Understand 2 type of Foreclosure in USA

In the United States, there are two types of foreclosure in most common law states. The use of "action rather than isolated" or "severe penalty", the note holder of claim to the title and possession of the property in full satisfaction of the debt, usually on contract. In this procedure, known as an exception to (or can be distinguished as "judicial redemption"), the property be sold at the sheriff or other officer of the court. Many states require this type of proceeding in some or all cases of exclusion, to protect the debtor from any property in May, if the value of the debt is closed substantially below the market value of immovable property (this also discourages strategic isolation). In this exception, the sheriff as a result of the writing of the Contractor at the auction. Banks and other institutional donors to bid the amount owed on the sale, but there are a number of other factors affecting supply in May, and at any other stage, the buyer obtains title to the property of the lender in exchange.

Other States have not adopted the trial, in which the mortgagee, or more commonly the mortgagee or counsel for the administrators appointed agent, gives the debtor a notice of default and the mortgagee of the intention to sell the property in accordance with the legislation of that State. This type of lock is commonly called "legal" and "non-judicial" disposition, rather than legal. "With this" power of sale "type of insulation, if the debtor fails to correct the default, or use other lawful means (such as filing for bankruptcy which provides a temporary residence in the automatic exclusion from the proceedings) to stop the sale of the mortgage or its representative will conduct the public auction in the same manner as in the sheriff's auction described above. In the high price at auction is the owner of the property free of any interest to the former owner of the property, but may be occupied mortgage exceeds the mortgage is closed (for example, a person ' S mortgage, unpaid taxes, etc.). Other measures, such as the expulsion of in May, it is necessary to obtain possession of the premises.

Other forms of exclusion are low, because their limited availability. In strict foreclosure, which is, in some states, including Connecticut, New Hampshire and Vermont, suit is transferred to the mortgagee and if successful, the court orders the debtor to pay the mortgage payment mortgage at a certain time period. If the debtor is not a mortgage holder gets the title, are not obliged to sell it. This type of loan is usually available only when the value of assets less than the debt ( "under water"). Historically, the isolation is strictly an original way to recovery.