John

Disclaimer

None of the information on this site should be construed as legal advice. You should always consult an attorney for advice about your specific foreclosure situation.

How Wikapedia.org explains foreclosure…

Foreclosure is the legal process by which a mortgagee, or other lien holder, usually a lender, obtains a court ordered termination of a mortgagor’s equitable right of redemption.[clarification needed] Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt. While this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. Other lien holders can also foreclose the owner’s right of redemption for other debts, such as for overdue taxes, unpaid contractors’ bills or overdue homeowners’ association dues or assessments.

The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust”. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that “the lender has foreclosed its mortgage or lien”. If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgment.

Judicial Foreclosure is the process used when the loan documents do not include a power of sale clause. The lender must sue in court to obtain a court order to foreclose.

Non-judicial foreclosure is the process employed when the loan documents do include a power of sale clause that authorizes the lender to sell the property to recover the loan balance in the event of the borrowers’ default. If the power of sale clause defines the time, place, and terms of sale, then that procedure must be followed. If not, the procedure is as follows:

1. Before beginning the foreclosure process the lender must mail a letter of demand to the borrower for payment the delinquent amount within 20 days.

2. If the borrower fails to pay after the 20 day period has expired, and at least 21 days before the scheduled sale date, the lender must record a notice of sale with the county clerk, post the notice on the courthouse door, and mail s copy to the borrowers at their last known address.

3. After the proper preliminary notices have been giving, the sale will be a public auction held on the courthouse steps, and will be held on the first Tuesday of any month, even if that Tuesday is a legal holiday. The lender may bid by canceling all or part of the outstanding loan balance, and in the absence of any higher bids, take title to the property.

4. The lender may obtain a deficiency judgment, limited to the difference between the sale amount and/or fair market value and the outstanding loan balance.