When you’re investing into real estate, there are a large number of loans you can apply for. The type of loan you get will depend on your situation, and your needs. Foreclosure loans, are loans used to purchase foreclosure properties. These types of deals can  be extremely profitable – which is something Delancey Street recognizes. We understand the foreclosure process, and more importantly – understand how profitable they can be – which is why we offer foreclosure loans to qualified candidates. We understand a foreclosure is a process, and not simply a single event. We are your partner, and will work with you through the process. Should you decide to buy a foreclosure and then fix+flip it, we can work with you.

Here’s how the foreclosure loan process works:

-Borrower is behind on house payments, and is given a demand letter. Borrowers will get a notice they are not complying with the terms of their loan agreement.

-Redemption period begins, in which the borrower has a chance to pay off the loan in a period of time. If the period comes to an end, and there’s no settlement, a notice of sale is posted. It’s done in a newspaper, or some other publication. The date and time of the sale is mentioned.

-The property will go to the highest bidder, typically the bank. The bank will bid up to the price the borrower needs to get out of the property, which is known as a credit bid. This means the bank doesn’t bring any additional money to the sale – because the price they bid, is the amount they gave to the borrower. The credit bid is an amount which is credited against the total amount the borrower owes the bank already. In most cases, the bank bids what’s already owed – which is usually more than what the property is worth.

-If there’s no other person bidding, then the bank will own the property at the end of the sale.

-Banks want to unload these foreclosed properties as soon as possible. The money tied up in these properties is money they could be lending elsewhere. Banks are eager to get these properties sold ASAP – which means you have an opportunity to purchase the property for a deal.