The Basics Of Foreclosure Laws

Answer 1

Foreclosure is a grim factor that many people are facing today all over the nation. Banks or lenders will often try to take advantage of a situation they feel they can, so it is important for consumers to know their rights. Each state's foreclosure laws are different; what may be legal in one state will be illegal in another. For this reason, consumers must learn their own individual state's foreclosure laws to understand the proceeding. There are several factors that are involved in foreclosure in each state that must be known.

Judicial and non-judicial foreclosure are two factors that are variable. Nearly every state includes judicial foreclosure, which allows the lender to file a lawsuit or sell the property, providing that the mortgage document or Deed of Trust did not include a power of sale clause. Non-judicial foreclosure is related to the power of sale clause. This wording is included in some documents, allowing the sale of the property to the highest bidder, paid in cash. Before the sale is allowed to take place, each state requires that formal notice be printed in the relevant newspaper for several weeks. If a power of sale clause is present, there is usually a month allowance of time after the last publication was printed in the newspaper before the sale is permitted to take place. In contracts where a power of sale clause is not included, the extra time period is not always required.

Foreclosure proceedings typically last between 30-180 days, depending on the individual states. States that have a higher population usually have a longer time allowance than less populated states, but not in every case. Another factor included in every state is the right of redemption. This is the right held by the consumer facing foreclosure to redeem their property from a tax sale within a specified amount of time. Some states do not have a right of redemption, while others do. This time frame, if present, varies and is usually about 12 months or less. Some states also have laws allowing deficiency judgments. These are detrimental to the consumer, demanding a balance due if the foreclosure sale did not meet the amount that is owed. Consumers who are facing a deficiency judgment charge must hire an attorney to fight it. Every consumer facing foreclosure has specific rights. To learn about rights and proceedings, foreclosurelaw.org is an excellent resource for information.