To initiate the process, the lender, who holds the security interest in the real property, must bring an action to terminate the interest of the borrower. This will then allow the lender to remove the borrower from the real property so that he/she may take possession of it and offer it up for sale in order to satisfy the debt. At this point the money owed may include the associated foreclosure costs and unpaid interest in addition to the remaining unpaid loan amount. Because many of the laws governing this process are created and enforced on the state level, they vary throughout the U.S. However, most foreclosure actions fall into one of two categories ? either a judicial foreclosure or a non-judicial foreclosure.
In a judicial foreclosure, the lender must bring the action in court, by asking for an order that demands payment on the loan and upon failure to obtain the moneys owed, that the lender has permission to sell the property to pursue repayment of the debt. These types of foreclosures are frequently sought in both deed of trust states and mortgage system states when the amount that the borrower still owes is in excess of the value of the equity in the real property. In this way, the lender may obtain a deficiency judgment for the remaining amount due after sale of the property. There are states, however, where the lender does not need to file a lawsuit to obtain a deficiency judgment if the foreclosure is upon the mortgage or deed of trust and therefore this process would not be necessary. A judicial foreclosure usually takes several months.
In a non-judicial foreclosure, the procedure can be completed more quickly. The lender must wait a certain amount of time after the mortgage payment becomes past due before initiating this process. The required time period varies from state to state. After the allotted time has passed, the lender initiates the action by serving the borrower with a ?notice of default?, which must contain information about the amount required to ?cure? the default and how much time is available to evade a foreclosure. If the borrower cannot pay the necessary amount in time, then the lender may move forward with the sales process. Typically, in these states, the borrower had signed a promissory note and a deed of trust when the mortgage or refinance took place. Under state law, the deed of trust usually authorizes the lender to foreclose on the property if the borrower defaults, without the necessity of a court order. Visit Us at Google+ Copyright AdvocatesOffice.com
Foreclosure Law - US
- Federal Housing Administration
The Federal Housing Administration, generally known as "FHA", is the largest government insurer of mortgages in the world. A part of the United States Department of Housing and Urban Development (HUD), FHA provides mortgage insurance on single-family, multifamily, manufactured homes and hospital loans made by FHA-approved lenders throughout the United States and its territories.
- Helping Families Save Their Homes Act of 2009
The Helping Families Save Their Homes Act of 2009 (H.R. 1106 or S. 896) is a recently enacted public law in the United States. On May 20, 2009, the Senate bill was signed into law by President Barack Obama. The stated purpose of the act, a product of the 111th United States Congress, was to allow bankruptcy judges to modify mortgages on primary residences, among other purposes; however, that provision was dropped in the Senate and is not included in the version that was eventually signed into law. In addition, the bill amends the Hope for Homeowners Program as well as provide additional provisions to help borrowers avoid foreclosure.
- Homeowner Affordability and Stability Plan - FDIC
On February 18, 2009, President Obama announced a comprehensive plan to help responsible homeowners avoid foreclosure by providing affordable and sustainable mortgage loans. The Homeowner Affordability and Stability Plan, a $75 billion dollar federal program, provides for a sweeping loan modification program targeted at borrowers who are at risk of foreclosure because their incomes are not sufficient to make their mortgage payments. It also includes refinancing opportunities for borrowers who are current on their mortgage payments but have been unable to refinance because their homes have decreased in value.
- Housing and Economic Recovery Act of 2008
The Housing and Economic Recovery Act of 2008 (Pub.L. 110-289, 122 Stat. 2654, enacted July 30, 2008) designed primarily to address the subprime mortgage crisis, was passed by the United States Congress on July 24, 2008 and signed by President George W. Bush on July 30, 2008. It authorizes the Federal Housing Administration to guarantee up to $300 billion in new 30-year fixed rate mortgages for subprime borrowers if lenders write-down principal loan balances to 90 percent of current appraisal value.
- Mortgage Forgiveness Debt Relief Act and Debt Cancellation - IRS
The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.
- National Fair Housing Policy and Equal Opportunity - HUD
The Office of Fair Housing and Equal Opportunity (FHEO) administers and enforces federal laws and establishes policies that make sure all Americans have equal access to the housing of their choice.
- Real Estate Settlement Procedures Act (RESPA)
The Real Estate Settlement Procedures Act (RESPA), enforced by the Consumer Financial Protection Bureau (CFPB) insures that consumers throughout the nation are provided with more helpful information about the cost of the mortgage settlement and protected from unnecessarily high settlement charges caused by certain abusive practices.
- Statement of Policy on Foreclosure Consent and Redemption Rights - FDIC
The policy statement applies to the Corporation in its corporate and receivership capacities. It confirms that section 1825(b) applies to all property held by the Corporation acting as receiver or in its corporate capacity, including property of the financial institutions for which the Corporation has been appointed receiver or property which the Corporation holds for liquidation.
- Truth in Lending Act (TILA)
The Truth in Lending Act (Regulation Z),