Foreclosure Buyout

AAA

DEFINITION of 'Foreclosure Buyout'

A refinancing program that allows a homeowner to avoid foreclosure on their home. Foreclosure buyouts are typically a refinancing loan which the homeowner obtains to cover the portion of the current mortgage that is in default. Of course, finding a lender that will lend to a borrower that is in the process of being foreclosed on can be difficult and if successful, the loan will usually be accompanied by a high interest rate.

INVESTOPEDIA EXPLAINS 'Foreclosure Buyout'

Foreclosure buyouts skyrocketed in the wake of the 2008 subprime meltdown. Customers who use this service generally are required to have a minimum of 25% equity in the home before a loan is considered. This is to offset the risk to the lender should the borrower default on the foreclosure buyout loan. Foreclosure buyouts can also be referred to as foreclosure bailouts.

RELATED TERMS
  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  3. Delinquent Mortgage

    A mortgage for which the borrower has failed to make payments ...
  4. Involuntary Foreclosure

    When a borrower defaults on a home mortgage loan and the lender ...
  5. Secondary Buyout

    A type of leveraged buyout in which a financial sponsor or private ...
  6. Judicial Foreclosure

    Foreclosure proceedings in which a mortgage lacks the power of ...
Related Articles
  1. Home & Auto

    Foreclosure Opens Doors For Real Estate Investors

    Learn how to spot hot properties that you can turn around for a profit.
  2. Options & Futures

    Short Sell Your Home To Avoid Foreclosure

    Are you in danger of losing your home? Protect your credit score with a real estate short sale.
  3. Personal Finance

    Avoiding Foreclosure Scams

    If you want to save your home, avoid bogus offers and take matters into your own hands.
  4. Home & Auto

    Should You Buy A House At Auction?

    The traditional real estate market isn't the only place to conduct your home search. Auctions also bring many buying opportunities.
  5. Home & Auto

    Foreclose On High Housing Prices

    Foreclosed homes may be financially appealing, but there are many obstacles to consider before buying.
  6. Options & Futures

    Saving Your Home From Foreclosure

    Learn the tactics you can use to prevent your home from being repossessed.
  7. Investing Basics

    Subprime Lending: Helping Hand Or Underhanded?

    These loans can spell disaster for borrowers, but that doesn't mean they should be condemned.
  8. Personal Finance

    The Fuel That Fed The Subprime Meltdown

    Take a look at the factors that caused this market to flare up and burn out.
  9. Stock Analysis

    How Chimera Investment Bear The Brunt Of REITst?

    Following the financial crisis, REITs that specialized in investing in mortgage-backed securities produced huge gains for their shareholders.
  10. Credit & Loans

    Reverse Mortgages: How To Find A Good One

    Finding a reverse mortgage generally means using a lender that specializes in them. Here's how to find a reputable one.

You May Also Like

Hot Definitions
  1. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  2. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  3. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  4. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  5. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  6. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
Trading Center