What are foreclosures?

When a loan or mortgage on a property has become past due, a foreclosure is the means by which a bank or other lender can reclaim the property from the borrower. Normally when a person borrows money to purchase physical property like a house, car or boat, the person agrees with the lender to make timely payments of a specified amount on a certain schedule. Depending upon state law, lenders can initiate foreclosures after one or more missed payments. As an investor or someone looking for a great buy on a home, you can get great deals purchasing foreclosed homes, but you must have patience to work through the whole process.  There is much more paperwork involved and can be time consuming.

What are HUD homes?

The United States Department of Housing and Urban Development, also known by as HUD, is a Cabinet department in the Executive branch of the United States federal government. These homes are similar to foreclosures, but they are government owned loans that have foreclosed vs privately owned loans. These too, need patience when purchasing, but can be really great deals. HUD homes, in most cases, have FHA repairs that are required before closing.