how does forclosure work?

Answer 1

Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure 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, it is typically said that "the lender has foreclosed its mortgage or lien."

In the United States, there are two sorts of foreclosure in most common law states. Using a "deed in lieu of foreclosure," the bank claims the title and possession of the property back in full satisfaction of a debt, usually on contract. In the proceeding simply known as foreclosure (or, perhaps, distinguished as "judicial foreclosure"), the property is exposed to auction by the county sheriff or some other officer of the court. Many states require this latter sort of proceeding in some or all cases of foreclosure, in order to protect any equity the debtor may have in the property, in case the value of the debt being foreclosed on is substantially less than the market value of the immovable property (this also discourages strategic foreclosure). In this foreclosure, the sheriff then issues a deed to the winning bidder at auction. Banks and other institutional lenders typically bid in the amount of the owed debt at the sale, and if no other buyers step forward the lender receives title to the immovable property in return.

Answer 2

Well, it depends on which side you're looking at it from. If your own house is being foreclosed on you will receive several letters from where your home loan is from, stating that you have so many days to make a payment or your house will be foreclosed. If you choose to ignore all these letters and do nothing. You will receive a notice to vacate the premises from the Sheriff's office. Then the bank or loan company will put your house up onto a foreclosure sale. If by this time you still haven't moved out the new owner will take legal action break the lock and force you to move out...If you're buying a home that's a foreclosure you speak with a loan officer to find out how much you're approved for then look for a real estate agent and inform them that you're interested in purchasing a foreclosure. After that the rest should be cake. Hope this helped!