What Is Strict Foreclosure?

Strict foreclosure is a process that is used in certain states in order to facilitate the process of foreclosure for the lender. With this type of arrangement, the lender has the right to take back the property if an individual that is in default does not pay the mortgage back within a specific amount of time. This system is used in a few states like Illinois, Connecticut, Maine, Indiana, New Hampshire and Vermont.


With this arrangement, the lender will file a lawsuit against the individual that owes the debt. The lender will ask the court system to provide the debtor with a deadline by which the debt must be repaid. For example, the lender might ask for a deadline of three months. If the court grants this wish, this means that the borrower has three months to repay the entire amount of the mortgage. 


If the individual does not repay the debt within the deadline, the lender can come in and take back the property without going through the normal auction process. This gives full ownership to the lender, and the borrower has to move out of the property immediately. At that point, the borrower's debt is cancelled. 

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