Bw-home-foreclosure11
By A. Jakobsson
A brief Guide to Home Foreclosure Mortgage is one of the most important bills we have to pay every month. Apart from credit card bills, we also have to make sure we don't miss our other monthly payments. Unfortunately paying with plastic makes it difficult to track our expenses and easier to splurge on shopping sprees. When we fail to pay the mortgage; foreclosure happens and we lose our home. What is anyway? When you miss a number of payments; your mortgage lender has the right to foreclose on the home by selling or repossessing the property. In most cases these properties are auctioned. The usual number of payments that borrowers miss before their house goes into foreclosure is 3 months. In other cases the lender may accelerate the payment to give the borrower a chance to settle his or her debt. They will require the borrower to pay all the missed payments at once. There are different types of foreclosure that lenders can do. Judicial foreclosure The lender sues the homeowner. If the owner of the house does not respond to the lawsuit the lender wins. The property is then put up for auction. A court official will be in charge of the

auction. Participants will have to compete with the mortgage lenders bid. If no one out bids the mortgage lender he repossesses the house. Otherwise, the deed will go to the highest bidder. Foreclosure by the power of sale The deed of the house goes directly back to the mortgage lender. The house is then sold by a real estate agent. Proceeds earned from the sale will be used for paying off the amount owed by the former homeowner. If the proceeds are not enough to cover the mortgage amount the lender will issue a deficiency judgment. The deficiency judgment is the amount left after the proceeds from the sale cover the mortgage owed by the previous homeowner. The previous homeowner is liable for it. Strict foreclosure A court orders the borrower to pay the mortgage in a certain period of time. If the borrower fails the property will go directly back to the mortgage lender without any obligation to sell it. Judicial and foreclosure by power of sale are the most commonly used methods in United States. Other states use other methods. Strict foreclosure was originally used but is now only utilized by a few states such as Vermont and New Hampshire.
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