The word? Mortgage’s trial? It is a legal term that has frightening connotations for many Americans. Most Americans rely on taking out a mortgage to buy their home and work hard to pay it off. Owning your own home is not just a dream for future financial security, it is a desire for your family to have a comfortable and secure life. As a result, their homes are mostly purchased with the help of financial lenders like banks or mortgage companies.

However, lenders do not lend money without being relatively sure that they will get it back. In other words, they want some assurance that the loan will be repaid. Having a high-paying job isn’t enough to convince lenders that a large loan, like a mortgage, will be paid off. Therefore, they require an asset to be held as collateral in the event that a borrower defaults on a loan. This means that if the loan is not paid, the collateral they hold can be taken to cover the outstanding debt.

Typically, for a mortgage, the property itself is taken as collateral and if the borrower fails to keep up the payments to the lender, the home can be foreclosed on. The lender can obtain a court order that gives legal permission to put a property into foreclosure. Sometimes all it takes to be foreclosed on is not making your payments by the due date.

However, a court of equity can enter a judgment in favor of the borrower if the loan payments are brought up to date so that the lender cannot foreclose on your home. Under these circumstances, regardless of the lender’s wishes, the loan will be able to keep your home.

The mortgage or deed of trust between the lender and the borrower is a legally binding contract. Under the terms of the contract, the lender agrees to lend the borrower a specific amount of money to purchase a specific property. In turn, the borrower agrees to repay this money and, to this end, signs a promissory note. This contract will also explain that a lien will be placed on the subject property that gives the lender the right to repossess the property if repayments are not made in accordance with the agreed terms.

Whenever a property is purchased with a mortgage, the contract between the mortgagee and the debtor will include the right of execution in the event of non-payment by the borrower.

All US states allow the option of judicial foreclosure which allows a property to be sold if the borrower defaults on the loan payments. The money from the sale of the property is first used to pay off the loan balance. Any funds left over from the sale are then paid to any other lien holders on the property. Finally, if there is any money left over from the sale of the property, it is paid to the borrower. These foreclosure transactions take place under the watchful eye of the legal system.

However, a clause is sometimes added to a mortgage contract that specifies? Execution by selling power. This gives the lender the ability to foreclose without the need to proceed through the courts. Consequently, the foreclosure process in these circumstances is much faster than judicial foreclosure.