The major difference between a commercial and residential foreclosure is that the bank does not have to take back the property in a commercial foreclosure. Unlike residential foreclosures, banks are also not required to keep up the foreclosed property, according to Inside Tucson Business.Continue Reading
The foreclosure process starts with a default, which is then examined by a financial professional, who must decide the best course of action. Each process can become complicated and lengthy depending on the unique circumstances of the case, explains Inside Tucson Business. The financial professional reviewing the case sends out a letter stating that the home or business owner must cure all defaults to prevent the bank from proceeding with its rights. If the client can become a part of the solution, the financial professional can consider restructuring the loan, applying more collateral or reducing the balance.
When a borrower wants to walk away from the property, a foreclosure occurs as a result. If the foreclosure applies to a residential property, the bank automatically owns it. However, if it is a commercial property, the bank has a choice to take it back or leave it, according to Inside Tucson Business. For example, if the property costs more to keep up than what it is worth, the bank is more likely to leave it alone because the bank is not required to take possession of foreclosed commercial properties. If a borrower is unsure of what to do or does not comprehensively understand the process, he should consult a financial professional.Learn more about Real Estate