Creative Real Estate Investing

There are a few types of foreclosure. The most common types of foreclosure are judicial sale foreclosure and power of sale foreclosure. The laws governing the foreclosure process are different from state to state. The timeline for foreclosure is slightly different for each type of foreclosure. How and when a mortgage company can start the foreclosure process are outlined in the mortgage documents. Knowing how foreclosure works can usually help homeowners deal with foreclosure and get the appropriate foreclosures help before it is too late. Usually, the mortgage company starts the foreclosure process once the homeowner misses many months of mortgage payments.

Judicial Foreclosure

Foreclosure by judicial sale is most likely the most common foreclosure type. This type of foreclosure is available in practically every state and it is the sole type of foreclosure in a lot of states. The judicial foreclosure law 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 process slower so the homeowner will have some time to come up with ways to stop foreclosure and find the right foreclosure help.

Power of Sale Foreclosure

You can generally find the power of sale clause in your mortgage document. If there is one then your state allows the power of sale foreclosure. The power of sale clause makes it legal for the mortgage holder to foreclose and sell your house without the court being involved. The process of foreclosure under the Power of Sale rule is much more speedy than the other foreclosure process. This law makes it faster for the mortgage company to foreclose on homes in default.

The proceeds of the foreclosure sale go to the mortgage holders first, then to other lien holders. Then if there is anything left of the proceeds, the homeowner may get what is left. The problem is that, in this bad real estate market, usually the sale proceeds are almost always much less than the amount that the mortgage companies are owed so, not only the homeowner usually gets nothing, he or she may be pursued for the remaining amount owed.

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