Foreclosure: What It Is and How It Works?
Foreclosure is a process that enables a lender to recover the loan amount by selling the mortgaged property. When someone mortgages an asset, both parties form an agreement.
If the borrower stops paying the monthly installment, the lender can recover the money through foreclosure. If you want to know about foreclosures in Tulsa, OK, experienced lawyers at Aaron Bruner Law can help you professionally.
Types of Foreclosures
If we dive deep into the concept of foreclosure, we will find two types. One is judicial, and the other is non-judicial. Many states consider both procedures.
This process starts after a court order when the borrower loses his point in court. The lender gets all rights to the property. The process is legal.
The borrower has to leave the property, no matter how unwilling they are, to do that.
- Non-Judicial Foreclosure
There is no involvement of the court. The person appointed by the owner or the owner can sell the property if the borrower fails to pay the installment amount. There are terms and conditions associated with the foreclosure process. We will go through them in the later sections of the blog.
When Does Foreclosure Begin?
Foreclosure is a long process. It doesn’t start immediately after the borrower misses the payment. As we know, there are two types of foreclosures. But the steps for initiating foreclosure and selling the property are quite the same. Let’s explore them one by one.
- Missing the First Payment
It is the very initial phase. But lenders cannot start foreclosure here. If a borrower misses paying an installment, they get a grace period. When they do not make a payment in the grace period, the borrower gets a chance to pay with some late fee charges. But if the borrower misses it for three months consecutively, the lender sends a demand letter.
- Declare as Default
In the next phase, when three months have passed, a notice of default goes from the lender’s side to the borrower giving 30 days to the borrower to clear the past due payments. Most lenders do not send default notices before 90 days or three missed payments. The rules may vary from country to country.
- Notice for Sale
Initiating foreclosure processes is different in different states. As we have already discussed, there are two types of foreclosure: judicial and non-judicial. In case-non-judicial foreclosure, you would need to do some paperwork. After that, the process starts. This type of foreclosure is faster and less time-consuming.
But on the other hand, in the case of judicial foreclosure, court approval is required for each step. So, it is considered a lengthy process. Our business lawyer in Tulsa, Oklahoma, can assist you efficiently with the legality of the process. The notice of sale is recorded in the country where there is property. All the laws and regulations are followed valid in that respective country.
- Sale of the Property
Now, the property is placed for auction. It will go to the bidder with the maximum bid and all the required qualifications. Once there is a confirmation of a higher bidder, the sale completes. The property will then be passed on to the purchaser. They will take immediate possession.
- Asset Ownership
The asset will go to them if the lender gets an appropriate bidder during the auction. But if the property does not find an owner, the lender becomes its owner. Now he will get the full rights. The lender can try to sell the property through a broker.
It is the last step in the process. After the auction, the next step is selecting a new owner. Now, the borrower will get a notice to vacate the property immediately. If the property does not sell, the bank will still get full rights to the property. They can send a notice to the borrower to evacuate.
Enough days are given to the borrower to remove the belongings. But in every condition, the borrower has no other way except to leave the space.
Get Help at Aaron Bruner Law Today
Foreclosure is a legal process and requires a deep understanding of the law. If you are seeking professional help, contact our expert law attorneys at the clinic now!