I. Brokers
II. Contracts and Transfers
III. Mortgages and Foreclosure
IV. Deeds
V. Home Inspection
VI. Closing
VII. Glossary
VIII. Internet Resources

Mortgages and Foreclosure

There are a number of methods to finance a real estate transaction. The most common is a mortgage. This is a loan which transfers an interest in the land as collateral for repayment of the debt. The borrower typically pays the mortgage in installments that include both interest and principal payments. If the borrower fails to make payments, the mortgage’s owner can and will foreclose on the property. In a foreclosure, the lender declares that the entire debt is due immediately. If this is not repaid, the lender can sell the property to pay the remainder of the debt.

Foreclosure procedure depends on federal and state laws, the terms of the mortgage, and the existence of any other liens on the property. A limited amount of late payments are allowed in many states in order to avoid foreclosure, and most lenders also attempt to work extensively with borrowers in a variety of situations before going through with a foreclosure as a last resort to receive payment. If a foreclosure is threatened, a borrower should consult with an experienced real estate attorney to protect his or her interests and resolve the situation as soon as possible.

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