Life can hit you hard, and unexpectedly sometimes. That shouldn’t mean that you can’t achieve your dream of owning your own home. You might be recovering from a bad credit due to unexpected expenditure from medical issues, bankruptcy or even a divorce. You could be in between jobs, or just an unexpected bad run. Whatever the reason, going for a traditional real estate purchase will be hard because it requires a good credit score.
The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property after the owner has failed to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that "the lender has foreclosed its mortgage or lien". If the promissory note was made with a recourse clause and if the sale does not bring enough to pay the existing balance of principal and fees, then the mortgagee can file a claim for a deficiency judgment. In many states in the United States, items included to calculate the amount of a deficiency judgment include the loan principal, accrued interest and attorney fees less the amount the lender bid at the foreclosure sale.[6]
Chinese law and mortgage practices have progressed with safeguards to prevent foreclosures as much as possible. These include mandatory secondary security, rescission (Chinese Contract Law), and maintaining accounts at the lending bank to cover any defaults without prior notice to the borrower.[43] A mortgagee may sue on a note without foreclosing, obtain a general judgment, and collect that judgment against other property of the mortgagor, without foreclosing. When all other avenues have failed a lender may seek a judgement of foreclosure. Under the "Civil Procedure Law", foreclosures should be finalized in a six-month time frame but this is dependent on several things including if the mortgager applies to the court for execution of the judgment.[44] Mortgages are formally foreclosed at auction by a licensed auction specialist.[45]
Nevertheless, in an illiquid real estate market or if real estate prices drop, the property being foreclosed could be sold for less than the remaining balance on the primary mortgage loan, and there may be no insurance to cover the loss. In this case, the court overseeing the foreclosure process may enter a deficiency judgment against the mortgagor. Deficiency judgments can be used to place a lien on the borrower's other property that obligates the mortgagor to repay the difference. It gives lender a legal right to collect the remainder of debt out of mortgagor's other assets (if any).
In other words, to challenge an allegedly wrongful foreclosure, the borrower must make legal tender of the entire remaining balance of the debt prior to the foreclosure sale. California has one of the strictest forms of this rule, in that the funds must be received by the lender before the sale. One tender attempt was held inadequate when the check arrived via FedEx on a Monday, three days after the foreclosure sale had already occurred on Friday.[20]

If you have a lease-purchase contract, you may be legally obligated to buy the property when the lease expires. This can be problematic for many reasons, especially if you aren’t able to secure a mortgage. Lease-option contracts are almost always preferable to lease-purchase contracts because they offer more flexibility and you don’t risk getting sued if you are unwilling or unable to buy the home when the lease expires.
Historically, the vast majority of judicial foreclosures have been unopposed, since most defaulting borrowers have no money to hire counsel. Therefore, the U.S. financial services industry has lobbied since the mid-19th century for faster foreclosure procedures that would not clog up state courts with uncontested cases, and would lower the cost of credit (because it must always have the cost of recovering collateral built-in).[citation needed] Lenders have also argued that taking foreclosures out of the courts is actually kinder and less traumatic to defaulting borrowers, as it avoids the in terrorem effects of being sued.[citation needed]

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For a developing country, there is a high rate of foreclosures in South Africa[citation needed] because of the privatisation of housing delivery.[neutrality is disputed] One of the biggest opponents of foreclosures is the Western Cape Anti-Eviction Campaign which sees foreclosures as unconstitutional and a particular burden on vulnerable poor populations.[52][53][undue weight? – discuss]
In some US states, particularly those where only judicial foreclosure is available, the constitutional issue of due process has affected the ability of some lenders to foreclose. In Ohio, the US federal district court for the Northern District of Ohio has dismissed numerous foreclosure actions by lenders because of the inability of the alleged lender to prove that they are the real party in interest.[9] The same happened in a Colorado district court case in June 2008.[10][11]
When the entity (in the US, typically a county sheriff or designee) auctions a foreclosed property the noteholder may set the starting price as the remaining balance on the mortgage loan. However, there are a number of issues that affect how pricing for properties is considered, including bankruptcy rulings. In a weak market, the foreclosing party may set the starting price at a lower amount if it believes the real estate securing the loan is worth less than the remaining principal of the loan. Time from notice of foreclosures to actual property sales depends on many factors, such as the method of foreclosure (judicial or non-judicial).

For a developing country, there is a high rate of foreclosures in South Africa[citation needed] because of the privatisation of housing delivery.[neutrality is disputed] One of the biggest opponents of foreclosures is the Western Cape Anti-Eviction Campaign which sees foreclosures as unconstitutional and a particular burden on vulnerable poor populations.[52][53][undue weight? – discuss]
There are two modes of foreclosure in the Philippines. A mortgagee may foreclose either judicially or extrajudicially, as governed by Rule 68 of the 1997 Revised Rules of Civil Procedure and Act. No. 3135, respectively. A judicial foreclosure is done by filing a complaint in the Regional Trial Court of the place where the property is located.[46] The judge renders judgment, ordering the mortgagor to pay the debt within a period of 90–120 days. If the debt is not paid within the said period, a foreclosure sale satisfies the judgment.[47] In an extrajudicial foreclosure, the mortgagee need not initiate an action in court but may simply file an application before the Clerk of Court to secure attendance of the Sheriff who conducts the public sale.[48] This is done pursuant to a power of sale. Note that these two modes specifically apply to real estate mortgages. Foreclosure of chattel mortgages (mortgage of movable property) are governed by Sec. 14 of Act No. 1506, which gives the mortgagee the right to sell the chattel at a public sale. It has also been held that as regards chattel mortgages, the law does not prohibit that the foreclosure sale be done privately if it is agreed upon by the parties.[49]
Rent-to-own homes will typically cost a bit more than the fair market value of other home rentals in the area. That’s because a portion of the monthly rent-to-own payment will be designated as a “rent credit” -- up to 20 percent of the monthly amount due -- will go toward the purchase of the home when the agreed-upon term expires. It’s important to make these monthly rent-to-own payments on time and as scheduled.
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