strict foreclosure
- A legal process where the outstanding amount on a mortgage is established and a timeframe for payment is set. If the mortgagor fails to meet this deadline, the ownership or title of the property is transferred to the mortgagee, void of any redemption rights of the mortgagor
- Defined by the Uniform Commercial Code, it's the process of a creditor accepting collateral as a way to settle a debt. In this situation, the creditor is denied the legal right to claim a deficiency judgment, which is the difference between the selling price and the original loan amount
- The bank commenced a strict foreclosure after the homeowner failed to meet the mortgage payment deadline.
- After months of missed payments, they faced strict foreclosure, losing all rights to their property.
- Under the Uniform Commercial Code, a strict foreclosure can result in the creditor accepting the collateral to satisfy the debt.
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