For those in the mortgage and servicing industry, the foreclosure process, though different in every state can be simplified into a process that is familiar to all. But when discussing foreclosures in other countries, how are those processes similar to that of the U.S.?
The United States of America:
As it has been noted by The U.S. Department for Housing and Urban Development, foreclosure processes are different from state to state, but differences among states range from the notices that must be posted or mailed, redemption periods, and the scheduling and notices issued regarding the auctioning of the property. In general, it’s stated that mortgage companies start foreclosure processes about 3-6 months after the first missed mortgage payment. Late fees are charged after 10-15 days, however, most mortgage companies recognize that homeowners may be facing short-term financial hardships. After 30 days, the borrower is in default, and the foreclosure processes begin to accelerate. Three types of foreclosures may be initiated at this time: judicial, power of sale and strict foreclosure. All types of foreclosure require public notices to be issued and all parties to be notified regarding the proceedings. Once properties are sold through an auction, families have a small amount of time to find a new place to live and move out before the sheriff issues an eviction.
United Kingdom:
In the UK, foreclosure is a rarely used due to the fact that the mortgagor has no right to any surplus from the sale. Because of this, courts almost never allow foreclosures to take place but instead, usually grant an order for possession and an order for sale, which mitigates some of the harshness of the repossession by allowing the sale.
France:
Foreclosure in France is similar to that in the United States, but is a process that takes 3 years to complete, but this three-year estimate does not include the time taken during tactical delays that can be used to lengthen the foreclosure process.
Australia:
For Australia, since the Torrens title system of land registration is used for this country, being registered as proprietor or as a mortgagee creates an indefeasible interest, unless the acquisition of the registration was by land transfer fraud. The mortgagee therefore never holds the fee simple, and there is a statutory process for initiating and conducting a mortgagee sale in the event that the mortgagor defaults.
China:
Chinese law and mortgage practices have progressed with safeguards to prevent foreclosures as much as possible. These include mandatory secondary security, rescission otherwise known as Chinese Contract Law, and maintaining accounts at the lending bank to cover any defaults without prior notice to the borrower. It is possible for a mortgagee to sue on a note without foreclosing by obtaining a general judgment and collecting that judgment against other property of the mortgagor.