Foreclosure is at a rise and it is due to many factors. Foreclosure is a legal process and takes place when the borrower fails to make payments to satisfy the mortgaged amount. It is usually the last resort opted by the lenders. The foreclosure proceedings are of two kinds: Judicial and Non-judicial. In Judicial foreclosure the lender has to approach the court for the purpose of enforcement of the mortgage deed by filing a foreclosure complaint, but in non-judicial foreclosure the lender is not required to file a complaint to enforce the mortgage deed, but has to follow certain other procedural requirements as prescribed by law.
Foreclosure is not something which keeps happening every other day, the instances of foreclosure is increasing day by day. Foreclosure is one of the biggest problems faced by many homeowners today. The recession has further caused an increase in the instances of foreclosure.
Foreclosure is a word which terrorizes a few and is a word which spreads happiness among many others. It is one word which spreads terror among the debtors and the same word calls for celebration among the creditors. Foreclosure is a major problem being faced by home owners in US. It is the process usually initiated by a mortgagee or lender for default in payments by mortgagor.
Foreclosure, it is one word which has given sleepless nights to many. Recession is what triggered the foreclosure crisis. Recession resulted in loss of jobs, which resulted in loss of income and due to this people failed to make payments towards their mortgages respectively. The banks/lenders were not left with too many options but to initiate foreclosure proceedings against such individual who failed to make payments. But over a period of time the banks/lenders started using foreclosure even against the borrowers who had paid their dues properly and on time. The banks/lenders started using this to their advantage. The same resulted in the emergence of mortgage scams.
People were not much aware in this regard and they relied heavily on the banks/lenders back then. Many a times the banks would have sold their loans to other financial institutions and the borrower would have no knowledge in this regard. The borrower would continue to make payments to the original lender. The original lender would not inform the borrower with regard to the transfer of loan to another financial institution. The borrower who is not aware with regard to transfer would continue making payments to the original lender. As a result the borrower would default with payments so due to be paid to the new lender. Due to this, the new lender would initiate foreclosure proceedings against such borrowers. There was an increase in the fraudulent practices by the lenders and their services respectively. The need for more laws in this area was felt. Many new statutes were formulated and enacted with an intention to govern the lending practices of financial institutions. This federal legislation has played a very important role in regulating the lending practices of these banks to a great extent.
This legislation has made people more equipped to deal with issues of foreclosure. This legislation specifies the defenses available to borrowers facing foreclosure. The many defenses so available to the aggrieved borrowers are:
The legal defenses available with regard to foreclosure are many, but the same have to be applied within the timeline prescribed by law. The time within which the aggrieved borrower is to initiate legal proceedings is crucial and it is to be kept in mind. To determine such defenses and the timelines respectively you would need attorneys well versed in this area of law.