Basics of Foreclosure
Understanding Foreclosure Basics
Foreclosure is a legal process where banks remove the homeowner’s right to redeem their mortgage due to their inability to continue making mortgage payments. Foreclosure is initiated by the bank when homeowners miss mortgage payments. If the homeowner is unable to bring their mortgage current, the property will be sold at a county public auction and the owner will be evicted.
- Foreclosure Timeline Diagram
The foreclosure process is outlined in an easy-to-follow diagram so that agents better understand their client’s situation. Learn More »
Banks Stand to Lose More without Alternatives
The Mortgage Bankers Association reports losses in excess of $50,000 to banks on each foreclosed home, or as much as 30 to 60 percent of the outstanding loan balance. Banks are able to save significant amounts of money if they work with homeowners that are willing to participate in a foreclosure alternative. It is important to understand that foreclosure is automatically initiated by the bank when a loan is in default. Foreclosure alternatives must be initiated by the homeowner, not the bank.
- Understanding Foreclosure Alternatives
Banks offer multiple alternatives for homeowners to prevent foreclosure. The more you know about each alternative, the better you can inform your clients. Learn More »
Two Different Systems: Judicial and Non-Judicial
States use either a judicial or non-judicial foreclosure process when a homeowner goes into default. The main differences between the two processes are listed below.
Some states use both processes, depending on the way the mortgage was written. We encourage you to become familiar with the statutes and procedures for your own state. If you need additional clarification about the information on this page, please contact SSAA for assistance or consult with an attorney who might be familiar with your state’s foreclosure laws.
- Interactive Foreclosure Law Map
Click on any state and learn about foreclosure timelines, judicial vs. non-judicial court systems, and a whole lot more. Learn More »