Hays Law Center: All about Foreclosure by Hays Law Center

Nov. 4, 2010 - PRLog -- Hays Law Center: All about Foreclosure by Hays Law Center

Hays Law Center explains that when a loan or mortgage on a property has become past due, a foreclosure is typically the means by which a bank or other lender can reclaim the property from the borrower. Hays Law Center has found that normally when a person borrows money to purchase physical property like a house, car or boat, the person agrees with the lender to make timely payments of a specified amount on a certain schedule. Depending upon state law, Hays Law Center finds that lenders can initiate foreclosures after one or more missed payments.

There are multiple ways in which foreclosures can be initiated. A bank can first notify the borrower that his loan is in default and the property will be seized by a certain date. Hays Law Center goes on to explain that this gives the borrower a chance to make up the payments, or to sell the property in order to cash out any equity. According to Hays Law Center, in other cases, the lender may merely seize the property, called a deed in lieu of foreclosure. By reclaiming the property, the lender then has the right to sell the property, often at a reduced price. The lender’s attempt is to get back the money still owed on the property, so foreclosure sales or auctions may offer the general property at below market value.

Hays Law Center recalls that a deed in lieu of foreclosure, or strict foreclosures as they are often called, is possibly the worst alternative for borrowers. Some states do have laws that entitle borrowers to the equity they own in the property. If the lender makes a profit on the sale, Hays Law Center has learned that the borrower may get to keep a portion of the profit; however, the lender isn’t under obligation to sell the money at a profit. The lender may merely want to recap his/her losses quickly.

Foreclosures that offer notification of default to lenders are of the most advantage to the borrower. Hays Law Center points out that The borrower might be able to come up with the money, or sell the property at a profit or above market value. Alternately, at least the borrower has the opportunity to pay the debt instead of having the debt foreclosed, which is detrimental to credit rating.

Hays Law Center highlights that people facing foreclosures can temporarily halt proceedings by filing for bankruptcy. This gives the borrower an opportunity to renegotiate with the lender in hopes of an easier payment schedule. Based on prior knowledge, Hays Law Center sees that depending upon the length of bankruptcy proceedings, the borrower may have to pay several months of back payments in order to make good on the debt.
Foreclosures can basically get challenging when more than one person claims ownership to property. Hays Law Center believes that a lender must notify all owners of intent to foreclose to give all owners an equal opportunity to pay payments owed prior to seizure or sale of the property. Most states actually have laws specifying how much time joint owners get before the property can be seized or sold.

Some people can make a profit by purchasing real estate or other property that is sold at foreclosure sales. In fact, there are numerous infomercials that suggest purchasing at foreclosures and auctions will translate to instant money. These claims need to be taken with a grain of salt. Auctions for foreclosed properties are often well attended and can be quite competitive.

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