Foreclosure
is a process by which the lender of a "mortgage" or a "deed of trust". or other
holder of a lien, legally obtains the security from a real estate mortgagor's
(borrower) redemption equity right, either by an order of the court or by other
law procedure (after following the required statutory procedures. Most often a
lender secures a security benefit from a home borrower who pledges or mortgages
an asset (the property) as security for the loan.
If the borrower does not make his payments and the lender attempts to foreclose
on the property, the courts of equity may give the borrower an equitable right
to redeem if the borrower brings the debt current. Although this equitable right
is there, it becomes a cloud upon title of the property and therefore the lender
using the foreclosure process seeks to foreclose on this equitable redemption
right and proceed with both equitable and legal fee simple property title.
After the process is completed, the lender may sell the real property and retain
any proceeds to pay the mortgage plus legal costs, while it is most often stated
that "the lender foreclosed on the mortgage or loan". If the note contained a
recourse clause (non-purchase money) therefore if the sale doesn't bring enough
money to pay off the existing principal balance plus fees the mortgagee (lender)
can institute a suit for a deficiency judgment.
Other types of lien holders are also able to foreclose on the owner's redemption
rights for other debts, like unpaid contractors' bills , past due taxes or past
due homeowners' association assessments or dues. So let's take a look at the
list of articles about foreclosure.
Aug 8, 2011
Feb 18, 2011