Deficiency Judgment Foreclosure - Know Its Different Forms
A lender can get the difference of amount on the foreclosed property from the borrower by receiving a deficiency judgment order issued by the court
. By issuing this order, the court empowers the lender to pull in the money due on the property from the borrower. Through this deficiency judgment order, the borrower becomes lawfully liable to gather the difference of amount he/she owes to the lender and money that the foreclosure has accumulated.
Variety of Deficiency Judgment Foreclosures:
During a foreclosure, the lender holds a public auction of the property after payment defaults of the borrower on the property. There are three types of foreclosures for deficiency judgment:
With court's permit to trade property, the judicial foreclosure takes place. But, court sanctions this foreclosure only when mortgage is the real debt device for the property. In judicial foreclosure, the court sends mortgage-issuing notice to the borrower. In case of delayed or non-response, lender can accelerate the loan against the borrower, which in turn will let the lender demand full amount of the loan and extra costs straightaway. When the questionable borrower fails to make payment of this amount too, court gives the lender license for inducting the process of mortgage deficiency judgment against the borrower.
Statutory or non-judicial foreclosure does not require court's supervision but follow the same routine of demanding money from the borrower. In statutory foreclosure, if the borrower defaults on loan, lender issues a Notice of Default (NOD) to notify the trustee because the contact of the property involves a deed of trust not a mortgage. For such properties, the parties (lender, borrower, and trustee/s) sign a contract where the third party turns the warrantor for protecting the property. After payment default of the borrower, lender holds an auction to sell the property conducted by the lender him/herself or by the trustee. After the sale of the property, an affidavit of foreclosure may have to be filed, again creating a mortgage deficiency judgment against the mortgagee.
A foreclosure becomes a strict foreclosure when the court authorizes the title of the property to the lender without auction or sale upon default payment of the borrower. It entitles the lender to move to the court and to get an order for the borrower to pay off the loan when he defaults. In case, borrower fails to pay the amount on a set date, the court merely render the property to the lender and issue mortgage deficiency judgment against the mortgagee. Therefore, once the lender receives a strict foreclosure, borrower is left with no other choice than making payment of the deficiency.
As soon as you receive a deficiency judgment order, contact a reputed negotiation company. Your delayed decision not only can take the house away from you but also can make you pay a lump sum. Let a professional judgment deficiency negotiation company take over the charge of dealing with the lenders and they will certainly provide you with the best deal.
by: Russell A.
What Is Passive Income And Why Is It Key To Unlimited Wealth? Reverse Equity Mortgage - Who Is Eligible Creating Unlimited Wealth And Freedom Through Passive Income Reverse Equity Mortgage - How Much Money Do I Get Reverse Equity Mortgage - Answers To Senior Retirement Questions Comparing The Two Main Types Of Passive Income 4 Simple And Inexpensive Strategies To Create Passive Cash Flow Secrets For Developing Multiple Streams Of Passive Cash Flow Finding The Golden Key To Unlimited Wealth Remortgage Deals: Top 5 Tips For Choosing A Remortgage Deal Are Fha Loans The Replacement For Subprime Mortgage Lending? Can You Still Refinance Your Mortgage If You Have Bad Credit? How To Avail Financial Services When You Need One