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Foreclosure in Our Times

Jun 15, 2008
Some people compare foreclosure to a loan but a foreclosure agreement is a particular type of agreement entered into by the lender and the borrower where the borrower offers his property like his house as security for the loan amount taken by him from the lender. In case the borrower defaults in paying the loan of the lender, the borrower is liable to give away his property to the lender so that the lender can recover his loan amount.

Normally the mortgage holder may give some time to the borrower so that he can pay the loan amount. However if the mortgagor feels that the borrower will not be able to pay the pending amount he may begin the foreclosure procedure. The foreclosure may happen through a judicial proceeding or through the normal power of sale. The mortgaged property is sold after the court proceedings in the case of foreclosure by judicial proceedings.

The proceeds are first used to cover the mortgage, followed by the other lien holders and finally the mortgagor in the end.

In the case of foreclosure by power of sale, the sale of property is done by the mortgage holder without any supervision or initiations from the court. As far as possible foreclosure by power of sale is preferred than foreclosure by judicial sale as there are lesser formalities and time involved in the former. Under mortgage by power of sale, the proceeds first go to the mortgage holder followed by the lien holders and then finally to the mortgagor.

Apart from the tow major types of foreclosures stated above, there are other minor types of foreclosures in countries such as the USA. These small foreclosures have a very limited scope than the two major types. One good example of a minor foreclosure is the strict foreclosure in which case the mortgagor is liable to pay a certain amount of money within a certain time to the lender of the proceeds. The order to pay the amount is given by the court. If the mortgagor does not pay the amount within the specific time, the mortgage holder gets the right to own the property. Strict foreclosure was practiced since a long time but over the last couple of years it has lost its significance.

The amount to be released during the foreclosure proceedings is known as acceleration. The mortgage holder gets the right to claim and recover his debts through the acceleration clause. The mortgage holder gets the right to ask the borrower for any unpaid amounts.

Every foreclosure today has an acceleration clause in place to provide for default made in terms of payments. The acceleration is not hard and fast imposed in the act as the whole process takes a considerable amount of time. Since the judiciary takes a long time to solve the case, people make use of the internet and the information that it provides in order to solve the case. There are a lot of foreclosure cases taking place in countries like the United States.
About the Author
I can help you if you are facing foreclosure and are in need of immediate foreclosure help. You can visit my site if you are interested in helping others and making Money with Foreclosure .
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