What is Foreclosure?

It seems that every day brings more news about foreclosures across America. As the housing market continues to slump, more and more Americans are losing their houses and foreclosure rates are soaring. A lot of responsible Americans are wondering if they are at risk for foreclosure and want to know what they can do to prevent it from happening to them.

Foreclosure

Foreclosure is when a lender takes over full ownership of a property because the borrower is unable to make payments. If you cannot make the payments on your house and are seriously in debt, the lending organization through which you have your mortgage will get a court order granting them the right to take full ownership of the house.

The mortgage document will usually spell out the conditions under which the lender can take possession of the mortgaged property. Make sure you are familiar with the terms of your mortgage so you can be aware of your risk of foreclosure.

Types of Foreclosure

There are two main types of foreclosure, judicial foreclosure and a foreclosure by power of sale.

• In a judicial foreclosure, the sale of the mortgaged property must be supervised by the courts. The proceeds of the sale will go first to the lender, with any excess money going to the borrower. Most judicial foreclosures occur after a hearing in a local or state court.
• In foreclosure by power of sale, a power of sale clause must be written into the mortgage. A power of sale foreclosure is usually quicker than a judicial sale because it does not require the court's oversight.

In both instances, the money goes first to pay off the lender and then to the borrower.

Contact Us

If you are facing a foreclosure or want legal advice about foreclosure law, contact the Maryland mortgage lawyers of Chaifetz & Coyle, P.C. by calling 443-546-4608.