What Is Foreclosure Exactly?
Foreclosure is that legal process which takes place when the borrower fails to pay a mortgage loan. Lenders foreclose on a property just to cover for the mortgage loan which is outstanding. It is quite ironical to note that having a property or asset in your name implies giving up the control of the asset. The fact that real estate ownership is shown in public makes the owner quite vulnerable. For instance, if a court judgement is passed on the person, then his property will be seized. The judgement becomes the lien against the real estate property. The fact of the matter is that a lawsuit passed against you can cause the loss of property.
The property may be encumbered due to resultant judgement passed against you. The property will be held by the court till you make the full payment that is outstanding. So, you won’t be allowed to mortgage or sell the property till you pay the outstanding amount. You should rather separate ownership of your properties to avoid such a situation. Henceforth, the role of Land Trust Agreement creeps in.
In order to create the land trust, you sign the land trust agreement with the chosen trustee who might be your friend, a family member, a lawyer or anyone you trust a lot. The responsibility of the trustee is to own the title of the property till you ask him to transfer your property. However, you can also fire the trustee whenever you want to. He has no right over the property. It is just a weapon to prevent foreclosure of property.
Sheriff Sale: The Foreclosure Process
When it comes to Arizona real estate and foreclosure info, you should know the foreclosure processes. The lender simply files a lawsuit when a borrower fails to clear the loan. The judge in turn orders sheriff department to initiate foreclosure. This is the standard way of foreclosure. Since the sheriff is involved in property auction, the foreclosure process is referred to as Sheriff’s sale.
Buying a property when the borrower defaults the payment is quite risky. The borrower may take his property back when he has money to complete the payment. He can pay the cost of foreclosure and the loan amount to get back the property.