Where do Borrowers Authorize Foreclosure in The Loan Documents?

In the half of a foot stack of documents that homeowners receive at the closing are all of the agreements that the bank will use to hang them if they fall behind on the monthly payments. But where and how does all that paperwork obligate the borrowers to become homeless persons if they can not pay back money created out of thin air?

The homeowners and lender sign a contract using a Mortgage or Deed of Trust to create a security interest in the real estate. The parties also sign an agreement in the Note that the borrowers must pay back a certain amount of money or the bank can enforce its security agreement.

The security agreement, also known as the Mortgage or Deed of Trust allows the lender, in the event of a default on the note, to claim a breach of contract and use the state's legal process to have the property sold at a public auction, also referred to as a sheriff sale or trustee sale, to pay off the amount still owed to the mortgage company.

State foreclosure laws and court procedures dictate how the foreclosure process must be conducted by all parties involved.

Of course, in most cases, the lender does not obey the laws or follow the guidelines set by the state and local court, but none of that matters. The homeowners, experiencing a financial hardship, can not pay to defend their home from being taken from them, and are often derided or dismissed if they attempt to do so on their own.