There are 3 types of foreclosures. They are: judicial foreclosure; Non-judicial foreclosure and strict foreclosure. I’ll describe the three, but the rules can vary greatly from state to state. If you are faced with a foreclosure, you should contact someone at a titled company or an attorney to find out the rules governing foreclosure in your state.
A judicial foreclosure is the type of foreclosure that involves the judicial system and a judge. Hence the word judicial is used. This type of foreclosure requires the lender to sue you and take you to court. The judge needs to hear from both you and your lender. Then he has to decide if you should keep your home or if the lender should take it over to repay the lender the money you borrowed from them to buy your home. The lender files a lawsuit or complaint in court and records a Lis Pendis to foreclose you from you.
At the beginning of the proceedings, you will be served a complaint by the court and you will then have the opportunity to appear in court to challenge the foreclosure action.
This foreclosure method is usually used when you used a mortgage to purchase the property. In some federal states, this is required by law. In some other federal states this is an option. Foreclosure on your home can take much longer if the lender is required to use this method than if the lender can use the non-judicial foreclosure method.
Out of court foreclosure
Out of court foreclosure is the fastest and most common type of foreclosure. In states that allow this type of foreclosure, your lender doesn’t have to sue you and take you to court. If you are late with your payments, the lender can simply ask you to pay your current loan or they can take your home by auctioning your home in the courthouse. This type of mortgage loan is a trust deed and promissory note to secure the property. If you have a power of attorney clause on your loan records for your home purchase, out-of-court foreclosure can also be used.
If your lender initiates an out-of-court foreclosure against you, your loan file will explain the procedure to you. If you find this confusing, it is worth speaking to someone at a title company or consulting a lawyer to make sure you understand both your rights and the rights of your lender.
Typically, you will receive a standard notice from the lender. If you fail to resolve the default (usually unpaid payments) within a certain period of time, the house can be auctioned off immediately.
It’s important to know that every state has different out-of-court foreclosure procedures. Some states only allow judicial or non-judicial foreclosures. Some states allow the use of both.
The final and least used type of loan foreclosure is known as strict foreclosure see this complete guide on Colorado foreclosure process. Strict foreclosure can only be used in a few states and is usually only used when you owe more than your home is worth.
With this type of foreclosure, if you default on your loan, the lender will file a lawsuit and give you a specified amount of time to fix the default. Your property will be returned to the lender if you do not correct the failure within the allotted time.
Historically, strict foreclosure was the first type of foreclosure to be used.
If you are facing a foreclosure, you should seek expert advice on your right to keep your home. An attorney is the best way to find out how your county and state are handling foreclosures.
You can ask your lender about other ways to solve your problem and keep your home
In today’s economy, most lenders have had to take back too many homes through foreclosure. They lose a lot of money with each foreclosure and end up with empty houses that are too difficult for them to sell and get the money borrowed back.
The lender would rather help you keep your home. You know the economy is very bad. They also know that your solvency may have changed in this economy.