Foreclosure, Balance of a Loan, Legal Process, Mortgage Lender, Termination, Redemption
Foreclosure : Mortgage Termination
Loan Termination & Redemption Article
5 May 2012
Foreclosure Process is the legal process where a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.
A mortgage lender or other lien holder, obtains a termination of a mortgage borrower’s equitable right of redemption, either by court order or by operation of law.
Home buyers who want a good deal in real estate often think first about pursuing foreclosures.
Sellers stop making payments for a variety of reasons. Few choose to go into foreclosure voluntarily.
Often a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt.
While this equitable right exists, it is a cloud on title and the lender cannot be sure that (s)he can successfully repossess the property. Therefore, through the process of foreclosure, the lender seeks to foreclose the equitable right of redemption and take both legal and equitable title to the property in fee simple.
Via: McFarlin Law
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