Hardly a day goes by without more bad news about mortgage woes across the country. Bright spots seem nonexistent in this dark cloud—except possibly for one. Some consumers looking to buy a home are wondering: Could I find a good deal on a foreclosed house?

Good deals may exist, although that depends on the locale, the quality of the foreclosed property, and the willingness of the owner or lender to negotiate.

You can buy a foreclosed house in four ways:
1. Through a foreclosure sale
2. At a foreclosure auction
3. From a lender who has taken back the property
4. From the U.S. Department of Housing and Urban Development (HUD)

Generally speaking, the first two methods in this list are best left to highly experienced property buyers. You must be familiar with your state's foreclosure laws, your rights as a buyer, and how the foreclosure process works. Mortgage foreclosure laws and procedures vary by state.

The last two processes above are the least risky for buyers. You can buy a foreclosed house from a lender who has taken back the property. That means the property didn't sell at the foreclosure auction, and the lender took it back to sell it through its "real estate owned" department. With these properties, known as REOs, the lender usually has paid off taxes or liens owed on the property, and handled any necessary evictions. As a buyer you get to inspect the property. Thus, you avoid the nasty surprises that can spring up with preforeclosure sales or foreclosure auctions.

Your ability to negotiate a discounted price will depend on the lender's situation. A lender who has begun to accumulate foreclosed houses is more likely to want to lower the sales price.

With HUD foreclosures, HUD sells homes to the public after Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) mortgage foreclosures. Check with your local HUD office to find out about sales procedures, or go to www.hud.gov.

UCU can help you during these unsure times. For questions regarding Home Loans, speak to Marc Sinibaldi, AVP of Real Estate Lending, by calling 617-739-7447, Ext. 246.