7 Facts You Should Know About Foreclosure
1.Foreclosure Is a Process
The formal process of foreclosure involves the lender or other lienholder obtaining a termination of the equitable right of redemption of the borrower. This will happen either by court order or by operation of law. Typically, what will happen is that the lender will get a security interest from the borrower when the original agreement is made upon purchasing the house. If the borrower ends up defaulting on the loan, the lender will try to repossess the property. However, if the borrower is able to repay the debt, courts of equity will potentially grant the borrower the equitable right of redemption. While the borrower has the equitable right of redemption, the lender will not necessarily be able to repossess the property. The process of foreclosure involves the lender seeking to immediately terminate this right and take back both legal and equitable title to the house in fee simple. It is also possible for other lienholders to foreclose on the owner’s right of redemption for other types of debts, such as overdue homeowners’ dues, overdue taxes, et cetera. However, most commonly, the foreclosure process involves the bank or other creditor either selling or repossessing the house after the owner has failed to comply with the agreement. At the conclusion of the process, the lender will be able to sell the property and keep the profits to pay off the mortgage as well as any legal costs. If selling the house does not give the lender enough money to pay off the existing balance of principal and fees, the lender will be able to file a claim for a deficiency judgment. If you need legal assistance you can also find additional legal aid here and you can search for a lawyer here.