A foreclosure is a treatment to remove an individual's rights to own and have ownership of genuine residential or commercial property, also referred to as property. After foreclosure, the individual will no longer own the residential or commercial property and will be required to eliminate all his/her belongings and move.

A foreclosure is started by an individual, or business, holding a lien on genuine residential or commercial property. An owner will typically give a lien upon his/her real residential or commercial property as security for repayment of a financial obligation. Typically, a house owner offers a lien on his or her house to the bank as security for payment of a loan to the bank. In many cases, a lien can be put on real residential or commercial property without the owner's permission where cash is owed that has not been paid. For instance, a carpenter can submit a building and construction lien for work done on a house, the IRS can file a lien for unpaid taxes, and a creditor can submit a lien for an unpaid judgment.

There are four typical kinds of liens on real residential or commercial property: a trust deed, a mortgage, a land sale contract and an involuntary lien. Foreclosure procedures vary depending on the kind of lien involved.

Trust Deeds

A trust deed is a special kind of mortgage given by the owner of the genuine residential or commercial property to a third party, called a trustee, who holds a power of sale for the residential or commercial property for the advantage of a creditor (such as a lending institution) till the financial obligation is paid back. Banks and other lenders typically use a trust deed.

A trust deed can be foreclosed by a lawsuit in the circuit court of the county where the residential or commercial property is located. This kind of foreclosure is referred to as a judicial foreclosure and is now common for residential loans in Oregon. The party holding the lien asks the court for a judgment versus the owner for the unsettled amount of the debt together with attorney charges and foreclosure expenses. If the owner does not pay that total to the holder of the lien, then the constable of that county will auction off the residential or commercial property to the greatest bidder for money. If there is not adequate cash received by the constable to pay the judgment in complete, then the holder of the lien can gather what is still owed, called a deficiency, from the owner. The owner likewise should move out immediately.

If the foreclosure is on the owner's home or the house of the owner's partner or kid, then the owner merely loses the residential or commercial property but does not have to pay a deficiency. However, anyone else who ensured payment of the debt will have to pay the shortage.

After the sale, the owner has 180 days to buy the residential or commercial property back from the purchaser for a quantity equivalent to the auction price paid, plus interest and anything the purchaser had to spend for such products as taxes and maintenance. This is referred to as a right of redemption.

In order to redeem the residential or commercial property, the owner must serve the buyer of the residential or commercial property with a notice of owner's desire to redeem the residential or commercial property. The notice should specify the date and time the owner will pay to the sheriff and the redemption quantity. The notice of redemption need to be served on the purchaser no more than 30 days and no less than 2 week before the payment date the owner defines in the notification of redemption.

The holder of a trust deed can foreclose without going to court, too, through a foreclosure by "ad and sale" or non-judicial foreclosure. The trustee mails a notification of default and a "notice of home loss danger" to the owner (and any other individuals holding an interest in the residential or commercial property) of the amount of the debt and the sale date, time and location, and publishes notice of the sale in a newspaper. The trustee then auctions off the residential or commercial property to please the financial obligation, the lawyer costs and foreclosure expenses. Following the sale, the owner should move out of the residential or commercial property within 10 days of the sale. This foreclosure process takes roughly 140 days.

In this kind of foreclosure of a trust deed, the owner has no right of redemption after the sale. However, when the foreclosure is by "ad and sale," the owner does not have to pay a deficiency, either, if the residential or commercial property is home. In addition, the owner can stop the foreclosure by paying all delinquent payments together with trustee's and lawyer charges and costs at any time approximately 5 days before the scheduled sale date. The trustee will then submit a notification in the county records showing that the foreclosure proceeding has actually ended.

Foreclosure often prevents lien holders from seeking a shortage versus the debtor. This protection can be lost if the debtor elects to do a short sale to prevent the foreclosure. It is very important to speak with an attorney before doing a short sale.

Mortgages

A mortgage resembles a trust deed but does not include a 3rd party trustee. With a mortgage, the owner provides a lien on the residential or commercial property as collateral for the debt.

A can be foreclosed by filing a lawsuit in the circuit court of the county in which the residential or commercial property lies. The foreclosure is managed in the same way in which a court foreclosure of a trust deed is handled. The only difference is that there is no right to collect a shortage from the owner following foreclosure, if the mortgage was provided as security to the seller of the residential or commercial property, or if the mortgage was provided to a bank or other lender for a debt of less than $50,000, and the cash was utilized to pay for the residential or commercial property.

Land Sale Contracts

A 3rd kind of lien is a land sale contract. The land sale agreement is an agreement in between the seller and purchaser of real residential or commercial property. The seller consents to provide the buyer a deed to the residential or commercial property once the purchase rate has been paid. It is very crucial to carefully check out a land sale agreement because the rights of the parties might vary greatly depending upon the phrasing of the contract.

The seller under a land sale agreement has 3 principal foreclosure rights.

First, the seller can file a claim in the circuit court of the county where the residential or commercial property lies requesting the unsettled balance of the contract together with lawyer fees and foreclosure expenses. If the seller's case is effective, the sheriff will then conduct a public auction for cash. As with court foreclosure of a trust deed, if there is not sufficient cash to pay the judgment, the buyer is accountable for paying the difference to the seller. The buyer likewise should instantly vacate the residential or commercial property after foreclosure. Unlike a court foreclosure of a trust deed, nevertheless, the buyer has no right to purchase the residential or commercial property back after foreclosure.

The seller can choose instead to file a lawsuit in the county where the residential or commercial property is, to get rid of the purchaser's interest in the residential or commercial property. This is called strict foreclosure. In a strict foreclosure action, the seller gets the residential or commercial property back and the buyer need to pay to the seller all of the seller's attorney costs and foreclosure costs. The purchaser is not responsible for a shortage other than attorney costs and foreclosure costs but has no right to buy the residential or commercial property back either.

The final foreclosure option is understood as forfeit. It resembles a foreclosure by advertisement and sale of a trust deed. Here, the seller sends out notice to the purchaser and other parties having an interest in the residential or commercial property, discussing the amount of the financial obligation and a forfeit date. If the buyer does absolutely nothing, the buyer's interest in the residential or commercial property will be gotten rid of, and the purchaser should instantly move out of the residential or commercial property. Until the date of the forfeiture, however, the buyer has the right stop the forfeiture by comprising the back payments together with lawyer costs and forfeiture costs. The seller will then submit a notice in the county records revealing that the loss proceeding has ended.

Liens on Residential Or Commercial Property without the Owner's Consent

The last category of liens is those that are positioned versus the residential or commercial property without the owner's approval. As described above, those can include liens filed by workers on the residential or commercial property, liens filed for unpaid taxes and liens submitted by financial institutions holding judgments versus the owner. Each of those liens has their own special procedures for foreclosure. In many cases, nevertheless, the outcome is the same: the sheriff of the county where the residential or commercial property is situated will hold a public auction and sell the residential or commercial property to the greatest bidder for money. If the cash is not adequate to pay the amount of the debt, the individual who owes the cash secured by the lien will be accountable for the distinction. With certain liens, the owner might have the right to buy back the residential or commercial property after the sale.