Important Foreclosure Laws to Know

Foreclosure laws are established in the state you reside in. They are design to protect the interests of borrowers and lenders in circumstances where a property needs to be sold due to non-payment or the inability of the mortgage holder to continue paying a mortgage. There are two standard types of foreclosures that take place in the United States. They are the judicial sale and power of sale.

The judicial sale and power of sale foreclosure confer different rights and authorities upon the parties involved in the foreclosure proceeding. It is important to understand the difference between the 2 and how they may affect the outcome of your foreclosure proceeding.

Judicial Sale

A judicial sale is one where the sale of the property in foreclosure is done under a court’s supervision. The supervision is required in order to ensure that the rights of the mortgage holder are honored and that the lender is obeying all laws regarding the foreclosure proceedings. This includes access rights to the property during foreclosure, preventing the lender from requiring immediate removal from the property with providing an adequate transition period and other rights of the mortgage holder.

Power of Sale

In a power of sale foreclosure, the lender is permitted to proceed without the supervision of the courts. This type of foreclosure proceeding is seen as being advantageous to the needs of the lender in reacquiring the property and selling it immediately but may cause harm or duress to the mortgage holder. Because this type of foreclosure proceeding gives too much power to the lender, many state do not permit its use and instead require all foreclosure proceedings be done as a judicial sale.

Foreclosure laws vary from state to state. What may be permissible in one state regarding foreclosure is prohibited in another state. Since it is not possible to outline every possible nuance associated with a certain state’s foreclosure laws, you should search on line for the laws of the state in which you are domiciled.

Doing a state specific search enables you to find information specific to your situation as it relates to foreclosures. Further information should be follow-up on with a competent licensed and practicing attorney in your area that understands the foreclosure laws for your state. The nature of foreclosure law is technical and a thorough understanding of your rights and responsibilities as a lender or borrower is important. An attorney in this specialty can help provide the necessary knowledge in order to proceed in any type of foreclosure proceeding.