Foreclosure law is a legal process which includes on one side borrower of the money and on the other side the lender of the money. This law provides means for mortgage lender to take into a possession and sell a house if borrower doesn’t pay his mortgage regularly. Lender of the money, in this case the bank, has the right to sell the house to settle a debt. If the debt is bigger than the price of the house, the borrower must pay the difference and he has to leave the house.
To understand better foreclosure law, it is desirable to know how the mortgage works. When a homeowner wants to purchase a new house or if he wants to make some improvements on the home, he usually goes to a bank and seeks a loan for that purpose. On both cases bank lends him the money and he is required to sign a mortgage documents giving the bank security interest in the house for special info . When we simplify this subject: as long as the homeowner pays the loan regularly he won’t have problems, but when the payments of the loan stop bank has the right trough foreclosure to settle its debt.
This law is different in each state in United States, the end result is the same, the borrower loses all rights on his house. But there are means to stop foreclosure. One of them is that borrower pays the loan fully, before the bank sell the house on foreclosure sale. This will immediately eliminate the foreclosure.
Monica Zent on Foreclosure Law
Some states provide for borrowers to pay only the missed payments without any fines said that the borrowers don’t come into this situation without reason and they usually don’t have financial means to pay mortgage. These people maybe still have the chance to keep their homes through forbearance. This means that lender agrees to suspend loan payments for a certain amount of time. It can be very useful for a borrower to have some extra time if he is out of work temporarily.