In general, foreclosure is a type of legal process in which a person is forced to surrender their home to a lender, so that the lender may re-sell their home. A home is typically foreclosed on when a person fails to make their mortgage payments. After a certain period of time, a lender will be allowed to seize possession of the home and sell it as a means to recover a person’s missed mortgage payments.
There are two ways by which a foreclosure sale may occur. Depending on the laws of a state, foreclosure may either happen through a foreclosure by judicial sale or through a foreclosure by power of sale. However, only about half of the states recognize the latter type of foreclosure sale.
In addition, the property being foreclosed on may be sold for less than half of what the property owner still owes on their remaining mortgage balance. In such a scenario, the court may issue a deficiency judgment against the property owner that will require them to pay the leftover amounts or else face serious legal consequences.
Therefore, if you are experiencing mortgage issues or your home is about to be foreclosed on, you should contact a local foreclosure lawyer as soon as possible. A lawyer will be able to assess your options and can recommend the next steps you should take to either postpone or prevent a foreclosure action from occurring. A lawyer can also make sure that your rights as a borrower are sufficiently protected.
What is Property Tax Foreclosure?
Property tax foreclosure, also known as tax lien foreclosure, refers to a situation that occurs when a property owner fails to pay the requisite taxes. For instance, if a property owner refuses or fails to pay the property taxes owed on a specific piece of real estate, then there is a likelihood that they will face an action for property tax foreclosure.
In general, there are two types of ways that a property tax foreclosure sale can happen: either through a tax lien certificate or a tax deed sale. For example, after a certain amount of missed payments for property taxes, a government agency may issue a tax lien against the property. The tax lien can then either be sold through auction or the lender may initiate a judicial foreclosure against the property owner themselves. The choice will be contingent on the circumstances.
On the other hand, a property tax foreclosure can also be accomplished through a tax deed sale. In a situation where a tax deed sale is used, the property itself will be sold to a bidder. The difference between the two is that with a tax lien the bidder will be buying the interest on a tax lien certificate, whereas a tax deed sale will be a foreclosure sale to own the property itself.
What is a Mortgage Foreclosure?
Mortgage foreclosures are the most common type of foreclosure action. As discussed above, mortgage foreclosures happen when a person defaults on their mortgage payments. The promissory note and mortgage contract that a person signs when entering into an agreement for a home mortgage loan with a lender will allow the lender to place a lien on the property.
If the person continues to miss mortgage payments after a lien is placed against their property, then the lender will legally be allowed to seize their property and resell it to recoup the mortgage payments.
Whether a property owner will be able to reclaim a property that has been foreclosed on will depend on the facts of an individual case and on the laws of the jurisdiction in which the property is located.
Do Both Types of Foreclosures Affect The Lien on My Property?
A lien is a specific claim against a particular piece of property. Thus, only the lien holder will be allowed to petition the court for money that they are owed. Therefore, if a property owner has both types of liens on their property, then the answer to this question is both types of foreclosures will affect the lien on a property; just in different ways.
Regardless, either the county where the property is located or the mortgage lender will be allowed to foreclose on the property if one or both parties place a lien against it.
How Does the Foreclosure Process Proceed?
As previously mentioned, the foreclosure process will depend on the laws of the jurisdiction where a property sits as well as the type of foreclosure action being sought. For example, if a foreclosure sale is occurring due to a person’s failure to pay property taxes, then the resulting process will be contingent on whether a tax lien foreclosure or a tax deed sale is being sought.
On the other hand, if a property is being foreclosed on due to a person’s failure to make mortgage payments, then it will depend on the foreclosure laws of the state and whether it is a judicial or non-judicial foreclosure action.
In the instance of a judicial foreclosure action, the lender will need to file a claim in the appropriate court and obtain a foreclosure judgment. In contrast, if it is a non-judicial foreclosure sale, then the parties do not need a court to intervene at all and the lender can simply notify the general public and hold a foreclosure sale.
Can a Mortgage or Property Tax Foreclosure Be Stopped in the Same Way?
In some instances, mortgage and property tax foreclosures can be stopped or delayed in the same manner. One way that may affect both types of actions is if the property owner files for and declares Chapter 13 bankruptcy. In general, declaring bankruptcy will aid in delaying the foreclosure proceedings, which may allow the property owner to repay the lender over an extended period of time.
Unlike a property tax foreclosure, however, a mortgage foreclosure can be stopped or delayed by modifying the mortgage loan agreement or by making a short sale. On the other hand, a property tax foreclosure can be prevented or stopped by entering into an agreement with the county to pay off the overdue balance of property taxes on the property.
Should I Talk to a Lawyer about Either Foreclosure?
The foreclosure process can often be an emotional and stressful experience, regardless of the type of foreclosure action being sought. Therefore, if your home or other property is about to be foreclosed upon by a lender, then it may be in your best interest to contact a local foreclosure lawyer as soon as possible.
Generally speaking, the earlier in the foreclosure process that you retain legal representation, the more likely your chances are of avoiding a complete foreclosure sale. An experienced foreclosure lawyer will be able to evaluate your options and can provide legal advice about the matter. Your lawyer can also make sure that your rights as a borrower are adequately protected throughout the entire foreclosure process.
In addition, your lawyer will be able to negotiate with a mortgage lender on your behalf to find out if there are any other actions that you can take to prevent your home from being involved in a foreclosure sale. Your lawyer can also assist you in filing the necessary legal documents that could help to delay the foreclosure process as well as can provide representation in court should any disputes arise.
Finally, if it seems there is no way to stop the foreclosure sale from happening, your lawyer can also provide guidance on whether or not there will be an opportunity for you to buy back your house before, during, or after the foreclosure sale.