The Process of Foreclosure

Foreclosure process may be fast or may take a long time, depending on State regulations. There are options that have been adopted by home owners in recent times to avoid foreclosure or at least delay the process to allow for financial settling. They include filing for bankruptcy, refinancing, financing through other means, or making amicable arrangements with the mortgagee.

Process of judicial foreclosure
The process is said to be started when the mortgagee moves to a state court to sue a mortgagee for purportedly breaching the initial agreement. Once the final verdict has been passed in favor of the claimant, the way is officially open for the property to be sold by auction through a court appointed official. The official in charge warrants a deed to the tallest bidder, who may even include a bank or another financial institution which may opt to buy the debt.

Process of non judicial foreclosure
The fact that most defaulting mortgagors are broke beyond the ability to acquire the services of an attorney has seen most non judicial foreclosures go ahead smoothly without contest. It is a much faster way to deal with these cases and mortgagees have come up with the idea that this system is friendlier to the borrower in that they won’t have to go through stressful court hearings and costs.

There will be no need for the lender to file any lawsuit in this kind of situation, though some states require that there must be an officially stamped document from the office of the court clerk. However in most states, the only official government personality needed is the county recorder whose work is to record the final deals.

In the power of sale foreclosure, should the borrower fail to correct the default or employ other legal measures like filing for bankruptcy, the lender or relevant representatives perform an auction. The lender can actually make a bid for the property at hand, and has the benefit of being the only bidder who can bid without money.

Whoever wins the final bid automatically becomes the bona fide owner of the property without the disturbance of the immediate former home owner. Pending issues like property taxes remain in the picture and it is in the hands of the new owner (all relevant documents are passed along with the deed). In the event that the former owner fails to vacate the property willingly, legal measures can be adopted like forceful eviction.

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