There are more than one type of foreclosure. The most common types of foreclosure are judicial sale foreclosure and foreclosure by power of sale. The foreclosure process in each state is different based on the law of that particular state. The timeline for foreclosure is slightly different for different types of foreclosure. How and when a mortgage holder can initiate the process of foreclosure are included in the mortgage documents. Knowing how foreclosure works can usually help you avoid foreclosure and get the proper foreclosures help in time. Most of the time, the mortgage holder initiates the foreclosure process once the homeowner defaults on the mortgage payments.
Judicial Foreclosure
Judicial Foreclosure is most likely the most common type of foreclosure. It is available in practically every state and a lot of states do not have any other types of foreclosure. The law governing the judicial foreclosure makes it necessary for the mortgage holder to seek the supervision of a court for the sale of a foreclosed house. The involvement of the court makes the process more time consuming so the homeowner will have much longer to find ways to prevent foreclosure and seek the right foreclosure help.
Power of Sale Foreclosure
The power of sale clause can be found in your mortgage document. If you can find it then your state allows the power of sale foreclosure. The power of sale clause makes it legal for the mortgage company to do the foreclosure and sell your property without court supervision. The process of foreclosure under the Power of Sale rule is faster than the Judicial foreclosure process. This law makes it faster for the mortgage holder to foreclose on homes in default.
The foreclosure sale proceeds go to the mortgage holders first, then to other lien holders. Then if there is anything left of the proceeds, the homeowner usually gets what is left. However, in this bad real estate market, the sale proceeds are usually much less than the amount that the mortgage holders are owed so, not only the homeowner may get nothing, he or she may be pursued by the mortgage company for the remaining amount owed.
