When a piece of property enters into the foreclosure process, there can be several different types of companies involved. Some of these companies are lenders who hold the mortgages on the property, other companies have differnt roles in the foreclosure process. Below is a list of ten different types of companies that might be involved in a foreclosure process and the part they would play.
- Mortgage Companies. These are financial lenders who specialize in lending funds for real estate transactions. Most home mortgages are held with this type of company. Often times these mortgage companies are affiliated with a banking institution, but not always.
- REO. Real Estate Owned, is what REO stands for in the area of foreclosure. An REO company is a company that owns the title to a piece of property after a foreclosure sale where there were either no bidders or no bidders willing to meet the minimum bid. Often times, the REO company and the mortgage holder are one and the same.
- Banks. Not all mortgages are held by mortgage companies. Many times the company filing the foreclosure action is a local bank. It is becoming less frequent for banks to finance and hold individual mortgages, but it is still done.
- HUD. If the mortgage was an FHA insured mortgage, then the Department of Housing and Urban Development may become involved in the foreclosure process and take it over from the lending institution.
- Real Estate Appraisers. Prior to the foreclosure auction, the property will need to be appraised. Real estate appraisers may be hired to provide this service for the foreclosure.
- Real Estate Brokers. Another means of appraising the value of the property is to get a BPO, a Broker’s Price Opinion. This is a price appraisal as well, but it is received from a real estate broker rather than an appraisal company.
- Mortgage Insurance. If there was a mortgage insurance policy in place for the loan that is being foreclosed on, then the mortgage insurance company will also be involved. The lender will be filing a claim with the mortgage insurance carrier regarding the default on the loan.
- Real Estate Investors. Companies that specialize in real estate investment will often be involved in bidding on foreclosed properties during the foreclosure auction. These companies generally have the capital necessary to make cash purchases. If they win the bid, they will then attempt to re-sell the property at a profit.
- Process server. In most incidents, mortgage foreclosure papers are served by a sheriff’s deputy, but not always. Many times, law enforcement agencies do not have the personnel available to meet all the needs of the court in regard to legal service of documents. In this case, a process server will be hired to serve the papers on the homeowner.
- Real Estate Attorneys. A lending institution will often hire an attorney to handle the foreclosure auction and the other legal matters involved with the process. The attorney becomes the legal representative for the lender during the bidding process also. Occasionally, the homeowner may also consult with an real estate attorney regarding their rights and how to handle the foreclosure process properly.
Regardless of the various types of companies involved in a foreclosure, the primary two parties are the lender and the mortgagee. They are the ones with the contractual agreement that has broken. The others are simply involved on the sidelines.
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