With the collapse of the real estate market, the word "foreclosure" has unfortunately become an often used word in the English language. This article will provide information about the types of foreclosures found in various states and how they work.
Foreclosure is the legal process by which a real property security holder recovers the real property that secures its loan. Much like an auto repossession when the borrower does not pay, foreclosure allows the real property lender to take back the property.
The bank that made the loan to you for your house can do this because as part of its agreement to loan money to the borrower, the lender is granted a lien by the homeowner which the bank can enforce should the homeowner refuse or be unable to pay.
The most often used form of foreclosure is known as a "non - judicial" foreclosure. This form of foreclosure is pursuant to the provisions of the power of sale clause contained in a mortgage or deed of trust. It has become the most popular type of foreclosure because unlike a "judicial" foreclosure no judicial proceeding is required. In California, virtually all foreclosures are of the "non - judicial" variety because it takes little time and money to take back the property.
As mentioned above, a "non - judicial" foreclosure process involves the sale of the property without court supervision. It is faster and cheaper than foreclosure by court order and unless stopped voluntarily by agreement, bankruptcy stay or court a ordered stay, can take less than six months.
Non - judicial" foreclosure proceedings have a variety of steps that culminate in what is known as a trustee's sale. At the trustee's sale the property is sold to the highest bidder. Should no bids be forthcoming the property reverts back to the lender. If there are bidders, the bank can keep the proceeds to pay off its loan and any legal costs. Amounts in excess will be used to pay off junior or subordinate liens. In the unlikely event that there is a balance after the payment of all liens it will be paid over to the borrower.
"Judicial foreclosure," is available in every state and required by some. This involves a lawsuit in which the bank asks for a sale of the real property under the supervision of a court. As with other court actions, "due process" permits the borrower to answer the suit and raise legal defenses. Ultimately a decision is made by the court in favor of either the lender or borrower. Should the lender prevail, the property is sold with the proceeds going to satisfy the foreclosing lender; other lien holders; and, finally, if there are any proceeds left, the homeowner.
Additional information about foreclosure can be found by consulting a real estate attorney in your area or logging on to the website of attorney Mitchell Reed Sussman at http://www.palmspringslitigationattorney.com
Foreclosure is the legal process by which a real property security holder recovers the real property that secures its loan. Much like an auto repossession when the borrower does not pay, foreclosure allows the real property lender to take back the property.
The bank that made the loan to you for your house can do this because as part of its agreement to loan money to the borrower, the lender is granted a lien by the homeowner which the bank can enforce should the homeowner refuse or be unable to pay.
The most often used form of foreclosure is known as a "non - judicial" foreclosure. This form of foreclosure is pursuant to the provisions of the power of sale clause contained in a mortgage or deed of trust. It has become the most popular type of foreclosure because unlike a "judicial" foreclosure no judicial proceeding is required. In California, virtually all foreclosures are of the "non - judicial" variety because it takes little time and money to take back the property.
As mentioned above, a "non - judicial" foreclosure process involves the sale of the property without court supervision. It is faster and cheaper than foreclosure by court order and unless stopped voluntarily by agreement, bankruptcy stay or court a ordered stay, can take less than six months.
Non - judicial" foreclosure proceedings have a variety of steps that culminate in what is known as a trustee's sale. At the trustee's sale the property is sold to the highest bidder. Should no bids be forthcoming the property reverts back to the lender. If there are bidders, the bank can keep the proceeds to pay off its loan and any legal costs. Amounts in excess will be used to pay off junior or subordinate liens. In the unlikely event that there is a balance after the payment of all liens it will be paid over to the borrower.
"Judicial foreclosure," is available in every state and required by some. This involves a lawsuit in which the bank asks for a sale of the real property under the supervision of a court. As with other court actions, "due process" permits the borrower to answer the suit and raise legal defenses. Ultimately a decision is made by the court in favor of either the lender or borrower. Should the lender prevail, the property is sold with the proceeds going to satisfy the foreclosing lender; other lien holders; and, finally, if there are any proceeds left, the homeowner.
Additional information about foreclosure can be found by consulting a real estate attorney in your area or logging on to the website of attorney Mitchell Reed Sussman at http://www.palmspringslitigationattorney.com
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Learn more about foreclosure by stopping by attorney Mitchell Sussman's site where you can find out all about real estate foreclosure and how to deal with it.
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