In a nonjudicial foreclosure, the mortgage holder is allowed to initiate a foreclosure action without a court order. In a judicial foreclosure, the lienholder must file a lawsuit to get a court order before they can sell the property. There are two main types of foreclosures: judicial and nonjudicial. What Is Foreclosure?įoreclosure is the legal process lenders use to repossess real estate when a borrower defaults on a home loan. Even though the lienholders at the bottom of the list are able to initiate a foreclosure, they may not want to do it because of how little they’d get paid from the sale. In a foreclosure sale, the lienholders will generally get paid in that same order. A property’s liens are listed in the land records in the order they were filed. For example, a mortgage default will lead to a mortgage foreclosure, while failure to pay property taxes will lead to a tax foreclosure sale. Properties often have more than one lien filed against them, and any one of those lienholders can foreclose on the property owner.
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