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How do foreclosures work?

Homeowners in Florida may be interested in understanding more about the foreclosure process. Foreclosures may be described as a mortgage holder or a third-lien holder's right to obtain ownership and sell property. When the lien is in default status, the lien holder may use the proceeds from the sale to pay off the mortgage. The law provides mortgagors with a reasonable amount of time to pay off a property in default status before it is taken away.

There are several state and federal laws in place that are designed to protect mortgagors and mortgagees from fraudulent scams or unfair practices. By law, the mortgagee is permitted to initiate the foreclosure process any time after the property enters default status. The two primary types of foreclosure include foreclosure by judicial sale and foreclosure by power of sale. Judicial sale is available in every state and is typically the process required by law.

Foreclosure by judicial sale is governed under the supervision of the court. With this type of foreclosure, the proceeds are used to satisfy the mortgage, any additional lien holders and then the mortgagor. Due to the legal nature of the court proceeding, any of the parties affected by the foreclosure must be provided with written notice. The power of sale is often described as a more expedient means to completing a foreclosure process that is not governed by judicial mandates.

Homeowners that are interested in learning more about the foreclosure process may benefit from taking their case to a lawyer. Legal counsel may be able to review the homeowner's mortgage agreement and help identify any remedies available for reaching an amicable resolution. Lawyers might be effective in helping indebted homeowners delay the process or develop a foreclosure defense.

Source: Findlaw, "Foreclosure", December 22, 2014

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