If you're looking to save money on purchasing a house, foreclosures are a great way to go. However, even if you find the property for free (which you can do on USHUD.com) there are still very costly mistakes that most people make when buying a foreclosure.
Read more: 5 Costly Mistakes When Buying Government Foreclosures
REO stands for "Real Estate Owned" and is the term that the mortgage holder uses to identify homes that they have foreclosed on and they are holding in their inventory.
Before a house is foreclosed on, vacated and becomes a REO listing it is considered a pre-foreclosure. Pre-Foreclosures are historically bad investments for a number of different reasons:
HUD homes, once the most numerous foreclosure homes on the market, were reduced in the past several years with the sky rocketing popularity of sub prime mortgages.
As sub prime mortgages provided even lower down payments or in many cases no down payments the homebuyer that would have utilized an FHA mortgage moved to a sub prime mortgage. This has greatly reduced the amount
It is not the desire of HUD to own homes. That is the last thing that HUD wishes to do. They inherit homes from lenders that provided their homebuyers with government insured mortgages and left the scene of the crime when the mortgage was not paid by the home buyer. In order for HUD to dispose of the negative asset they are forced to try and sell it on the open market.
Well the Nehemiah and Ameridream programs were dangerous for all of us. By allowing home buyers to finance a home without a down payment, these two programs did a lot of damage to the real estate market.
Like so many good ideas, these were bad ideas masquerading as a
