There are two types of foreclosures – judicial and non-judicial. It depends on the laws of the state in which the property is located. The foreclosure is a process by which the lender realizes unpaid dues from the borrower. The property that has been kept mortgaged is foreclosed upon.
The judicial foreclosure starts with the lender filing a complaint with the court seeking permission to go ahead. A notice of Lis Pendens is noted with the court. Lis Pendens is a public notification stating that the property under dispute is under litigation and thus it would not be safe to purchase such a unit until the court has resolved the matter.
After the complaint has been filed in court by the lender, the borrower or respondent will be served with a notice of the said complaint. It may be either directly served or through mail. If the borrower cannot be traced then the notice is made public. The serving of the notice is pivotal to the running of the foreclosure process since on its receipt depends the issue of the borrower carrying on with his or her legal defense.
A date is set for hearing in the court. At the hearing both the plaintiff and defendant get a chance to present their stand on the matter. If the court finds the lender is right then it allows an auction of the property to be held to realize the dues together with relevant fees and penalties.
Judicial foreclosure is the norm in many sates. It takes time in comparison to non-judicial foreclosure process. In some states there are special laws wherein the borrower has to prove that the loan is not defaulting. But in other states the process of judicial foreclosure is the same as other lawsuits.
In judicial foreclosure the borrower often has the right to cure the fault or “redeem” the property. There are certain deadlines during which time the borrower is allowed to become current on the loan. If the deadline is missed then the judge orders the property to be auctioned off.
By the process of judicial foreclosure the lender take over the title of the property and also get a judgment against the borrower for any pending amounts that may be due even after the auction sale. With prices being at an all time low, the sale proceeds of the house does not often cover the full amount of the loan.
For more information please visit: http://www.floridalawattorney.com