Posted on: 31st Mar, 2004 03:09 am
Judicial Foreclosure is the legal process where a lender repossesses the borrower's home because the borrower has defaulted on the mortgage. At the end of the foreclosure process, the court sells the house at an auction called a sheriff's sale.
The lender starts the proceedings depending on the terms and conditions of the loan agreement, the note and the mortgage that you signed at loan settlement, and your state's law. Some loans have an acceleration clause that allows the lender to call the loan due as soon as you default. Otherwise, whenever a loan is around 120 days past due, the lender files for foreclosure. The borrower may occupy the house until they are evicted after the sale.
How long can borrower occupy property after the sale?
After the judicial sale has been confirmed by the foreclosure judge, the new owner will file a request with the court to have the current occupants evicted. The new owner will then make a request with the Evictions Department to have a sheriff go to the house with an eviction notice. After the eviction notice has been served, how long the occupant(s) have to remain in the house is determined by state law.
Does the borrower pay for deficiency?
If the lender is unable to recover the total balance of the unpaid loan balance, the borrower has to pay the deficiency between the unpaid debt and the sale price, depending on the state. Some states do not allow a lender to get a deficiency judgment if the loan is a purchase money mortgage taken for buying the borrower's primary residence and secured by the property. These laws do not apply to second mortgages and investment properties.
Can borrower get back property after the sale?
Some states allow the borrower to save or reacquire the property even after the sheriff's sale. All the borrower has to do is pay the purchaser (who is most often the lender) the amount the house was sold for. Sometimes, the borrower may be able to work out an agreement that will allow him to occupy the property as a tenant.
What are the effects of foreclosure?
In order to have all subordinate liens wiped out, the plaintiff will join all the subordinate lien holders to the foreclosure suit. If the subordinate lien holders want to recover their interest, they need to bid for the property at the foreclosure sale.
Once the foreclosure suit is filed, it will remain on the borrower's credit report for 7 years after the sheriff's sale. This means the borrower will not be able to qualify for a new home loan with a reasonable interest rate for several years.
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The lender starts the proceedings depending on the terms and conditions of the loan agreement, the note and the mortgage that you signed at loan settlement, and your state's law. Some loans have an acceleration clause that allows the lender to call the loan due as soon as you default. Otherwise, whenever a loan is around 120 days past due, the lender files for foreclosure. The borrower may occupy the house until they are evicted after the sale.
How long can borrower occupy property after the sale?
After the judicial sale has been confirmed by the foreclosure judge, the new owner will file a request with the court to have the current occupants evicted. The new owner will then make a request with the Evictions Department to have a sheriff go to the house with an eviction notice. After the eviction notice has been served, how long the occupant(s) have to remain in the house is determined by state law.
Does the borrower pay for deficiency?
If the lender is unable to recover the total balance of the unpaid loan balance, the borrower has to pay the deficiency between the unpaid debt and the sale price, depending on the state. Some states do not allow a lender to get a deficiency judgment if the loan is a purchase money mortgage taken for buying the borrower's primary residence and secured by the property. These laws do not apply to second mortgages and investment properties.
Can borrower get back property after the sale?
Some states allow the borrower to save or reacquire the property even after the sheriff's sale. All the borrower has to do is pay the purchaser (who is most often the lender) the amount the house was sold for. Sometimes, the borrower may be able to work out an agreement that will allow him to occupy the property as a tenant.
What are the effects of foreclosure?
In order to have all subordinate liens wiped out, the plaintiff will join all the subordinate lien holders to the foreclosure suit. If the subordinate lien holders want to recover their interest, they need to bid for the property at the foreclosure sale.
Once the foreclosure suit is filed, it will remain on the borrower's credit report for 7 years after the sheriff's sale. This means the borrower will not be able to qualify for a new home loan with a reasonable interest rate for several years.
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- How Judicial/Non-judicial Foreclosure works
- How to avoid foreclosure-17 ways to get out of mortgage mess
- How to decide between foreclosure and bankruptcy
- Loss Mitigation: Avoid Foreclosure with Loan Workout Options
Related Forum Discussions
- Can I sell property before foreclosure?
- What are the credit effects of foreclosure?
- What if the mortgage is in foreclosure and the borrower wants to continue it?
- Can I be taxed after foreclosure?
- Can I get tax lien redemption on foreclosed property?
- How long after a foreclosure refinance can I refinance again?
- Should I file bankruptcy to avoid foreclosure?
Welcome hank,
A foreclosure will badly affect your credit report. It will lower your credit score by 250 points. Moreover if the lender cannot recover his due amount from the sale of the property, he may even ask you to pay the deficient amount or can even place liens on your other properties. Check out with your lender for the option of a short sale or a deed in lieu foreclosure.
A foreclosure will badly affect your credit report. It will lower your credit score by 250 points. Moreover if the lender cannot recover his due amount from the sale of the property, he may even ask you to pay the deficient amount or can even place liens on your other properties. Check out with your lender for the option of a short sale or a deed in lieu foreclosure.
thanks Adonis,being that the property is considered a rental prop and all payments are up to date. can i still do a short sale
Welcome hank,
I don't think you will face any problem in short selling rental property. But as you are up to date on the payments, I guess the lender will not be ready for a short sale. Lenders agree to a short only when you are delinquent on payments.
I don't think you will face any problem in short selling rental property. But as you are up to date on the payments, I guess the lender will not be ready for a short sale. Lenders agree to a short only when you are delinquent on payments.
I live in a town home however i want to leave it the other home owners hardly pays there dues roofs leakin lights r not workin in common area become very dangerous do i let my house go into forclosure or a short sale will forclosure affect my credit for how long will i have to pay back any money
I was wondering if I myself am applying for a home loan and I need a co borrower in order for my own loan, but the co borrower in question has a foreclosure on their credit report how does that affect my home loan? Will it just increase my interest rate or would it affect my debt to income ration?
To Bjmj,
You can either short sell the property or let it be foreclosed by the lender, in case you do not want to keep the town home. You can also opt for a deed in lieu of foreclosure and sign over the title to the lender. But no matter which one you opt for, your credit scores are surely going to be affected. In case of a short sale, your credit will be hit by around 75-100 points. On the other hand, a foreclosure or a deed in lieu will both drop your credit by almost 200-250 points. The difference is that unlike a short sale and a foreclosure, in a deed in lieu the deficiency is likely to be forgiven by the lender.
To MHL,
The co-borrower is as much responsible for the loan as the primary borrower is. It is true that the credit score of the primary borrower is the main factor that affects the interest rate on your loan. But if the co-borrower has a good credit score, it too affects the interest rate on the loan. However, if the co-borrower has a lot of debts, it will also increase your DTI ratio which can affect your chances of qualifying for the loan.
You can either short sell the property or let it be foreclosed by the lender, in case you do not want to keep the town home. You can also opt for a deed in lieu of foreclosure and sign over the title to the lender. But no matter which one you opt for, your credit scores are surely going to be affected. In case of a short sale, your credit will be hit by around 75-100 points. On the other hand, a foreclosure or a deed in lieu will both drop your credit by almost 200-250 points. The difference is that unlike a short sale and a foreclosure, in a deed in lieu the deficiency is likely to be forgiven by the lender.
To MHL,
The co-borrower is as much responsible for the loan as the primary borrower is. It is true that the credit score of the primary borrower is the main factor that affects the interest rate on your loan. But if the co-borrower has a good credit score, it too affects the interest rate on the loan. However, if the co-borrower has a lot of debts, it will also increase your DTI ratio which can affect your chances of qualifying for the loan.
we have a mobile home that is vacent and has been foreclosed on. the lender has given us the option of right of redemption. the park the home is in wants to buy the home. would exercising the right of redemption be better on our credit rating than foreclosure? or is it too late? :
Hi ronneff!
Welcome to forums!
If you exercise your right of redemption and buy the property back from the lender, then your property won't be foreclosed. It will have a positive affect on your credit.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you exercise your right of redemption and buy the property back from the lender, then your property won't be foreclosed. It will have a positive affect on your credit.
Feel free to ask if you've further queries.
Sussane
Is it legal to rent a home that is in foreclosure and not pay the lender?
Hi Linzi,
Your property will be in foreclosure if you do not pay off the dues to the lender. If there is a tenant in your property, then the lender will ask the tenant to pay the rent to him and not to you.
Your property will be in foreclosure if you do not pay off the dues to the lender. If there is a tenant in your property, then the lender will ask the tenant to pay the rent to him and not to you.
my rental property went into foreclosure in aug. 2010 it was actioned off in 2/2010 we had a second that was sold to another company before the foreclosure we never refi so it was original money. The company that holds the seconds has been calling us non stop, can they come after us for that money. we live in California
welcome guest,
if your second mortgage was purchase mortgage, then the lender won't be able to come after you for the mortgage payments.
if your second mortgage was purchase mortgage, then the lender won't be able to come after you for the mortgage payments.
Plantiff placed a lien on my home. If they win, can they take my primary residence(my home)
Hi Guest,
The plaintiff can ask you to sell off the property so that he can recover his dues from you.
The plaintiff can ask you to sell off the property so that he can recover his dues from you.
House is in foreclosure , hearing scheduled for the 11th of April but lawyer is pushing for a continuance . Is there still time to do a short sell ?