Foreclosure Procedure

Foreclosure Procedure in the United States

Practical Information

Note: Some of this information was last updated in 1982

The legal action taken by a lawyer on behalf of a creditor against a debtor who has defaulted in payment on a secured debt or mortgage (in U.S. law). The first steps in the foreclosure proceeding are (1) the preparation of the notice of lis pendens (in U.S. law); (2) the preparation of the summons (in U.S. law) and complaint (in U.S. law) , which are prepared like the summons and complaint in any civil action. Because the foreclosure action generally has numerous defendants, the secretary usually types the summons instead of using a printed form. Parties to a foreclosure action.

(Revised by Ann De Vries)

Judical Foreclosure

The procedures surrounding the foreclosure process involve numerous steps, each of which must adhere to strict statutory guidelines

In a judicial foreclosure state, a loan is secured by a mortgage and the foreclosing party must file a complaint and summons that begin a lawsuit requesting that the court order a foreclosure. In a non-judicial state, a loan is secured by a mortgage that contains a power of
sale clause, and the lender may begin the foreclosure process without a court order.

Prior to 2011, the volume of mortgage loan delinquencies and defaults over the previous few years had been at historically high levels, had created additional demand for default processing services, and had served as a growth catalyst for the mortgage default processing market. However, beginning in late 2010, as a result of regulatory and marketplace dynamics, many large loan servicers began to slow down and reduce the referral of defaulted files for
foreclosure processing while they reviewed their processes and practices

Fees

Government sponsored entities, including Fannie Mae and Freddie Mac, monitor and establish guidelines that are generally accepted by mortgage lending and mortgage servicing firms nationwide for the per file case fees to be paid to their counsel. Thus, law firm customers receive a fixed fee per file from their clients.

If the law firm’s client proceeds to eviction or chooses to litigate, or if the borrower files for bankruptcy, and in some instances when the time to process the file is prolonged, the firm receives additional fixed fees per case file. In California, foreclosures may be undertaken by non-attorneys.

What is Foreclosure Procedure?

For a meaning of it, read Foreclosure Procedure in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to Foreclosure Procedure.


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