Because of the collapse of the real estate market, the word "foreclosure" has become a regular part of the English language. This article will provide information about different 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 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 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.
The "non - judicial" foreclosure process involves the sale of the property by the mortgage holder without court supervision. This process is generally much faster and cheaper than foreclosure by a court ordered judicial sale and unless stopped voluntarily by agreement between the borrower and lender, by bankruptcy stay or court a ordered stay, can take less than six months.
A" non - judicial" foreclosure culminates in a trustee's sale. At the trustee's sale the real estate will be auctioned to the highest bidder. Should bids not be forthcoming the property will revert to the lender whose loan is in default. If there are bidders, the foreclosing bank can keep the proceeds pay off its loan and any legal costs. 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.
Foreclosure by court action, more commonly known as a "judicial foreclosure," is available in every state and required by some. This involves a lawsuit in which the lender asks for a sale of the real property under the supervision of a court. As with other court proceedings, the constitutional dictates of "due process" permit the borrower to answer the foreclosure lawsuit and raise a variety of legal defenses. At the conclusion of the foreclosure lawsuit a decision is made by the court in favor of either the lender or borrower. Should the lender prevail, the property is sold and like with the more common "non- judicial" foreclosure the proceeds go first to satisfy the foreclosing lender; then other lien holders; and, finally, the mortgagor/borrower if any proceeds are left.
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 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 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.
The "non - judicial" foreclosure process involves the sale of the property by the mortgage holder without court supervision. This process is generally much faster and cheaper than foreclosure by a court ordered judicial sale and unless stopped voluntarily by agreement between the borrower and lender, by bankruptcy stay or court a ordered stay, can take less than six months.
A" non - judicial" foreclosure culminates in a trustee's sale. At the trustee's sale the real estate will be auctioned to the highest bidder. Should bids not be forthcoming the property will revert to the lender whose loan is in default. If there are bidders, the foreclosing bank can keep the proceeds pay off its loan and any legal costs. 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.
Foreclosure by court action, more commonly known as a "judicial foreclosure," is available in every state and required by some. This involves a lawsuit in which the lender asks for a sale of the real property under the supervision of a court. As with other court proceedings, the constitutional dictates of "due process" permit the borrower to answer the foreclosure lawsuit and raise a variety of legal defenses. At the conclusion of the foreclosure lawsuit a decision is made by the court in favor of either the lender or borrower. Should the lender prevail, the property is sold and like with the more common "non- judicial" foreclosure the proceeds go first to satisfy the foreclosing lender; then other lien holders; and, finally, the mortgagor/borrower if any proceeds are left.
More information about foreclosure, its processes and defenses can be found at http://www.palmspringslitigationattorney.com
About the Author:
Looking to find answers to your real estate problems, then visit www.losangelesrealestateattorney.com to get the best advice on real estate and foreclosure .
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