Sunday, January 17, 2010

San Fernando Valley - Difference Between REO, Lender Owned, Bank Owned, Distressed, Short Sale

The internet has a lot of useful information when searching for San Fernando Valley homes.  But what I've noticed is the confusion between the terminology that describes the same type of property.

Bank owned, foreclosed, reo, lender-owned, lender foreclosure, bank repo, repossessed home all mean the same thing.  The bank has taken back the property and now owns the home. 

Short sale, distressed home, pre-foreclosure, short pay all mean the owner is not paying their mortgage payment and owes more than the home is worth.  Short sale homes usually have more than one lender on title.

In a normal market, if the owner stopped paying their mortgage payment, the lender would usually foreclosure between the 6th to 8th months.  In this current market, it can take 12-18 months to foreclosure on a home.  Keep in mind lenders usually postpone the foreclosure date because either the home is listed with an agent who is trying to sell it, or the owner is trying to modify their home loan.

If you are considering purchasing a short sale or bank owned home in the San Fernando Valley, it's important you are working with a certified agent who specializes in these kinds of homes.

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