More than One Type of Foreclosure
There are more than one type of mortgage foreclosure. The more common types of foreclosure are foreclosure by judicial sale and foreclosure by power of sale. The foreclosure process in each state is different according to the law of that particular state. The timeline for foreclosure is slightly different for different types of foreclosure. How and when a mortgage company can initiate the process of foreclosure are included in the mortgage documents. Knowing how foreclosure works will help you deal with foreclosure and get the proper foreclosures help in a timely manner. Often, the mortgage company starts the foreclosure process when the homeowner defaults on the mortgage payments.
Judicial Foreclosure
The most common type of foreclosure is no doubt the Foreclosure by Judicial Sale. It is available in practically every state and it is the only type of foreclosure in many states. The law governing the judicial foreclosure makes it necessary for the mortgage holder to seek the supervision of a court for the sale of a foreclosed house. The involvement of the court makes the foreclosure process longer so the homeowner will have some time to come up with ways to avoid foreclosure and seek the right foreclosure help.
Power of Sale Foreclosure
If your mortgage document or deed of trust contains the power of sale clause then your state allows the power of sale foreclosure. The power of sale clause allows the mortgage holder to foreclose and sell your property without court supervision. The foreclosure process under the Power of Sale rule is much faster than the Judicial foreclosure process. This law makes it more convenient for the mortgage holder to foreclose on homeowners.
The proceeds of the foreclosure sale go to the mortgage companies first, then to other lien holders. Then if there is anything left of the proceeds, the homeowner sometimes gets what is left. The problem is that, in this bad real estate market, usually the sale proceeds are often much lower than the amount that the mortgage companies are owed so, not only the homeowner may not get anything, he or she can even be pursued by the mortgage holder for the remaining amount owed.
