House Foreclosures – The Process Simply Explained
House foreclosures occur when a bank or mortgage company takes action to repossess title of the property from a borrower who is behind in their mortgage repayments. Once this happens and a borrower defaults on the loan, the lender can start foreclosure proceedings.
Depending on which US state you live in, the foreclosure will either be done through the courts (judicial foreclosure) or out of court (nonjudicial foreclosure).
If it’s a judicial foreclosure, a court order is obtained with the court determining an upset price – no bids under this will be accepted. The property is then advertised as a foreclosure sale and will be publicly auctioned under court supervision and sold to the highest bidder. as long as that bid is above the price the court has set
For a non-judicial foreclosure, it’s usually a quicker process. The power of sale clause in the deed trust means the foreclosure can be settled without going through the court system. Instead of a court order, the lender is the one who takes action and sends a letter of demand for the outstanding payment to the borrower If the loan contract has an “acceleration clause” this permits the lender to demand full payment of the entire balance of the loan – principal and interest – once the borrower defaults on the loan.
If no arrangements are worked out with the lender, foreclosure proceedings will be set in motion. The lender will file a foreclosure notice with the county clerk, and then the foreclosure sale is advertised in the local papers with details of the date of the public auction. The timing of this varies from state to state depending on the foreclosure laws of the particular state. The house is then sold at the public auction to the highest bidder.
If you’re looking to make the most of the bargain foreclosure opportunities available at the moment, make it easy for yourself and save time by using a foreclosure listing site. Foreclosure.com is a listing site that offers up-to-date and accurate information on properties in the various stages of foreclosure. It’s a one-stop resource and the one we recommend for our readers. Go here now to find a foreclosure.
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