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Whether it’s because of a sudden job loss, unexpected medical bills, or another financial crisis, many homeowners have difficulty keeping up with their mortgage payments. Unfortunately, defaulting on a home loan gives the lender legal rights to take over ownership of the property. This is done through the foreclosure process. While this can be a stressful situation to face, there are ways to stop foreclosure from happening. The key is understanding which foreclosure method is being used. Below are the different types that can occur.

What Kind of Foreclosures Can Homeowners Face?

1. Judicial

A judicial foreclosure is one that’s pursued through the court system. This practice is allowed in all states and involves the lender filing a lawsuit against the homeowner to secure a deficiency judgment for the remaining loan balance. Homeowners are notified of the lawsuit and given an opportunity to stop foreclosure from happening by paying what they owe. Failure to pay their loan will result in a court order giving the lender permission to sell the property at a public auction.

2. Non-Judicial

stop foreclosuresWith a non-judicial foreclosure, lenders don’t require the court’s consent to seek ownership of a property that’s in default. Only certain states allow this procedure, including North Carolina. To be valid, the lender must comply with their state’s foreclosure laws, as well as the terms outlined in the power of sale clause within the deed of trust. Homeowners typically get one or two notices of the foreclosure action before the property goes to auction. This means there’s less time to stop foreclosure and find a way to keep the house.

3. Tax Lien

This is a foreclosure initiated by the government after a homeowner has fallen behind on their property taxes. A tax lien is placed against the property, which can be sold by the state to recover outstanding taxes. During this process, it may be offered to investors or a trust at public auction. In some states, a redemption period is granted, giving the original homeowner a chance to pay their delinquent taxes and other fees to resume ownership of the property.

 

If you’ve received notice of foreclosure, turn to C. Roland Krueger Attorney and Counselor at Law to determine the best course of action to take. He’ll explain your rights as a homeowner and decide which strategy will give you the best chance to stop foreclosure and save your property. Backed by nearly 40 years of experience, Attorney Krueger has helped countless clients throughout Davidson County, NC, achieve debt relief and regain their financial footing. Call (336) 248-8464 to schedule a consultation, or visit his website for more information on the legal matters he handles.

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