FORECLOSURES
If a person cannot
pay cash for a parcel of real property, it is usually necessary to get a loan.
These loans are evidenced by a Promissory Note and are usually secured by either
a Mortgage or a Deed of Trust. A Mortgage or Deed of Trust is a pledge of collateral
(I.e., the real property) in order to secure repayment of the debt. If the borrower
fails to repay the debt in a timely fashion or fails to abide by any of the other
written terms of the Mortgage or Deed of Trust, then the lender can take the property
back in lieu of repayment of all or a portion of the debt. The process of reclaiming
the property is know as foreclosure. If the underlying instrument is a Mortgage,
then a judicial foreclosure is necessary in order to reclaim the property. If
the underlying instrument is a Deed of Trust, then the lender can elect between
a judicial foreclosure or a non-judicial foreclosure, also known as a Trustee
Sale. A judicial foreclosure involves commencing a lawsuit, proving a default
and getting a Judgment of Foreclosure entered. The property is then reclaimed
pursuant to a Sheriff's Sale.
* The information contained
in this message is general and should not substitute for the advice and counsel
of a licensed attorney.
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