What is a Home Foreclosure – When and How Does it Happen?
It seems to me that a good starting point for the blog is a definition of a foreclosure.
What is a Home Foreclosure?
Foreclosure is the legal proceeding in which a mortgagee, or other lienholder, usually a lender, obtains a court ordered termination of a mortgagor’s equitable right of redemption. Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the owner the right of redemption if the borrower repays the debt.
When and How Does a Home Foreclosure Happen?
The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust”. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that “the lender has foreclosed its mortgage or lien”.
So, in other words, if you took out a mortgage to pay for a house, and for whatever reason, do not continue to pay the mortgage on time, the lender can take your house from you to repay the debt that you’re owed.
Keep reading, and I’ll continue to post what I try to understand what is occurring the Boston Home Foreclosure market and documenting everything I learn along the way.
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