When a borrower cannot afford to keep up with their monthly mortgage payments, the bank will foreclose on the property in order to recoup the money they lent to the property owner. Foreclosure involves selling real estate to satisfy outstanding mortgage debt. Although laws vary greatly by state, generally speaking, there are two basic types of foreclosure practiced nationwide: power of sale foreclosure and judicial foreclosure. Power of sale foreclosure is a faster process than judicial foreclosure and usually involves a deed of trust, held by a trustee who has authority to sell the property in the event that the borrower fails to make payments. Many states, however, require lenders to utilize judicial foreclosure in order to take back property, which requires a judge, is similar to a civil lawsuit in process, and can take a year or longer. Because of a backlog due to the high rate of foreclosures, power of sale jurisdiction may take many months or even years to be accomplished. Some lenders are unwilling to foreclose on a property, though, and will “sit on a lien” until values recover.
Posted On: May 6, 2014
What is the Difference Between Surrendering a Home and Foreclosure?
Last updated Aug. 30, 2017. What is the difference between surrendering a home in bankruptcy and losing a home to foreclosure? Many consumers are confused by the interplay between the two. When you file bankruptcy and surrender a home, you give the property back to the lender. When a lender forecloses on your home due to…Read more
Posted On: March 7, 2014
How is a Short Sale Different from a Foreclosure?
How Do Short Sales and Foreclosure Differ? With the housing market the way it is, many people want to know: what is the difference between a short sale and a foreclosure sale? And what difference does it make in bankruptcy? In a short sale, you have defaulted on your loan and cannot make the payments, but…Read more
Posted On: February 26, 2014
Posted by: John O'Connor
Am I Protected by the Arizona Anti-Deficiency Statute?
Am I Protected by Arizona’s Anti-Deficiency Law After Foreclosure? When most families purchase a home, they don’t envision ending up facing a foreclosure sale, but in states like Arizona where the housing market has been particularly hard hit, foreclosure is an all too common event. In cases where a home has plummeted in value, borrowers…Read more
Posted On: February 23, 2014
Deficiency Judgment: After Foreclosure, Do I Owe Money?
Last updated April 13, 2017. A common misconception among consumers is that after foreclosure they will not owe their mortgage lender. Many homeowners who go through foreclosure are surprised to learn that they still owe money on their house, even though they no longer own it! Most mortgage lenders require borrowers to personally guarantee the…Read more
Posted On: November 2, 2013
Posted by: National Bankruptcy Forum
How Long Does Foreclosure Take?
Last updated May 31, 2017. If you’re running into trouble making your mortgage payments, you may be wondering: How long does it take for a bank to foreclose on your home? Most lenders will not begin foreclosure proceedings until a borrower is 3-6 months behind on their payments. Although missing a single payment is technically…Read more
Posted On: October 28, 2013
Posted by: M. Erik Clark
Bankruptcy and Foreclosure: The Consumer’s Overview
Last updated Sept. 21, 2017. OK, here’s the deal with bankruptcy and foreclosure. Despite what you may have heard, filing for bankruptcy does not necessarily permanently stop a lender from foreclosing on your home. Filing for bankruptcy will always temporarily stop the bank foreclosing on your home. This is true regardless of which chapter you…Read more