It is not only private banks and lender who foreclose on homes. The Government has the same problems. The US Department of Housing and Urban Development or HUD and the US Department of Veteran Affairs or VA are in the same boat as other lenders. In fact these two sources are the leading source of properties in government foreclosure auctions.
A FHA insured mortgage loans that are defaulted upon means the HUD has a huge amount of foreclosure properties in their inventory. and the same applies to VA guaranteed mortgage loans. Only VA guaranteed mortgage loan properties come into the inventor of the VA. Both these sources of properties have to be sold at government foreclosure auctions.
It is possible for investors to purchase these properties at auction, live in them, fix them and on-sell at a profit, or rent them out as investment properties. These properties are available at auction or post-auction through real estate agents who have been specifically chosen to specialize in foreclosed homes owned by the government.
There are a whole host of government departments who offer investors the opportunity to either attend government foreclosure auctions or purchase already foreclosed homes, these include:
FDIC (Federal Deposit Insurance Corporation)
IRS (Internal Revenue Service)
GSA (U.S. General Services Administration)
SBA (Small Business Administration)
Fannie Mae
Freddie Mac
U.S. Army Engineers Corps
County taxation departments
US Customs
Sheriff offices and many others
Just looking at this list is enough to boggle the mind. So you ask yourself, where do I find these? The answer is really pretty easy. Many online listing services will tell you exactly where to find government foreclosure auctions and foreclosed properties. In fact listing services often focus entirely on Government foreclosure auction sales.
Freddie Mac and Fannie Mae offer insurance to banks and lenders so that people are able to make low down payments and enjoy lower interest rates than the private sector. If people are unable to meet their mortgage demands, the bank or lender forecloses on the property. These lenders then revert to Freddie Mac and Fannie Mae to collect payment from the insurance that was extended on issue of the mortgage. Thereafter these properties become owned by the government. The government has to sell these properties to recover losses and this is conducted at government foreclosure auctions or by other means.
The government agency that owns the property authorizes an organization to place these properties on sale by auction and you become the owner if you offer is accepted. The most popular sales are HUD sales. HUD pays around 6% to the agents they use to sell their properties and this amount is added to your bid price.
Information regarding government foreclosure auctions is public information. There is nothing reserved about it as there sometimes tends to be with bank foreclosures. The information is publicly available from all these government agencies and you are able to request it under the Freedom of Information Act.
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