.
FORECLOSURE PROCEEDINGS.

5. The lender also posts a notice of sale in
the office of the county recorder. The F OR EC LO SU R E
notice is published in a local newspaper
for four consecutive weeks, with the final
SALE
notice being published at least 10 days
before the sale.
A PUBLIC SALE OF A PROPERTY
At the sale, which is run by an auctioneer, TO RECOVER A DEBT OWED BY
anyone can bid on the property, with the THE OWNER OF THE PROPERTY.
exception of the trustee, who may only THE SALE CAN BE OFFICIATED BY
bid on behalf of the lender. The highest A TRUSTEE, AN ATTORNEY OR A
bidder is awarded ownership of the LOCAL GOVERNMENT OFFICIAL,
property and must pay the full bid price DEPENDING ON STATE LAW.
within 10 days of the sale. For out-of-
court foreclosures, the borrower has no
right to redeem the property after the
sale.
L IS P E N D EN S
A LENDER MUST HAVE AN
APPRAISAL OF THE PROPERTY
TAKEN BEFORE THE LATIN FOR "LAWSUIT PENDING,"
SCHEDULED FORECLOSURE A PUBLICLY RECORDED NOTICE
DATE OF A PENDING LAWSUIT AGAINST
A PROPERTY OWNER THAT MAY
AFFECT THE OWNERSHIP OF A
PROPERTY. SOME STATES
The property must sell for no less than REQUIRE LENDERS TO FILE A LIS
two-thirds of the appraised value. If this PENDENS TO BEGIN THE
value is not met, the property must be FORECLOSURE PROCESS IF A
offered for sale again within 12 months of BORROWER IS IN DEFAULT ON
the original sale date. If this occurs, the LOAN PAYMENTS.
second sale awards the property to the
highest bidder, regardless of the appraisal
price.
If the property is foreclosed through the
M ORT GAG E
courts, the borrower has one year from
the date of the sale to redeem the
property, provided that they pay the
A DOCUMENT THAT DICTATES THE
amount of the purchase price from the
TERMS OF A LOAN USED TO BUY A
auction plus interest.
PROPERTY AND GIVES THE
LENDER SOME CLAIM TO THE
PROPERTY (EITHER OWNERSHIP
OR A LIEN) UNTIL THE LOAN HAS
BEEN PAID IN FULL. THE LENDER
CAN TAKE STEPS TO HAVE THE
PROPERTY SOLD TO RECOVER THE
REMAINING LOAN BALANCE IF
THE PROPERTY PURCHASER

6. Thank you for N OT IC E O F
viewing our D E FAU LT
newsletter. We
hope it was A PUBLICLY RECORDED NOTICE
THAT A PROPERTY OWNER HAS
informative, yet MISSED SCHEDULED LOAN
PAYMENTS FOR A LOAN SECURED
not exhaustive. BY A PROPERTY. SOME STATES
REQUIRE LENDERS TO RECORD A
Please feel free to NOTICE OF DEFAULT TO BEGIN
THE FORECLOSURE PROCESS.
give suggestions to
make it better and/
or topics you
would like to know N OT IC E OF SA LE
more about. (N T S OR NF S)
A DOCUMENT ANNOUNCING THE
PUBLIC SALE OF A PROPERTY TO
WE LOVE THE ART OF RECOVER A DEBT OWED BY THE
HELPING PEOPLE. REAL OWNER OF THE PROPERTY. THE
ESTATE IS A FUN AND NOTICE IS MAILED TO PARTIES
FULFILLING WAY TO DO JUST AFFECTED BY THE SALE OF A
THAT. PLEASE LET US KNOW PROPERTY, ADVERTISED IN LOCAL
IF WE CAN EVER DO PUBLICATIONS AND RECORDED IN
PUBLIC RECORDS. AMONG OTHER
ANYTHING FOR YOU OR JUST
INFORMATION, IT PROVIDES THE
GIVE FRIENDLY ADVICE!
Happy P OS TP ON E M ENT
Valentine AN ANNOUNCEMENT -- USUALLY
s Day
MADE AT THE TIME AND PLACE OF
THE ORIGINALLY SCHEDULED
FORECLOSURE SALE -- THAT
ESTABLISHES A NEW DATE AND
2011 TIME FOR THE SALE.