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Information and description:
Foreclosure is the legal proceeding in which a bank or other
secured creditor sells or repossesses a piece of real property
due to the owner's failure to comply on its promissory note.
When the process is complete, it is typically said that "the
lender has foreclosed its mortgage or lien."
In the United States, there are two sorts of foreclosure in
most common law states. Under "strict foreclosure,"
the bank claims the title and possession of the property back
in full satisfaction of a debt, usually on contract. In the
proceeding simply known as foreclosure, the property is exposed
to auction by the county sheriff or some other officer of
the court. Many states require this latter sort of proceeding
in some or all cases of foreclosure, in order to protect any
equity the debtor may have in the property, in case the value
of the debt being foreclosed on is substantially less than
the market value of the property, this also discourages strategic
fourclosure. In this foreclosure, the sheriff then issues
a deed to the winning bidder at auction. Banks and other institutional
lenders typically bid in the amount of the owed debt at the
sale, and if no other buyers step forward they get title to
the property in return.
Other states have adopted non-judicial foreclosure proceedings,
in which the mortgagee, or more commonly the mortgagee's attorney,
gives the homeowner a legally specified notice of the default
and the mortgagee's intent to sell the property. If the homeowner
fails to cure the default, or use other lawful means such
as filing for bankruptcy which provides a temporary automatic
stay to the foreclosure proceeding to stop the sale, the mortgagee
or its representative will conduct a public auction in a similar
manner as the sheriff's auction described above. The highest
bidder at the auction becomes the owner of the property free
and clear of any interest of the former homeowner but may
be subject to any liens superior to the mortgage being foreclosed
eg. a senior mortgage, unpaid property taxes etc. The buyer
may need further legal action to obtain actual possession
of the premises.
In
most jurisdictions it is customary for the foreclosing lender
to run a title search of the property and to name all other
persons who may have liens on the property, whether by judgment,
by contract, or by statute or other law, so that they may
appear and assert their interest in the foreclosure litigation.
In all US jurisdictions a lender who conducts a foreclosure
sale of property which is the subject of a federal tax lien
must give 25 days notice of the sale to the Internal Revenue
Service: failure to give notice to the IRS will result in
the lien remaining attached to the property after the sale.
As of September 2005, there are roughly 85,000 homes in foreclosure
in the United States.
See
also:
•
List
of Finance Topics
• Adverse Credit History
• Bankruptcy
• Debt
Consolidation
• Personal
Finance
• Student
Loan Consolidate
• Experian
• Liens
• Credit Score
This
article is licensed under the GNU
Free Documentation License.
It uses material from the Wikipedia
article "Foreclosure".
foreclosre, freclosure, foeclosure, forecosure, forecrousure,
forclosure, forelosure, foreclosue, foreclsure, forecloure,
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