Types of Foreclosure

The mortgage holder has complete control over when he or she wants to initiate foreclosure as long as its within the time specified in the lending documents, typically some time after the mortgage holder stopped his or her mortgage payments and the bank has put him or her in default. The key to understanding foreclosure is that the owner can initiate the process regardless whether they still have money in the bank. Sometimes foreclosure is a good idea - dont chase good money after bad!

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Within the United States there are several categories of foreclosure situations. Judicial Sale and By Power of Sale.

Foreclosure by judicial homes, also known as Judicial Foreclosure is required in a lot of states, The bank is involved in the sale of the said property under the guidance of a judge, with the money from the sale of the property first to satisfy the bank; then other lien holders; and, finally, the holder/old owner of the property if any addition moeny are left. All parties including the bank, lender, and the future bidder of the auction must be notified of the foreclosure sale.

Foreclosure by power of sale, sometimes a power of sale clause is included in the mortgage contract. This process is identified by the sale of the home by the mortgage holder without court or judge supervision. It is usually faster, cheaper, and less hassle than by judicial sale. For the buyer a foreclosed property,

this method can often be the cheapest way to buy a home despite popular beliefs.

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