Understanding Different Types of Mortgage Foreclosure

There are several types of foreclosure. The more common types of foreclosure are judicial sale foreclosure and power of sale foreclosure. The laws concerning the foreclosure process differ from state to state. The timeline for foreclosure is slightly different for each type of foreclosure. How and when a mortgage holder can initiate the foreclosure process are included in the mortgage documents. Knowing how foreclosure works can usually help you deal with foreclosure and get the appropriate foreclosures help before it is too late. Usually, the mortgage holder initiates the foreclosure process as soon as the homeowner misses a lot of mortgage payments.

Judicial Foreclosure

Foreclosure by judicial sale is probably the most common foreclosure type. It is available in practically every state and it is the sole type of foreclosure in many states. The judicial foreclosure law requires the mortgage company to seek the supervision of a court for the sale of a property in foreclosure. The involvement of the court makes the process of foreclosure longer so the homeowner will have much longer to find ways to stop foreclosure and find the right foreclosure help.

Power of Sale Foreclosure

If your mortgage document or deed of trust contains the power of sale clause then your state allows the power of sale foreclosure. The power of sale clause makes it legal for the mortgage holder to do the foreclosure and sell your home without court supervision. The process of foreclosure under the Power of Sale rule is much faster than the Judicial foreclosure process. It is simpler for the mortgage holder to foreclose on homes in default.

The proceeds of the foreclosure sale go to the mortgage holders first, then to other lien holders. Then if there is anything left of the proceeds, the homeowner may get what is left. However, in this slow real estate market, the proceeds are often much lower than the amount that the mortgage holders are owed so, not only the homeowner may not get anything, he or she may be pursued for the remaining amount owed.