What is the difference between residential and commercial foreclosures?

Foreclosure occurs when a property owner is unable to continue to make payments on a mortgage for the property.  Consequently, the lending institution, or mortgagee, will pursue a court-ordered termination of the mortgagee's right to the property.  This is known as a foreclosure action.

A residential foreclosure is a foreclosure action which applies to a residential property.  Therefore, the property involved in the foreclosure is usually one's house.  The property could also be a vacation home. 

Conversely, a commercial foreclosure action is a foreclosure action which applies to a commerical property.  Hence, the property involved in this type of a foreclosure involves non-residential property, such as business-type property.  Essentially, property which does not include residential or industrial type usage would include commerical use property, such as office spaces.

Foreclosure law which applies to residential and commercial foreclosures is very similar.  The major difference between the two types of foreclosures is that the borrower is different.  In a residential foreclosure, the borrower is a private person in most instances, whereas in a commercial foreclosure, the borrower is frequently a business of some sort, such as a limited liability company or a partnership.  While there may be some slight differences in how the law of foreclosure applies, the law is generally the same.  Of course, each law has some differences which vary by each state, so it is crucial to check the law of your jurisdiction.

Since state laws apply to foreclosure matters, it is imperative to discuss all foreclosure matters with an experienced foreclosure attorney.  An experienced attorney can help one understand the implications of a foreclosure and avoid any problems.