Power changes hands in Washington, with big implications for housing.
What is a judicial foreclosure?
Foreclosure is the process of taking a mortgaged property when the homeowner fails to keep up his or her mortgage payment. A judicial foreclosure refers to when the foreclosure goes through the court system, and there is a court order for the property to be sold to pay the debt.
If a homeowner falls significantly behind on mortgage payments, enough to default on the loan, the bank likely will repossess the home and sell it to recoup its losses. This process can occur either with or without the intervention of the court, although in some states, foreclosures always go through the court system.
Foreclosure proceedings typically start after the third missed mortgage payment. At that point, the mortgage company will send a letter informing the homeowner that he or she must bring the loan current or the company will require that the owner pay the entire balance due immediately.
After 30 days, the mortgage company will initiate foreclosure proceedings with the court. Once the owner receives notice of this, he or she typically has from 20 to 30 days to file an answer with the court. If the homeowner doesn’t respond, the mortgage company automatically receives a default judgment against the owner, and the court will grant a judgment of foreclosure that allows the bank to sell the property.
Facing foreclosure? Here’s how to avoid it.
Judicial foreclosure example
Missing one payment won’t allow the bank to foreclose on a home and sell it to pay the debt to the company. The homeowner must miss at least three payments, and after this it can still take months for the entire foreclosure process to wind its way through the court system. If the owner misses three payments, the court likely will send what’s called a “notice of acceleration.” And if the past-due amounts aren’t paid, the mortgage company likely will obtain a judgment from the court allowing it to take back the home.