Question:

How are mortgage foreclosure procedures enacted?

Answer:

There is an argument as how is title transferred according to mortgage foreclosure procedures. Three approaches are considered valid:

  1. The borrower remains in title of the mortgage while paying the loan off.
  2. The mortgagee (lender) remains in title of the property until the mortgage is fully repaid.
  3. The borrower remains in title while making regular payments; if payments are breached, the lender takes over the property according to mortgage foreclosure procedures.

Usually, should a breach in the repayment occur, the acceleration clause will require the full repayment of debt and mortgage foreclosure will begin. If the mortgage the property is being foreclosed under is not the only existing lien on the house, the priority of interests will be decided by federal and state law.

In mortgage foreclosure procedures, a mortgage can be a negotiable instrument or a security interest and will be governed by different sections of the Uniform Commercial Code.

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