Foreclosure Made Simple - All About Foreclosure

This article outlines what foreclosure is and how it works.  It briefly discusses the process of foreclosure and what happens during this time.  In addition, the different types of foreclosure are discussed.

The very subject of foreclosure is an issue that can make many a homeowner in peril very nervous and uncertain about if they will have their home tomorrow. Therefore, it is wise to know all that you can about foreclosure in order to see what your options are.

Should you suddenly find yourself in the unsettling situation of possibly getting your home taken away from you? No one wants to lose his or her places to live. However, sometimes things happen beyond our control and people find themselves suddenly in the scary position of facing foreclosure.

What is foreclosure all about?

All you need to know about foreclosure is evident with the definition of what the word itself literally means. Foreclosure is the legal process by which a mortgagee or lien holder gets a court-ordered cancellation of a borrower's equitable right of redemption for the property they are in default on and is in debt to the lender for as a rule.

The right of redemption will not be returned at all to the mortgagor until he or she pays off the balance owed in full to the mortgagee or lien holder. This right of redemption for the owner can only be given by courts of equity and this can only happen if the borrower pays the outstanding debt amount that is due upfront.

Foreclosure can take place from lien holders for other issues besides the clear default of the mortgagor. Some of the other issues that they can use foreclosure for is overdue taxes that needs to be paid, contractor's bills that have not been paid, and also overdue assessments or HOA dues.

The foreclosure process that is in connection to residential mortgage loans usually involves a bank or other secured type of creditor that sells or repossesses a piece of immovable property that an owner loses due to default.

This foreclosure occurs when the agreement between a lender and a borrower fails. This agreement is called a mortgage and or deed of trust. Violation of said mortgage agreement happens when the borrower does not properly maintain the payments for the promissory note.

All you need to know about the different kinds of foreclosure

All you need to know about foreclosure includes the different kinds of foreclosure too. The mortgage holder can start foreclosure after reviewing the time specified in the mortgage documents. There are several types of foreclosure in the United States and two of the most prominent of these do include the following. They are:

• Judicial Foreclosure
• Power of Sale Foreclosure

Judicial foreclosure is the common name for foreclosure by judicial sale and it is available nationwide as a rule. The entire sale of the mortgaged property is handled by the court and the money that is attained from the sale goes to pay off the existing mortgage primarily. Then the lien holders and if any money is left over the borrower gets their share.

Power of Sale foreclosure is also a form of foreclosure that is permitted in many states across America. This is especially applicable if the mortgage does have a power of sale clause. Only the mortgage holder handles the sale of the mortgaged property with this type of foreclosure. It does not involve use of the court.

This form of foreclosure is usually a lot faster than judicial foreclosure is. The same method of payment to all parties applies in the procedure of foreclosure by judicial sale.