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| The act of foreclosure is the repossession of a property by a lender when a debt on the property has fallen behind in the repayment process. The property has been used as a security for a mortgage loan of equal value. The lender is usually a bank or a mortgage company that has provided the finds for the mortgage loan. Through foreclosure, the lender attempts to recoup some of the money that they have the potential to lose.
What is Foreclosure?
When the owner of a property fails to keep his agreement with the lender by making timely repayment; then the lender is legally entitled to repossess or sell the property.
The borrower should make it a point to know all the terms and conditions of the loan such as how much the payment is, the frequency of payments (some can be set up bi-weekly or twice monthly, the date that the payments have to be made.
Court - Ordered Sale
Judicial sale is one type of foreclosure. In judicial foreclosure, the sale of the property will be under supervision of the court and the court will be responsible for the distribution of the proceeds from the sale. All parties involved will be the first notified of the sale.
Usually in this type of sale the funds are used first to settle the terms of the loan, then if any other liens or parties are involved, they are paid next, and finally any remaining funds due to the mortgager are paid.
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