There are several types of mortgage foreclosure. The better known types of foreclosure are foreclosure by judicial sale and foreclosure by power of sale. The laws governing the foreclosure process can vary vastly from state to state. The timeline for foreclosure is slightly different for different types of foreclosure. How and when a mortgage holder can begin the foreclosure process are included in the mortgage documents. Knowing how foreclosure works can help you avoid foreclosure and get the proper foreclosures help in a timely manner. Usually, the mortgage holder begins the process of foreclosure once the homeowner defaults on the mortgage payments.
Judicial Foreclosure
The most common foreclosure type is no doubt the Judicial foreclosure. This type of foreclosure is available in every state and it is the only type of foreclosure in many states. The judicial foreclosure law requires the mortgage holder to seek the supervision of a court for the sale of a foreclosed house. The involvement of the court makes the process longer so the homeowner will have enough time to come up with ways to avoid foreclosure and seek the right foreclosure help.
Power of Sale Foreclosure
The power of sale clause can be found in your mortgage document. If there is one then your state allows the power of sale foreclosure. The power of sale clause makes it legal for the mortgage holder to do the foreclosure and sell your house without the court being involved. The process of foreclosure under the Power of Sale rule is much more speedy than the Judicial foreclosure process. This law makes it simpler for the mortgage holder to foreclose on homeowners in trouble.
The proceeds of the foreclosure sale go to the mortgage companies first, and then to other lien holders. Then if there is anything left of the proceeds, the homeowner may get what is left. The problem is that, in this slow real estate market, the sale proceeds are almost always much less than the amount that owed to the mortgage holders so, not only the homeowner may not get anything, he or she can even be pursued by the mortgage company for the remaining amount owed.
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