The primary function of a judicial foreclosure is to provide a legal process through which a mortgage lender is able to gain full ownership of real estate when the borrower defaults on the underlying loan. Judicial foreclosure also permits the borrower the opportunity to defend the lender’s attempt to regain full ownership of real estate. Here is what you need to understand in terms of judicial foreclosures.
Commencing a Foreclosure Lawsuit
The formal foreclosure process commences when a mortgage lender files a petition in court. The petition sets forth the essentially facts of the matter, including that the borrower is in default on mortgage payments in contravention of the terms of the loan agreement. The petition requests that the court permit the property to be foreclosed upon and full title to the real estate conveyed to the mortgage lender.
Right of Redemption
Foreclosure laws include what is known as a right of redemption. A right of redemption permits the borrower the ability to pay off the amount outstanding on the loan, together with interest and other costs, in the aftermath of a foreclosure judgment. Foreclosure laws set forth a specific time frame during which the borrower has the ability to exercise the right of redemption.
The time frame in which a mortgage lender elects to pursue a foreclosure lawsuit, and the amount of time the lawsuit pends, varies from one case to another. Some mortgage lenders initiate foreclosure proceedings when a borrower falls approximately three recurring payments behind. Others are more forgiving and may wait a bit longer.
The typical foreclosure lawsuit itself on average takes approximately 60 to 90 days from the filing of a petition to judgment. The amount of time expended during the actual lawsuit varies depending on the unique facts and circumstances of a particular case.
As noted before, the redemption period follows the judgment. The amount of time a borrower has to exercise a right of redemption varies from one state to another. In some states the period is as long as a year. In others, it is shorter. The lender can obtain a waiver of the redemption period from the borrower and proceed to sell the property (usually at an auction) at an earlier date.
Foreclosure laws and proceedings are highly complex. A person facing the prospect of a foreclosure on a residential or commercial property typically is best served by retaining the services of an experienced attorney. There are lawyers who focus their practices in the area of foreclosure law.