Foreclosure Process Lawyers
What is Foreclosure?
Foreclosure occurs when a homeowner or property owner is unable to make payments, or defaults, on a loan that is secured by the home or property. The lending institution can then take possession of the property. The bank can then put it up for sale in order to collect funds for the outstanding mortgage.
What Does the Foreclosure Process Involve?
Foreclosure proceedings usually vary from state to state. In general, before a lending institution can foreclose a home, they must give the homeowner sufficient notice that they are in default on their loan. Then, the lender must provide the property owner with a reasonable amount of time to redeem the property and reclaim ownership.
If payments on the loan are still in default, the lender is then entitled to take the following steps:
- Initiate a judicial foreclosure: This is a lawsuit filed by the bank ordering the property owner to sell the real estate.This option is available in all states.
- Initiate a non-judicial foreclosure: This allows a third-party to act as trustee. The trustee will foreclose the home and sell it without a formal judicial ruling.
- Sale at public auction: Foreclosed properties are often sold at public auction. If no one bids high enough, then the lender may repurchase the home.
- If there are still residents living in the house, the bank can file an unlawful detainer suit in order to evict any persons still in the house at the time of the auction.
What is the Role of Mortgages in a Foreclosure?
Most people cannot afford to purchase a home or other property in one single payment. Instead, most buyers must take out a loan called a mortgage in order to buy the property. The mortgage creates an obligation to make payments on the house, and it is this obligation that allows a bank to repossess the home if the loan is in default.
Sometimes an acceleration clause is included in the mortgage contract. An acceleration clause allows the bank to collect on the entire loan amount if a borrower has missed payments. Acceleration clauses can increase the chances of foreclosure, since most homeowners cannot afford to pay the entire loan amount upon default.
What Can I Do to Avoid Foreclosure?
The best way to avoid foreclosure is to ensure that your mortgage payments are made regularly and on time. Also, there may be a variety of other protections against foreclosure, such as the right of redemption, which allows a home owner to pay off debts before and sometimes after the foreclosure sale and repossess the home.
Additionally, filing for bankruptcy can temporarily delay foreclosure in some jurisdictions. However, filing for bankruptcy can have serious consequences and may not be appropriate in every situation.
Finally, filing a lawsuit can also prevent or delay foreclosure if there are signs of fraud with regards to the mortgage. Also, if the lending company has failed to provide notice of foreclosure, it may lead to legal penalties.
How Can a Lawyer Help With Foreclosure?
Foreclosure can be a costly and complicated process. You should speak with an attorney regarding your foreclosure situation in order to determine your possible courses of action. A foreclosure lawyer can provide valuable legal information as well as representation in a court of law should a lawsuit become necessary. Contact a lawyer to learn more about your state’s foreclosure laws.
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Last Modified: 01-13-2014 11:09 AM PST
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