Both mortgage (re)possession and foreclosure are quite similar, with the main differences being the treatment of any funds that exceed the amount borrowed and liability for any shortfall. In the case of mortgage possession or repossession, if the home is sold or auctioned for a price that exceeds the loan balance, those funds are returned to the consumer. If the proceeds from a mortgage possession are insufficient to cover the loan then the debtor remains liable for the balance, although in most cases this will become an unsecured debt and the mortgage company will be treated on an equitable basis with the debtor's other unsecured creditors (particularly if the debtor simultaneously or subsequently becomes bankrupt or enters into a voluntary arrangement with creditors). By contrast, in the case of foreclosure the mortgage company retains all rights to proceeds from a sale or auction but the debtor is not liable for any shortfall.
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. 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. Mortgages are formally foreclosed at auction by a licensed auction specialist.
And that search can be performed at the state, county and city levels – even the exact address and/or zip code – so that your house hunt hits the ground running. Once you start digging into the incredible foreclosure deals, each listing will be complete with asking price, exact location, number of beds / baths, property type (single-family foreclosure, etc.), available photos, tax roll information, helpful neighborhood / school district details and so much more. Indeed, we provide as much information as possible so that you can make the most informed decision possible.
In 22 states – including Florida, Illinois, and New York – judicial foreclosure is the norm, meaning the lender must go through the courts to get permission to foreclose by proving the borrower is delinquent. If the foreclosure is approved, the local sheriff auctions the property to the highest bidder to try to recoup what the bank is owed, or the bank becomes the owner and sells the property through the traditional route to recoup its loss. The entire judicial foreclosure process, from the borrower's first, missed payment through the lender's sale of the home, usually takes 480 to 700 days, according to the Mortgage Bankers Association.
This will ensure that you are not getting into a contract to purchase a home that you can’t afford. It’s important to give yourself a decent head start on the mortgage loan application process to see where you stand, as well as give yourself time to repair and/or fix any credit-related issues that might prevent you from obtaining a home loan. That’s because you need to be ready with an approved mortgage loan on the date specified in the rent-to-own contract.
A foreclosure, as in the actual act of a lender seizing a property, is typically the final step after a lengthy pre-foreclosure process, which can include several alternatives to foreclosure including many that can mediate a foreclosure's negative consequences for both the buyer and the seller. As with foreclosures, states have their own laws to handle this process.
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.
Conversely, if you decide not to buy the house – or are unable to secure financing by the end of the lease term – the option expires and you move out of the home, just as if you were renting any other property. You’ll likely forfeit any money paid up to that point, including the option money and any rent credit earned, but you won’t be under any obligation to continue renting or to buy the home.
Once you fully understand all the terms of the rent-to-own agreement -- and have had an attorney look it over and provide feedback -- it’s time to finalize the deal. Of course, signatures from both parties will be required at this time, as well as upfront payments such as the agreed-upon “option fee,” the monetary consideration that is necessary to make the rent-to-own contract binding.