Foreclosure issues have definitely taken center stage in the media since people want to know about housing market state and the economy as well. These days, the sub prime mortgage market has dropped and forced hundreds of homeowners into going to foreclosure. Foreclosures have increased the amount of homes on the market. There are different foreclosure types and each of them have their own peculiarities. Most people are puzzled when it comes to making sense of them. To prevent a foreclosure, a homeowner should educated and understand the process together with the options available to them to defend from negative occurrences that could arise.
A deed in lieu foreclosure is a way to avoid actual foreclosure. The borrower in this kind of foreclosure will agree to hand over the deed of the property to the lender as full payment of all outstanding debt against the home. It is fast and prevents a foreclosure record in your credit history. Another kind is the Judicial Foreclosure when other means of repaying the loan is impossible. The matter will go to court and an officer will sell the property in order to repay the debt. This could be a long process and would often result to lower sales than the home might command otherwise. Nevertheless, one will receive what is left of the proceedings when legals, costs and debt have been paid.
A non-judicial or statutory foreclosure is the same as a judicial foreclosure but the lender without the court’s involvement sells the home. This can only be accomplished if the contract of the loan allows it. The process is faster compared to a judicial proceeding but has similar drawbacks and benefits. With a power of sale, two certain elements should be present.
First, the individual mortgage contract should contain foreclosure through power of sale terms. Second, the state where the property is should allow these kinds of foreclosures. In this foreclosure type, the holder of the mortgage will sell the property without judicial interference and when it is sold, the money will be utilized to pay the mortgage and other liens and the remaining funds are given to the borrower.
A strict foreclosure allows the lender to take possession of the property upon any breach of the mortgage agreement. Only few states allow this type of foreclosure. In this proceeding, the lender proceeds to court and requests for a foreclosure. The judge will provide the borrower a time period to make the loan payments current. If the borrower cannot make the loan payments, the lender will get the property title. In most instances, this type is only available if the value of the home is less than the amount that is owed on the property.
Foreclosure is serious personal and financial matter, which involves as person or a family losing their home. It puts a significant mark on the homeowner that makes it hard to obtain loans in the future. It is very important to consider foreclosure alternatives or consult a lawyer before entering foreclosure proceedings.