State Method Type

Alabama Power of Sale Alaska Power of Sale Arizona Power of Sale Arkansas Power of Sale California Power of Sale Colorado Power of Sale Connecticut Power of Sale District of Columbia Judicial

Florida Power of Sale Georgia Judicial Hawaii Power of Sale Idaho Power of Sale Illinois Power of Sale Indiana Judicial Iowa Judicial Kansas Judicial Kentucky Judicial Louisiana Judicial Maine Judicial Maryland Power of Sale Massachusetts Power of Sale Michigan Power of Sale Minnesota Power of Sale Mississippi Power of Sale Missouri Power of Sale Montana Judicial Nebraska Judicial Nevada Power of Sale New Hampshire Power of Sale New Jersey Judicial New Mexico Judicial New York Judicial North Carolina Power of Sale North Dakota Judicial Ohio Judicial Oklahoma Judicial Oregon Power of Sale Pennsylvania Judicial Rhode Island Power of Sale South Carolina Judicial South Dakota Power of Sale Tennessee Power of Sale Texas Power of Sale Utah Judicial

Vermont Strict Foreclosure Virginia Power of Sale Washington Judicial West Virginia Power of Sale Wisconsin Power of Sale Wyoming Power of Sale

Again however, if an investor bids more than the "upset price," the price stipulated in the foreclosure complaint, then the amount paid at auction goes to satisfy the debt owned t the bank first, with the balance going to the property owner.

Deficiency Judgments

If a property at the foreclosure sale does not sell for the previously established price, if it sells for less and does not cover the amount stipulated in the lien or judgment. the lender may through court action. seek a deficiency judgment.

A deficiency judgment is another lien or judgment filed against the borrower. This judgment is filed to make the borrower pay the amount not collected at the time of the sale.

Webster's New World "Illustrated Encyclopedic Dictionary of Real Estate" describes a deficiency judgment as "a judgment issued when the security for a loan is insufficient to satisfy the debt upon its going in to default. It is the awarding of the amount still due on a foreclosed mortgage, after applying the sum received for the sale of the property."

The lender or bank filing a complaint with the courts for a deficiency judgment, can only demand payment for the balance owed. The lender can not file a complaint for more than what is owed.

Deed in Lieu of Foreclosure

A Deed in Lieu of Foreclosure simply means that the defaulting borrower surrenders the deed to the property, to the lender, to avoid foreclosure. In order to avoid formal proceedings, the deed is conveyed (transferred) from the borrower to the lender.

The property owner. knowing that he or she can no longer make the loan payments. and rather than struggling with this matter. gives up. That is why the deed in lieu procedure is known as a friendly foreclosure.

Years ago, a property owner in trouble may have mailed the deed and the front door keys, right to the lender. Today, with all of the laws and regulations in place, this probably couldn't happen.

There are no clauses in a mortgage or trust deed that gives the borrower the right to just mail in the deed in exchange for terminating the foreclosure process. The lender has to agree to and accept this procedure. It is completely optional.

While it is extremely rare, lenders may foreclose for any breach of the contracts, not just lack of payments. There are rare examples of lenders foreclosing because the property owner did not maintain the property accordingly.

Opportunities for investing and purchasing foreclosures occur all through the foreclosure process.

BARRON'S "Real Estate Handbook," 3rd Edition, defines foreclosure as:

"a termination of the equity of redemption of a mortgagor or the grantee in the property covered by the mortgage. Statutory foreclosure is effected without recourse to courts, but must conform to laws (statutes). Judicial foreclosure submits the process to court supervision."

and foreclosure sale, as:

"the public sale of a mortgaged property following foreclosure of the loan secured by that property. Depending on the type of foreclosure proceeding, the sale may be administered by the courts (judicial foreclosure) or by an appointed trustee (statutory foreclosure). Proceeds of the sale are used to satisfy the claims of the mortgagee primarily, with any excess going to the mortgagor."

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