Mortgage

A mortgage is the most typical home loan layout and the one which most people are knowledgeable about. With a mortgage two functions are involved, the home-owner and the bank, and a loan is done immediately from the bank to the person with the home as collateral for the loan.

If payments not necessarily made the bank may then initiate a foreclosure process, whereby they use the legal system to gain title within the home themselves. The bank would then typically re-sell your home to recover the value of the loan they primarily made to the specific. Foreclosure homes are often sold via auction, as the bank want to recover their funds as quickly as possible, and this can bring about the property being sold at a significant discount.

The key issue with property foreclosures is they can be very time consuming techniques, often taking months or even a year to clear the legal system and finally see a resolution. Many states also have mechanisms in which the property owner can get the home back well into the foreclosure process (and even after it's finished) by catching up on their payments. Together with the time and costs involved banks have been moving towards action of trust arrangements to address this.