Foreclosure can be one of the most painful financial experiences for any customer. It is indeed a very serious situation and can have severe repercussions. When you default on too many mortgage payments, you not only may end up losing your home in foreclosure, you also risk having a long lasting negative impact on your credit rating. The importance of having a good credit rating cannot be overstated. A good credit score can not only help you qualify for new loans, it may also be used by some employers to decide whether or not to hire you. Foreclosure can be serious derogatory information on your credit report and therefore it is something you may like to avoid as much as possible.

The financial tsunami of recent years has indeed led to severe economic hardship for thousands of Americans and this has unfortunately given rise to an alarming increase in the incidents of foreclosures. While the economic downturn has led to wide spread job losses, many homeowners are also seeing the value of their homes plummet. The drying up of the financing options through the home equity loans route due to the erosion in home equity coupled with unstable incomes has unfortunately caused an unprecedented rise in foreclosures across the country. Not surprisingly, an increasing number of people are turning to foreclosure help.

Mortgage foreclosure is the legal process through which a lender claims an asset from the consumer borrower. Generally this process is initiated almost always as a result of default on payment by the borrower. To complicate things further, you may note that unlike a credit card, you can’t make partial payment on your monthly mortgage installment. Add to this the currently available exotic mortgage products coupled with rising rates, and you have the perfect recipe for easy defaults and unintended financial complications with your lenders.

Foreclosures can be of two types: judicial and non-judicial. While judicial foreclosure is a court ordered legal process, the non-judicial foreclosure isn’t so. In the case of the non-judicial foreclosure, the mortgage lender notifies the borrower with a notice ofBottom of Form 1 default and there is no court order to do so.

Since the judicial foreclosure involves the order of the court, the foreclosure process can move quite slowly. Also in this process the mortgage deed or mortgage lien does not have a forced power of sale clause. Additionally, in this type of foreclosure the lender needs to formally take the borrower to court and this may delay things further.

The non-judicial foreclosure process can move quite fast in comparison to the judicial foreclosure depending on the mortgage loan terms. The borrower would be generally given a fixed period of time by the lender to either sell the home, or negotiate to solve the financial problems. If the borrower is not able to accomplish this on his own, the mortgage lender can exercise the option of auctioning off the home to the highest bidder to recover its dues.

Different states use different foreclosure processes and your attorney may be able to advise you on whether a judicial or a non-judicial process will apply to your case depending on your particular area of residence and the area of the asset itself. You may also like to note that what action the lender is likely to take in regard to the foreclosure of your home would also depend on whether your loan is a non-recourse or a recourse loan. While recourse loans would allow the lender to take action against you in case you default, non-recourse loans would limit their ability to collect on the defaulted debt by going after the collateral that was used to secure the loan.

Foreclosure can be a devastating financial experience and it is advisable that you consider as many options as possible to help you keep your home by avoiding a bank repossession through foreclosure.

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Category: Finances
Keywords: foreclosure, foreclosure help, mortgage foreclosure