An Outline of Real Estate Foreclosure

An Outline of Real Estate Foreclosure By Hayley Bingham

Real property is often put on the line when it comes to obtaining loans. Since most creditors ask for collateral before approving loan requests, most people present their most valuable property. For ordinary people, this would have to be their house.

This can be a problem, however, when the debtor fails to keep up with his or her financial obligations. In this situation, the term real estate foreclosure slowly but decisively enters the scenario. This technical term, used by creditors, serves as an ultimatum to most debtors. Real estate foreclosure carries a threat of permanent acquisition of certain collateral to make up for the unpaid loans. Whether the property in question is a simple bungalow or an extravagant mansion doesn't matter. All that matters is that the debtor and the creditor both agreed on a mutually advantageous contract.

However, this drastic move should always come as a last resort. There are certain processes which need to be gone through before properties are foreclosed.

Before this stage is reached, a lender must first send notices and warnings to the concerned party, which is the debtor. A responsible debtor will respond to these notices by either paying portions of the debt or simply asking for payment extensions. If the debtor chooses the latter though, he or she must be sure that she has what it takes to fulfill the promise.

After that, an investigation will take place. If the debtor is deemed guilty of non payment, he or she will eventually lose property through strict foreclosure or foreclosure by sale. Either way, the nonpayer will also receive a scheduled law day.

Lastly, an order of ejectment will be sent by the court if the defaulter refuses to leave the property on or before the prescribed law date.

There are other alternatives the debtor can choose. First option would be to sell the property in question. This might save tons of money when real estate foreclosure becomes imminent. The seller will just have to make sure that the property is sold for a price that can cover the total debt. If not, then more actions can be expected from the creditors.

A person may also seek the help of mortgage assistance programs and other financial problem intervention schemes. This will be his or her gateway to temporary relief from losing the property. However, she or he will still have to pay off the debt in the near future.

Last but not least, a debtor might want to just bow down and offer the deeds to their property. If the creditor accepts the offer, the property may be lost but so will the debt. This is the best alternative for mortgage loans which have expanded due to high interest.

When it comes to real estate foreclosure, it's always best to keep one's options open. The more options a debtor has, the more chances he or she has of a financially sound real estate life.

Article Source: http://EzineArticles.com/835141   


For more information on foreclosure listings contact us www.realsupermarket.com-one stop shop for real estate support services.