February 2009 hit a new monthly high for number of foreclosures, as reported by Foreclosures.com, increasing by 24 percent since January.
Foreclosed residential properties occur when the bank or other secure creditor repossesses and attempts to sell the property after the owner has failed to comply with their mortgage agreement. There are two main types of foreclosure to be aware of, foreclosure by judicial sale and foreclosure by power of sale.
Foreclosure by judicial sale, also referred to judicial foreclosure, is perhaps the most common type. It is available in every state and is the required method in many states. As with all other legal actions, all involved parties have to be notified of the foreclosure and there is usually some sort of short trial. The mortgaged property is sold under the direction of the court and proceeds from the sale first go to the mortgage, then any other lien holders, and lastly to the mortgagor.
The majority of states also allow foreclosure by power of sale. Generally faster than judicial foreclosure, by power of sale involves the sale of the property by the mortgage holder without the supervision of a judicial court. Again, proceeds from the sale go first to the mortgage holder, then to other lien holders, and then to the mortgagor. However, foreclosure by the power of sale can later be subject to judicial review if title issues arise.
Aware of the rising number of forecloses, the U.S. Department of Housing and Urban Development has offered a lot of helpful tips and suggestions to avoid reaching the point of foreclosure. The suggestions and tips they have provided are:
1. Don’t ignore the problem. The more you wait without addressing the issue the worse the problem will get and harder it will be to resolve the issue.
2. Contact your lender as soon as you realize that you have a problem. The sooner you contact your lender the faster they can work with you and find possible solutions that avoid foreclosure.
3. Open and respond to all mail from your lender. Again, don’t ignore the problem.
4. Know your mortgage rights.
5. Understand foreclosure prevention options.
6. Contact a HUD-approved housing counselor.
7. Prioritize your spending.
8. Use your assets.
9. Avoid foreclosure prevention companies. They do not always have your best interest at heart.
10. Don’t lose your house to foreclosure recovery scams.
Chris is an editor for Inside Real Estate, a blog network of Realtors sharing their expertise on the real estate industry.
[tags]real estate, foreclosure, foreclosures[/tags]
|
|