What Is a Writ of Seizure and Sale?
A writ of seizure and sale is an order issued by a court that allows the petitioner (usually a creditor) to take ownership of a property from a borrower. Once the property has been seized by the creditor, it can be sold usually at auction. Writs of seizure and sale are used to take possession of the property when a borrower has failed to make payments on the debt or loan for an extended period of time.
Understanding the Writs
A writ of seizure and sale is a drastic step by a lender or creditor to recoup some of the money that was loaned out to the borrower for the property.
A writ of seizure and sale can't be obtained by a creditor if the borrower has only missed a few missed payments. Instead, it's an aggressive move made when a borrower has ignored all other attempts at collection, and the debt is in default. Default is the failure to pay back a loan or debt. A loan is in default usually when a borrower misses payments or stops making payments.
If a property is seized and auctioned off to another buyer, the borrower no longer owns the property and is evicted from the house following the sale.
A writ of seizure and sale can occur when a borrower defaults on a mortgage, and as a result, the loan goes into foreclosure. Foreclosure is a legal process by which a bank, creditor, or lender assumes control of a property and sells the home. The assistance of law enforcement is usually employed in seizing the property.
There are laws governing the foreclosure process, and each state might be slightly different. In some states, a notice is made publicly of the foreclosure and impending sale. However, banks often try to work with borrowers during a process called pre-foreclosure, to help bring the loan payments to the current status and explore other alternatives to prevent foreclosure and the writ of seizure and sale of the property.
If the creditor can't work out a payment plan with the borrower, a writ of seizure is obtained. A judgment creditor is entitled as a right without the leave of the court and without notice to the judgment debtor to issue execution. However, the court has power in certain circumstances to stay such execution.
If the property is seized and auctioned off to another buyer, the borrower no longer owns the property and is evicted from the house following the sale. Seized properties are often sold at a low price to quickly recoup some of the losses incurred by the lender. It's quite possible the bank or lender could take a loss on the property when considering the difference between the original mortgage loan amount and the sale price after foreclosure. As a result, it's best for borrowers to try and work out a deal with their lender to avoid foreclosure and a writ of seizure and sale.
- A writ of seizure and sale is a court order that allows a creditor or bank to take ownership of a property from a borrower.
- Writs of seizure and sale are issued when a borrower has failed to make payments on the loan for an extended period of time.
- Once the creditor has seized the property, it's usually sold at auction to help the creditor to recoup some of the losses from the defaulted loan.