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ARTICLE: The Basics of Foreclosure


Date Added: 2007-05-25
According to the law, a foreclosure means cutting off a mortgagor from their right to redeem the property they borrowed money from a lender for. This happens when the mortgagor is unable to meet the terms of the contract made when they borrowed money from a lender and put up the real property as security for the mortgage loan. Many people think that banks give out mortgages but in truth they only loan money and use the mortgage as security for the loan.
First let's talk about what causes people to go into foreclosure? The two main causes of foreclose are divorce and and failed businesses. Other reasons may be job problems like layoffs. When these things happen people get behind on their monthly mortgage payments. If they are unable to pay for the house the house goes into foreclosure where a foreclosure sale is scheduled. The first stage of foreclosure is usually referred to as Lis Pendens. In Latin, this means "pending legal action". During the first stage of foreclosure includes summons sent to the residence of the borrower. After this the attorney will go the county clerk's office and file papers.

After this, the papers filed will become a public record. A public notice is than printed in the classified section of the newspaper. If no one buys the home at the sale, the bank becomes the new official owner of the property. The things about banks is that they don't want to own property. Banks are institutions of money, not real estate. At this point, the bank is willing to sale the home for a good deal.
About the author:
By Chad Stroh



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