Foreclosure is, according to Real Estate Wiki, when a homeowner is no longer able to pay the monthly mortgage payments, and a legal procedure or foreclosure, whereby the property used as security for a debt is sold to satisfy the debt.
There are basically three types of foreclosure proceedings, judicial foreclosure, non-judicial foreclosure and strict foreclosure. The judicial foreclosure is used in those states where no “power of sale” is included in the mortgage document. It provides that upon the required public notice the property can be sold by court order.
In some states non-judicial foreclosure is accepted when a power of sale is contained in a mortgage or trust deed. In this case, a lender has the right to sell the mortgaged property upon default and is not required to spend the time and money involved in a court foreclosure suit. At the same time, a borrower’s redemption time is considerably shortened by the elimination of the statutory redemption period sometimes granted in a judicial process. The notice of default is recorded by the trustee at the county recorder’s office within the designated jurisdiction's time to give notice to the public of the upcoming auction.
For more information on how foreclosures work visit Real Estate Wiki.
