As a result of the recent collapse of the real estate market, the word "foreclosure" has unfortunately become an often used word in the English language. This article contains information about types of foreclosures and how the process works.
As we know it today, foreclosure is the process by which a homeowner will lose his or her home to their lender. Just like the repossession of a car or furniture when the borrower does not pay, foreclosure allows the real property lender to take back the property if the homeowner falls behind on his or her payments.
The lender can do this because as part of its agreement to loan money to the homeowner it was is given a voluntary lien by the homeowner which the bank can enforce should the borrower not pay as agreed.
The most common form of foreclosure in the United States is known as a "non - judicial" foreclosure under the provisions of the power of sale clause contained in a mortgage or deed of trust. This method has become the most frequent type of foreclosure proceeding because unlike a "judicial" foreclosure no court action or judicial proceeding is required. In California, for example, virtually every foreclosure is a "non - judicial" foreclosure because it takes very little time and money to take back the property from the borrower.
A "non - judicial" foreclosure process involves the sale by the mortgage holder without court supervision. This process is fastest and cheapest way for the lender to terminate the rights of the homeowner and in some states can take less than six months.
The " non - judicial" foreclosure has a variety of steps that culminate in a trustee's sale. At the trustee's sale the property will be auctioned to the highest bidder. Should bids not be forthcoming the property will revert back to the lender whose loan is in default. If there are bidders, the foreclosing lender can keep the proceeds to pay off its mortgage and any legal costs. Any amounts in excess of the lender's loan will be used to pay off junior or subordinate liens. Should there be 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.
More information about foreclosure, its processes and defenses can be found at http://www.palmspringslitigationattorney.com
As we know it today, foreclosure is the process by which a homeowner will lose his or her home to their lender. Just like the repossession of a car or furniture when the borrower does not pay, foreclosure allows the real property lender to take back the property if the homeowner falls behind on his or her payments.
The lender can do this because as part of its agreement to loan money to the homeowner it was is given a voluntary lien by the homeowner which the bank can enforce should the borrower not pay as agreed.
The most common form of foreclosure in the United States is known as a "non - judicial" foreclosure under the provisions of the power of sale clause contained in a mortgage or deed of trust. This method has become the most frequent type of foreclosure proceeding because unlike a "judicial" foreclosure no court action or judicial proceeding is required. In California, for example, virtually every foreclosure is a "non - judicial" foreclosure because it takes very little time and money to take back the property from the borrower.
A "non - judicial" foreclosure process involves the sale by the mortgage holder without court supervision. This process is fastest and cheapest way for the lender to terminate the rights of the homeowner and in some states can take less than six months.
The " non - judicial" foreclosure has a variety of steps that culminate in a trustee's sale. At the trustee's sale the property will be auctioned to the highest bidder. Should bids not be forthcoming the property will revert back to the lender whose loan is in default. If there are bidders, the foreclosing lender can keep the proceeds to pay off its mortgage and any legal costs. Any amounts in excess of the lender's loan will be used to pay off junior or subordinate liens. Should there be 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.
More information about foreclosure, its processes and defenses can be found at http://www.palmspringslitigationattorney.com
About the Author:
Want to find out more about foreclosure. Visit attorney Mitchell Sussman's web site where you can find out all about real estate foreclosure and how to deal with it.
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