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What is it? A foreclosure house is one for which the owner has legally lost property rights over due to failure to repay mortgage debt when the property has been used as a deed of trust to acquire the loan. Thus the house becomes property of the court and is subjected to a forced sale by means of an auction. The auction is announced and advertised at the courthouse and in leading newspapers. Anybody interested in bargaining for this piece of property can attend the auction including the financing company on whose name the borrowed money is indebted to. The financer also has the option of using the note stating the pending payment to bid for the foreclosure property. A type of foreclosure called foreclosure by power of sale is one in which, the power to auction off the mortgaged property is solely in the hands of the financer and is free of judicial supervision or intervention. The financer may also grant the mortgagor extra time to repay the borrowed cash by modifying the mortgage statement legally. The borrower will have to repay the debt within the grace time including extra expenses and interest. The mortgager also has the option of signing the foreclosure house off to the financer to avoid going through a foreclosure. This may also provide the mortgagor an opportunity to purchase a house after a period of a few years provided his credit has been flawless. Such a purchase will however include a high rate of interest to be paid.
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