Lowell is a city in the Middlesex County in the Commonwealth of Massachusetts; foreclosure is the legal process through which lending entities use to get payments outstanding from defaulting borrowers who due to some reasons have stopped making their mortgage monthly payments. It is possible to have more than one lender foreclosing on the property simultaneously; however the primary holder or the first mortgagee is the one who receives payments prior to the others.
Types of foreclosures
There are two types of foreclosures namely judicial and non-judicial foreclosures; judicial is conducted by the sheriff. The property is auctioned and sold to the highest bidder; the lender places the opening bid. However the lender must first obtain a court order before foreclosing. The non-judicial foreclosure is the one requires no court intervention to take place as the power of sale clause in the mortgage preauthorizes the sale of the property in the event that the borrower defaults.
Risks of foreclosure to the borrower
Foreclosure is devastating event to any borrower therefore it is highly advisable to seek immediate counseling from a housing counselor and engage in negotiations with to your lender as soon as you are start experiencing difficulties when meeting your mortgage payments. The risks can also be seen as disadvantages and they may include the following:
You lose your home: taking out a loan against your house or buying a house with a loan, gives your lender a legal claim to your house and once you delinquent the lender may decide to foreclose on your home. It will be very painful to lose your house especially where it was your primary residence.
Credit fallout: definitely if you are a victim of a foreclosure you will be regarded as high risk customer/client by most of the lenders therefore even those willing to offer you credit will be at a higher cost because creditor they will feel less likely to receive payments from you.
Tax bills: foreclosure may include some form of debt forgiveness for instance where you may find that the current market value of the house is less than the amount you owe and you agree with your lender to redeem your house at that price; according to the IRS that is an income to you as a borrower is a taxable income.
Difficulties in buying a new home: victims of a foreclosure find it hard to raise the down payments or the credit score required in order to obtain another mortgage, most lenders and mortgage insurers such as Fannie Mae do not lend to persons with a foreclosure in the last 5 years.
Lowell ordinances
These ordinances are meant to protect and preserve public safety, security and quiet enjoyment for the occupants, abutters and neighborhoods by requiring: all residents, commercial and industrial property owners, lenders, trustees and the service companies to properly maintain vacant and/or foreclosed properties and regulating the maintenance of vacant and the foreclosing residential, commercial, and industrial properties so as to prevent impaired and unsecured properties all this efforts so as to avoid fallout in values of the properties in Lowell.
Sources
https://support.propertyradar.com/hc/en/-us/articles/2014172910-types-of-foreclosure
https://homeguides.sfgate.com/disadvantages-foreclosures.1420.html