Deed Trusts | Loan Enforcement & Foreclosures
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Loan Enforcement.
While it is true that trust deed investing is one of the safer ways in which to obtain an excellent return on an investment, there is always the chance that the borrower may default. When a borrower fails to pay their debt or violates the agreement, there are ways in which the investor can remedy the situation. This remedy is a process known as foreclosure, and simply put; it is the process through which the property in question is sold in order to satisfy the debt owed to the lender. (Note: Keep in mind that each state may have their own process of foreclosure, so the following information may not apply to your area).
Foreclosure.
There are two types of foreclosure processes that are used in regard to trust deed investments:
- Judicial Foreclosure – this process is the more costly method and is when the courts are utilized to foreclose on the property, and an attorney is required.
- Non-judicial Foreclosure – This process is usually simple and fast, and is the one that is commonly used for trust deed investments. A non-judicial foreclosure can be handled by just about any title company or an independent foreclosure company that has a good reputation.
When beginning the non-judicial foreclosure process, there are certain documents that the investor will be required to give the foreclosing officer. Some of these documents include the original or conformed copy of the recorded trust deed and the original note secured by the trust deed. In addition, the agent will request a written statement regarding the default amount, the date up to which the interest is paid, the due date of the payment, and the unpaid principal balance. As soon as the officer obtains all of this information, they will then be able to organize the foreclosure documents and prepare for the process.
Related posts:
- Trust Deeds | Loan Servicing
- Deed Of Trusts | Closing Escrow
- Collection and Distribution of Loan Payments
- What Secures A Trust Deed Investment ?
- Loan Documents I
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