> Real Estate > Steps in the Foreclosure Process
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.
In the context of real estate law, foreclosure is the legal process by which a real property lender recovers possession of the real property that secures its loan. Much 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.
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.
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.
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, commonly known as a ?judicial foreclosure,? is available in every state and in some states is required. This involves a legal action in which the lender files a lawsuit that asks for a sale of the real property. As with other court actions, constitutional dictates of ?due process? allow a homeowner to answer the lawsuit and present legal defenses. At the conclusion of the case a decision is made 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; then other lien holders; and, finally, the mortgagor/borrower.
More information about foreclosure can be found at http://www.palmspringslitigationattorney.com
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.
Source: http://realnews.galanter.net/2012/08/30/steps-in-the-foreclosure-process/
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