When a lender decides to sell your property this is usually due to a foreclosure notice having been served. This process enables the lender to recover their losses as well as retrieve the outstanding balance of the loan and collecting any costs they may have incurred whilst trying to collect the debt and the cost of foreclosing on the homeowner’s property. Foreclosure can happen for a number of reasons including:
- Failure to keep up with mortgage payments
- Violating the terms of the loan and its stipulations
- Paying off the outstanding debt by transferring ownership of the property before getting your lenders consent
If any of the above do happen to occur then the lender may decide to put the property up for public auction, that way the lender will be able to recover their losses. If the property does not receive high enough bids then the lender may decide to hold onto the property and take ownership of it.
There are two processes that can be taken when a foreclosure goes ahead with no other solution in site. These are non-judicial and judicial foreclosures and depending on which state you live in the legal process can be different. The difference between the two is as follows:
- Non-judicial foreclosure – goes ahead without any lawful court proceedings
- Judicial foreclosure – is a civil lawsuit and is supervised by and dealt with by the court entirely
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