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Different Types of Mortgage Foreclosure
By Vic Hurlstorm | June 2, 2009
There are several types of mortgage foreclosure. The better known types of foreclosure are judicial sale foreclosure and foreclosure by power of sale. The process of foreclosure of each state differs according to the law of that particular state. The timeline for foreclosure is slightly different for different types of foreclosure. When and how a mortgage company can begin the foreclosure process are usually spelled out in the mortgage documents. Knowing how foreclosure works can usually help you prevent foreclosure and get the appropriate foreclosures help in a timely manner. Often, the mortgage company begins the process of foreclosure as soon as the homeowner misses many mortgage payments.
Judicial Foreclosure
The most common type of foreclosure is no doubt the Foreclosure by Judicial Sale. It is available in practically every state and many states do not have any other types of foreclosure. The law of the judicial foreclosure makes it a requirement for the mortgage holder to seek the supervision of a court for the sale of a property in foreclosure. The involvement of the court slows down the foreclosure process so the homeowner will have much longer to find ways to avoid foreclosure and find the right foreclosure help.
Power of Sale Foreclosure
If your mortgage document or deed of trust contains the power of sale clause then your state allows the power of sale foreclosure. The power of sale clause allows the mortgage company to foreclose and sell your house without court supervision. The process of foreclosure under the Power of Sale rule is faster than the Judicial foreclosure process. This law makes it simpler for the mortgage holder to foreclose on homeowners.
The proceeds of the foreclosure sale go to the mortgage holders first, and then to other lien holders. Then if there is anything left of the proceeds, the homeowner sometimes gets what is left. However, in this bad real estate market, usually the sale proceeds are almost always much lower than the amount that the mortgage companies are owed so, not only the homeowner usually gets nothing, he or she can even be pursued for the remaining amount owed.
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