Foreclosure Process
The number of bank foreclosures has increased significantly for some years now. The sale prices are often below the market average. Banks, which are customers of the most important debts recovery companies have organized thousands of auctions for the sale of foreclosures coming from people unable to pay their mortgage.
Since the beginning of every year, there are almost a thousand cases of this type. In this phase, the mortgage files have passed the filter of the debts and bank collectors’ negotiations and naturally, have entered foreclosure, because the mortgage is enforceable title, the chief of one of the most important companies specialized in debt recovery.
The sale price of these properties is often less than the average of the market and the actual sales system leaves room for fraud. The number of auctions is increasing compared to the previous year. The number of foreclosures for sale is obviously growing, because it is faithfully observed the average of proportionality arising from the increasing number and value of annual lending by reporting them directly to the arrears’ number.
We can offer an example, to explain the evolution of foreclosures. Overall, in 2007, there were 1,900 cases and in 2008, people expected approximately 3,000 foreclosures cases for contracts involving values of minimum 100-150,000 dollars. Therefore, foreclosures follow the snowball principle, unfortunately.
In a context in which for 2008, specialized companies expected a total number of foreclosures exceeding 7,000 cases, at an average value of 100,000 dollars per household, we can talk about total sales of 700 million dollars, according to a general calculation. The organizing procedure of the auctions when a building is foreclosed is regulated by the Code of Civil Procedure of the country.
In fact, the executor runs an auction when he announces publicly what the features of the foreclosed property are, they show the value of the debt, indicate the debtor executed and invites potential purchasers to participate in the auction. If at the first auction nobody offers anything, the executor will reduce the price until the demand meets the offer.
People whose debts are very significant in general do not have to face foreclosure for different reasons. In general, large amounts rarely get to the foreclosure phase, because they are generally borrowed by important customers of the bank and experts are willing to look for any solution in order to help them, finding compromise solutions. There are bank managers who prefer not to come to foreclosure for various reasons related to their public image.
The total share in the case of mortgage guarantees is 70% real estate in the area of credits secured by mortgage loans granted to individuals and 30% immovable property belonging to legal persons. Nearly half of the people who have turned to banking services have recorded debts during the last four years. The number of debtors has amounted to two million of the 4.8 million customers registered in the Credit Bureau of a state. In general, to enter into the Credit Bureau, the client must be registered with banking debts unpaid for 30 days.
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