When the mortgage owner can no longer afford to pay back
By: Esteri Maina
As it is known, the house that the mortgage owner pays loan for becomes the security for the lender just in case a default in payment occurs.
This is what financial experts call the foreclosure that is an expert and legal process where the lender obtains an order from court, terminating the mortgage payer’s equitable right of redemption.
This does not mean the house owner cannot prevent foreclosure in the courts of equity and keep his right of redemption in case the lender is seeking to repossess his property.
The mortgage owner as well may have given the same house as a collateral to other creditors he or she has a debt with, and they too can foreclose the same right of redemption.
One of the major types of foreclosure that is rarely used by victims is the judicial sale.
The property is sold under the supervision of the courts and the proceeds are distributed to those who hold liens on it while what is left is given to the mortgage owner.
The first thing to do with this though is to notify all the parties involved in the process in total compliance to what the state law requires or your country.
The other common type is foreclosure by power of sale where its clause is included in the mortgage that more often than not mean the same as deed of trust in given states.
The difference of this from judicial sale is that the mortgage owner sells the house under no court supervision hence convenient, while distribution of proceeds is similar.
The courts may have different arrangements of selling the properties depending on which country or state this is happening.
Where an entity is chosen to auction the house, like in the U.S, a few factors influencing real properties may affect setting the initial prices such as weak markets.
The goal is to attract bids at a given price, that means a higher level of pricing may fail to get this done and this leave the property with the mortgage owner to try sale on via other real estate controls.
It can so happen the real estate prices have gone down at the time of foreclosure efforts and the property is thus sold at a lower value than the original mortgage loan.
Without any insurance to cover the loss, this may press the courts in question to place the security interest on the mortgage owner’s other assets.
This ruling will then favor the lender to collect the remainders of the debt from the mortgage payer to recover his total benefits from foreclosure process.
An injunction is what the mortgage payer should seek from the courts of equity in order to sustain his or her right of redemption.
This is to say he or she can obtain a provisional restraining order to block any repossession or foreclosure efforts and this is not without preset conditions to protect the lender, just incase the aim was to escape payment of their debts.
The other important things to note is that as a debtor, you may suffer for invalidate debts and this can be challenged via foreclosure proceedings.
This is why keeping all your documents, reports, receipts in relation to the mortgage payments is important for they are the only things that could be used in cases of deception.
It is important that you learn the foreclosure proceedings at your state or country. Use the information on this article for general reading.
An original article by Esteri MainaFORECLOSURE
Article Source: http://www.ArticleBiz.com