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The collapse, or decline, of the real estate market has made the term “foreclosure” a little more common nowadays. Foreclosure is the legal term wherein a real estate owner’s right to his property is terminated. This usually involves a public auction of the property (where it is forced to be sold) in order for the money owed to be paid on the unpaid loan (usually a mortgage debt).

There are different types of foreclosures. The most common type of foreclosure is the “non-judicial.” This type takes only a small amount of money and time and involves the owner selling the property without the supervision of the court. A non-judicial foreclosure is generally cheaper and faster as compared to the other type, the “court-ordered judicial” foreclosure.

In a foreclosure that is court-ordered, the lending company files a lawsuit asking the borrower for the real estate property to be sold under the court’s supervision. Due process is applied to the lawsuit, allowing the borrower/foreclosed owner to answer the lending company’s lawsuit and cite several legal defences. When the foreclosure lawsuit is concluded, the court will issue it’s decision, which can either be in favour of the lender or of the borrower. If the lender wins the lawsuit, the real property then is sold and the money is used to pay the foreclosing lending company. If there is still some money left from the sale of the property, it is given to the borrower. To cover all your contents go onto Towergate Insurance.

Foreclosures are a stressful situation. However, if it cannot be avoided, it is best if you know how it works so that you will be able to handle it better.