Foreclosure Facts to use Everyday
Foreclosure is the legal process of taking possession of a mortgaged property as a result of the mortgage holders failure to maintain mortgage payments. The mortgage holder can often initiate foreclosure at a specified time that was predetermined in the mortgage documents. It is typically possible to initiate foreclosure after a time period when a condition of default has occurred. Foreclosure is rarely a voluntary process. Sellers stop making payments for a variety of often unpredictable reasons including recent loss of a job, excessive debt or other billing obligations, divorce, and job transfer.
There are two main types of foreclosure: foreclosure by judicial sale and foreclosure by power of sale. Foreclosure by judicial sale, often known as judicial foreclosure is available in every state and is a required process by many. It involves the sale of a mortgaged property while under the supervision of a court. The proceeds from the sale first compensate the mortgage, then other creditors, and finally the borrower if there are any remaining proceeds. Under this system, the foreclosure is initiated by the lender when after a period of default; a lawsuit is filed against the borrower. A short hearing occurs where an exchange of pleas takes place and a judicial decision is later announced. Foreclosure by power of sale, commonly known as nonjudicial foreclosure is legal in many states if a power of sale clause is present in the mortgage. This process allows the mortgage holder to sell the property directly and without court supervision. In general, this process is much faster and cheaper than a foreclosure by judicial sale. Similarly, the proceeds are first used to satisfy the mortgage.
Nearly every state allows the mortgagor some period of redemption. This means that during a certain length of time they have an irrevocable right to pay back the default. This includes the payment of all foreclosure costs, back interest, and missed principal payments. If these costs are repaid, the mortgagor can regain control of the property. Although this is legally possible, it is a rare occurrence, as the original default is often a sign of economic instability.
A vast majority of mortgages contain acceleration clauses. Acceleration is used to determine how much money is owed due to foreclosure. If any term of the mortgage has been broken, including the missing of a monthly payment, acceleration allows the mortgage holder to declare the entire debt of the defaulted mortgage due and payable. Without the acceleration clause the mortgage holder is forced to either wait until all the payments are due, or try and convince a court to require partial sale of the property to redeem the missed payments.
Looking for an expert on Foreclosure Lawrence, KS?? Visit Johnhoogelawoffice.com, you can get help when it comes to any kind of foreclosure.
Processing your request, Please wait....
