What are Foreclosure Laws?

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  • Written By: Renee Booker
  • Edited By: E. E. Hubbard
  • Last Modified Date: 21 March 2020
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Foreclosure laws will vary from country to country and even from state to state within a country. In general, foreclosure laws address situations where a property owner has defaulted on the payment of either the mortgage or taxes. The purpose of foreclosure laws is to ensure that the process of taking the property away from the current residents is accomplished in an orderly and legal manner.

Laws regarding the purchase of property may vary from jurisdiction to jurisdiction. In many countries, such as most Central American countries, a buyer must have the funds to purchase a home as bank funding and mortgages are not common. In other areas of the world, such as the United States and many European countries, the majority of home buyers purchase a home by obtaining a mortgage. The amount borrowed by the buyer must then be repaid in monthly installments. When a borrower falls behind on the monthly payments, he or she will eventually be considered in default, at which time the lender may initiate foreclosure proceedings.

In addition to defaulting on a mortgage, non-payment of property taxes may trigger foreclosure proceedings by the state or local taxing authority. Tax liens, in fact, generally take precedence over all other claims to the property. Regardless of the reason, most jurisdictions have very specific foreclosure laws that dictate when the proceedings may be initiated, what rights the property owner has, and what happens to the property after foreclosure among other things.


Within the United States, each state has its own foreclosure laws; however, some of the basic rights and procedures are universal among the states. Proper notice to the home owner is always included in state foreclosure laws. The purpose of notice is to ensure that the homeowner is aware of the legal proceedings and has an opportunity to cure the default or defend the foreclosure lawsuit.

In addition to notice, time frames and whether or not the property owner has a right to redemption are commonly defined in state foreclosure statutes. In order to afford homeowners the time to cure the default or defend the lawsuit, most states require a certain time period to pass before the foreclosure can be finalized. Along the same lines, many states allow homeowners the right to redeem the property even after the foreclosure is final. If a right to redemption exists, it will be found within the jurisdiction's foreclosure laws.

Once a property has legally been foreclosed on, it is usually listed for sale at a sheriff's sale or auction. The procedures for listing and selling the property can also be found in the foreclosure statutes. In some cases, a property owner has until the day of the sale to redeem the property by paying the taxes due or bringing the mortgage payments current.


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