Types of Foreclosure and How to Avoid Them!

To understand the types of foreclosure available to lenders to help them legally collect delinquent money owed to a mortgage, you must first know and understand what foreclosure means.

A foreclosure or a property that has been foreclosed on by a lender is a legal proceeding or forced sale of real estate (usually at an auction) to pay off a loan in which the owner of the property has defaulted or gotten seriously behind in payments. If you are behind in your mortgage payments, the lender has the legal right to foreclose on the property to allow them the opportunity to receive the money owed to them.

Lenders have two choices of foreclosure they can use to receive the money owed to them from a debtor. Click on each of the types of foreclosure below in order to read more about the two types.

Another term to help you understand foreclosure is default. Default is the failure to execute a legal duty. Here's an example to help you better understand. A default on a mortgage occurs when you fail to make your loan payments on time, or if you fail to maintain adequate insurance or violate some other provision of the legal agreement you signed when you bought the property.

Once you are behind on your payments, it's sometimes very difficult to catch up while still making regular payments on your mortgage. The worse thing you can do is to NOT contact your lender and discuss your problems. If you have a legitimate hardship, most lenders will be willing to work with you.  

Non-Judicial Foreclosure. This type of foreclosure is one that can be completed outside the court system.

Judicial Foreclosure. This of the types of foreclosure is one that results from a court action.