Many homeowners have questions about how foreclosure works and how long they have between when they miss a payment and when the bank actually forecloses. In these cases, lenders are sometimes willing to accept a short sale. Equally important, the new system enables counties to help homeowners with financial trouble avoid foreclosure. You may also consider paying the Realtor out of your pocket so that you can get the house sold.
Sometimes a foreclosure sale is held at the courthouse, pursuant to the final judgment. Obviously, strict foreclosure is an extremely unfair deal for homeowners, and the more equity they have in the property, the more unfair it becomes. Acceleration allows the mortgage holder the right when the mortgagor defaults on the mortgage to declare the entire debt due and payable.
This typically occurs because many of the properties up for sale at foreclosure auctions are worth less than the total amount owed to the bank or lender. While most homeowners go into foreclosure because they cannot make their mortgage payment, some enter into foreclosure because they intentionally miss their payments.
The determining factor as to which process which process will be chosen by the bank, is whether or not the mortgage or deed of trust contains a power of sale clause. During foreclosure, the mortgage lender may seize the property and sell it to recoup the money it lost from the mortgage default.
In strict foreclosure states, once the homeowners have fallen behind, the lender goes into court and obtains an order that states the borrowers are in default of the mortgage contract. A Final Loss Mitigation Affidavit will be filed if the mortgage company has completed the loss mitigation review and believes there are no alternatives to foreclosure available to the homeowner.