| Foreclosure law varies from state to state with | | | | In states that use mortgages, foreclosure law makes |
| regards to the exact process that must be followed in | | | | foreclosure a judicial procedure. A lender must prove |
| order for a bank or lender to foreclose on your home. | | | | to the court that the borrower has defaulted on the |
| Knowing the foreclosure law in your state can help | | | | loan, and that they, the lender, have made appropriate |
| you negotiate with your lender and perhaps avoid | | | | attempts to resolve the default with the homeowner. |
| foreclosure altogether. | | | | There is a definite sequence of events that must be |
| One of the largest differences in foreclosure law is | | | | followed as prescribed in the foreclosure law, and |
| whether a state uses mortgages or deeds of trust for | | | | knowing that sequence in your state can help you |
| real estate. "Deed of trust" is a term that's not heard | | | | understand your options in terms of resolving the issue |
| as often as mortgage, but in essence, they have the | | | | before it goes before a judge. |
| same function - they protect the lender from default | | | | In states that use a deed of trust rather than a |
| on a loan that is secured by real estate. The major | | | | mortgage, the lender must go through certain steps of |
| difference is in the process the lender must use to | | | | notification as required by foreclosure law in that state, |
| obtain the right to recover your property and sell it. | | | | but does not need judicial permission to proceed with a |
| When you sign a mortgage agreement with a lending | | | | sale or foreclosure on the property to which they hold |
| institution, you retain the deed to the property, and | | | | a deed in trust. |
| have full legal title to it - but you allow the lender to | | | | States whose foreclosure law requires judicial action |
| place a 'lien' on it. If you do not make the payments on | | | | include: Alabama, Arizona, Arkansas, Connecticut, |
| the loan as agreed upon, the lender can foreclose on | | | | Delaware, Florida, Montana, Nebraska, New Jersey, |
| the property. | | | | New Mexico, New York, North Dakota, Ohio, |
| In some states, a deed of trust takes the place of a | | | | Oklahoma, Illinois, Indiana, Iowa, Kansas, Kentucky, |
| mortgage. With a deed of trust, you give the deed to | | | | Louisiana, Maryland, Michigan, Pennsylvania, South |
| the land or property to the lender, but the lender can | | | | Carolina, South Dakota, Vermont, Washington and |
| only use or sell the property if you default on the loan. | | | | Wisconsin. |