Bank Repossession is connected with the judicial process of foreclosure. Today foreclosures are raging across USA and the word ‘foreclosure’ is making the rounds in all the media coverage. But foreclosures have always been part of the mortgage business. It is the abnormal spike in numbers in the recent two years in USA that has grabbed the attention. By foreclosure today it is generally meant all the different stages of foreclosure that culminate in Bank Repossession.
First the borrower defaults in making monthly payments towards the mortgage. When that exceeds a specified period, usually 90 days, the borrower is said to be delinquent. The lender then seeks the permission of the court to foreclose or close the mortgage ahead of time to realize pending dues. Accordingly the borrower is notified. This period gives the borrower time to mend fences and come to some agreement with the lender but if that fails then an auction is held in the court premises. If a suitable buyer fails to show up then the bank takes over the property. This is the stage of Bank Repossession.
Today the number of foreclosures by state is on the rise because the borrowers are unable to meet rising interest rates. Most of those ending up in foreclosure and Bank Repossession emanate from sub-prime ARM mortgages. These were given practically to anybody with a pulse without checking on income source and affordability of the borrowers. The number of Bank Repossession show that mostly they are the houses that were owned by senior citizens or minority groups that were not conversant with English, leave alone the intricacies of the financial world.
Thus Bank Repossession is the result of irresponsible behaviour of both the banks (in most cases the lenders) and the borrowers. The court auction, sale by owner or short sales are failing despite many preventive measures taken by the governments at state and federal levels together with the local communities. With millions running into foreclosure the rise in Bank Repossession properties show that lenders have eaten more than they could digest. A massive cash crunch followed. Bank Repossession took place but the banks could not manage so many properties. These fell vacant. The Bank Repossession houses falling vacant began to attract crime and health related problems with overgrown gardens and stagnant pools. Bank Repossession units brought down the price of neighbouring houses as the atmosphere of the locality suffered and also because the lenders began to give heavy discounts for Bank Repossed properties.