Home ownership is a goal of many Jackson residents, though few individuals can purchase real property outright without the help of loans. Financial loans that allow individuals to buy residential properties are mortgages, and mortgages are often held by financial institutions like banks. When individuals stay current on their mortgage payments they, over time, chip away at the obligation that they owe to their mortgage holder. If a payer fails to make payments and goes into default, their mortgage holder may choose to foreclose on their home.
Foreclosure is the process of recovering on an unpaid mortgage debt. It involves taking back the property to which the mortgage is attached, as mortgages are generally secured loans. A mortgage holder that recovers a property attached to an unpaid loan may then sell that property again to recoup their losses from the original default.
Often, when an individual signs a mortgage contract with their lender, they will agree to an acceleration clause. Acceleration occurs when a payer defaults and the mortgage holder asks for the entire balance of the loan to be paid in full. In effect, the entire balance of the loan becomes due on an accelerated time line to protect the lender from future losses.
Acceleration can be an important clause in a mortgage contract and gives a mortgage holder rights to seek payment to avoid suffering further financial harm. Banks and other lending institutions have rights to seek the recovery of their unpaid loans through foreclosure and other collection practices. They can consult with their banking and business transaction attorneys for information that can support their individual needs. This ensures they take the proper steps in a situation as it arises.