You have heard the term “foreclosure” but what does that really mean?
In Florida, foreclosure is the legal process, which a lender utilizes the courts to obtain a forced sale of real property pledged as security for a debt or mortgage because the borrower defaults by failing to meet the repayment terms contained in the loan agreement and promissory note. Simply stated the borrower stopped paying their mortgage and the lender is annoyed and not putting up with it anymore.
The purpose of foreclosure is either:
- To force the homeowner to start making payments on their mortgage again (bank’s 1st choice), or
- To obtain judicial sale or possession of property so the real estate can be sold and the proceeds used to reduce the loan balance.
The bank wants your money or somebody’s money to reduce the outstanding balance on their non-performing loan that is most likely upside down.