Foreclosures in Wichita Kansas

Regardless of an individual's ethnicity, social status or financial portfolio, one of the most expensive basic needs to meet is that of shelter. For some individuals or families, they may choose to live with other relatives. Other families choose to rent a house or an apartment, while others will choose to purchase their own home.

Home ownership is one of those dreams shared by many individuals and families in Wichita. Owning a home is an achievement that speaks volumes about an individual's hard work, their success in society and ultimately a place they can call their own. Purchasing a home is usually the largest investment an individual or family will make, and generally involves a mortgage.

A mortgage is a legal document entered into by the financial institution that lends the money and the person or persons to whom the money is being lent. A mortgage is a big financial commitment for most people and requires monthly payments over an extended period of time. In fact, mortgage is a French word that literally means death vow. Fulfillment of the mortgage is guaranteed in the terms of this contract and is secured by the property that is being purchased.

A typical mortgage extends over a period of 30 years with set payments being made by the homeowner each month over this length of time. Included in these payments are added costs to the principal payments that reflect the interest paid to the lending institution for the use of their money.

Unfortunately, there are no guarantees in life and change often occurs. Circumstances such as an illness, the loss of a job, divorce or other life-changing event can create an added financial burden. Sometimes these unfortunate events hinder the ability of the homeowner to meet the terms of the mortgage and result in a violation of the agreement. If payments are left unpaid for a period of time, it could lead to a foreclosure action being initiated.

What Is A Foreclosure?

Foreclosure takes place when a loan that uses "real" property as collateral is not repaid. A foreclosure is a legal action that can be initiated by a financial institution when an individual or family cannot meet the binding terms of a mortgage. The lending institution can repossess the property secured by the defaulted mortgage and the property can then be sold to other interested parties in order to recover the financial institution's investment. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien." The courts, in general oversee foreclosure.

While the foreclosure laws differ from state to state, several types of foreclosure procedure are common.

The type of foreclosure procedure used depends on the contract made at the time of the loan. Often, a lender can use a "deed in lieu of foreclosure" to claim the title and possession of the property back in full satisfaction of a debt. The right to such a deed is explained in the loan contract. The contract explains how many payments must be missed before the lender can take possession. If the borrower has a good reason for not paying the loan back on time, he may contact the lender and make new arrangements, and if both can agree on the terms, a new arrangement for repayment takes the place of the old agreement and neither the borrower nor the lender can go back to the original arrangement without the consent of the other.

Following this action in most states, the property in question becomes part of an auction called a sheriff's sale. Many states require this latter sort of proceeding in some or all cases of foreclosure, in order to protect any equity the debtor may have in the property, in case the value of the debt being foreclosed on is substantially less than the market value of the property. This also protects the lending industry from those who might try to borrow more money than a property is worth and default on purpose. Bidding on this type of foreclosure might involve individuals or other financial institutions. In this foreclosure, the sheriff then issues a deed to the winning bidder at auction. If the ownership of the property is not awarded during the bidding process, the ownership of the property in question is returned to the lending financial institution.

Other states have adopted non-judicial foreclosure proceedings. If a loan contract gives the lender the automatic right to take possession of the property after a specified amount is not repaid, then the courts do not need to take action and the foreclosure procedure is a non-judicial one. If the contract says that a legal action must precede a foreclosure procedure, then it is a judicial foreclosure. The lender or their representative, usually an attorney, initiates this particular foreclosure option. The person that is in default will be served with a legal notice that reflects the lender's option of foreclosing on the property with the intent to sell. If the homeowner fails to cure its default, or use other lawful means (such as filing for bankruptcy) to stop the sale, the mortgagee or its representative will conduct a public auction in a similar manner as the sheriff's auction described above. The highest bidder at the auction becomes the owner of the property free and clear of any interest of the former homeowner.

The cost of any unpaid property taxes may also be included in the financial obligations of the transferred property to the highest bidder. In most jurisdictions it is customary for the foreclosing lender to run a title search of the property and to name all other persons who may have liens on the property, whether by judgment, by contract, or by statute or other law, so that they may appear and assert their interest in the foreclosure litigation. Several types of creditors can put a claim or lien against the property to pay money owed them even if the property was not used as collateral. Such creditors include utilities for such debts as water bills or electrical bills. In all US jurisdictions a lender who conducts a foreclosure sale of property which is the subject of a federal tax lien must give 25 days notice of the sale to the Internal Revenue Service: failure to give notice to the IRS will result in the lien remaining attached to the property after the sale.

Anyone buying foreclosed properties should always make sure that there are no outstanding liens against them.

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