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QUIZ: Foreclosure

 Before you jump into the hot foreclosure market, test your knowledge to make sure you’re not getting in over your head. Our interactive quiz clears up popular misconceptions and helps you gain a more complete understanding of foreclosure — including how to help home owners avoid it.

1.As a general rule, foreclosed homes sell for less than their market value.

2. In most states, if you bid on a foreclosed property at an auction, you also may be bidding on tax liens and other debt accrued by the prior home owners.

3.The housing boom masked the high number of home owners who’ve struggled with paying their subprime loans — and these home owners may now be at high risk of foreclosure.

4.Home owners who always pay their mortgage on time don’t need to worry about foreclosed homes in their neighborhood.

5.Home owners can sidestep foreclosure by transferring the title of their home to a foreclosure rescue company for a year or two.

6 .Any buyer can purchase a HUD home (a home that’s in possession of the U.S. Department of Housing and Urban Development), as long as he or she has the money or can qualify for the necessary amount of mortgage financing.

7 .Reading the public notices at your local county courthouse — including bankruptcy claims and death certificates — is not an effective method of locating foreclosed properties.

8 .Once home owners default on three mortgage payments, the home automatically goes into foreclosure.

9 .In many states, owners of foreclosed homes can reclaim their property — even after someone else has already bought it — by paying off the loan along with any interest, taxes, and penalties.

10.Lenders stand to benefit when home owners default on their mortgage.

11.Once a bank takes possession of a foreclosed home, the previous owner is free of all financial obligations.