ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Understanding The Different Laws On Foreclosure

Updated on March 17, 2016

Foreclosure laws can be somewhat difficult to understand no matter where you are, but, if you are a homeowner or you’re thinking about becoming one, it’s important to know what foreclosure proceedings can bring. There are really two different kinds of foreclosure options that lenders can pursue: judicial foreclosure and power of sale foreclosure. Both of these options are made available to lenders under certain circumstances. Oftentimes the definition of foreclosure is agreed upon in the mortgage documents, and lenders are frequently allowed to pursue foreclosure after one or more payments has been delinquent for at least 30 days.

To understand mortgage law, mortgages themselves have to be explained. When a lender doles out a mortgage, they must do so either with a mortgage or a trust deed to place a lien on the property. Most lenders opt for the trust deed, because it grants them more flexibility with the terms of the mortgage and the potential for foreclosure. In either event, the lien on your property means that the lender will be able to foreclose on you if you default on your loan.

Judicial Foreclosure

If a lender uses a mortgage to help generate the mortgage loan, then their only option for foreclosure is to go through proper judicial channels. A judicial foreclosure requires that the lender file a lawsuit in a state court where the property is located. If the lawsuit goes through, the lender will receive an order from the judge stating that they can now foreclose on the property. The judge will also contact the local sheriff’s office to ask for a local sheriff’s sale of the home.

Power of Sale

With this foreclosure option, lenders do not need to file a lawsuit to foreclose on a property. Instead, they can go to a trustee (a third party—usually a title company, bank, or attorney) who uses the power of sale to foreclose on the property. There are specific and detailed laws about how these foreclosure proceedings must go. The borrower must receive 90 days’ notice from the trustee that they are being foreclosed upon. The borrower must also be given an adequate amount of time to pay back the mortgage or at least ensure that it is current. This is usually a time period of about four months, but every lender and trustee is different. In some instances, foreclosure proceedings can last over a year.

If the borrower does not come up with the money in the allotted amount of time, then the trustee can proceed with auctioning off the property in order to help the lender earn their money. Of course, if you’re being foreclosed on, then it’s important to understand your own rights. You can ask for a payoff statement from the lender, and they will be forced to provide you with one. A payoff statement essentially lets you know how much you have remaining to pay on your balance. You must also be granted a 90-day negotiation period at which time you will be able to talk with lender about modifying the loan agreement. In any event, foreclosure is never a fun experience, but it is something that you should be prepared for.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)