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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
Yes |
| Security Instruments |
Deed of Trust, Mortgage |
| Right of Redemption |
non-judicial foreclosure only |
| Deficiency Judgments |
judicial foreclosure only |
| Time Frame |
usually 90 days |
The judicial foreclosure process requires the lender to sue the defaulted borrower to obtain a court order to foreclose. This process is used when no power of sale clause is present in the loan documents. The lender may sue to obtain a deficiency judgment, and the borrower has no right of redemption.
Non-judicial foreclosure may be pursued when the loan documents contain a power of sale clause authorizing the lender to sell the property to recover the loan balance in the event of default. If the power of sale clause states the time, place, and terms of sale, then that procedure must be followed. If not, the non-judicial foreclosure process is as follows:
- The trustee must record a notice of default and intent to sell in the recording district in which the property is located within 30 days of the default and at least three months before the date of sale. Within 10 days of recordation, the trustee must serve upon the borrower and/or any occupant, or mail by certified mail a copy of the notice. The notice must also go to any other party with a lien or claim of record on the property.
- At any time prior to the sale, the borrower may stop the process by curing the default plus any costs. If, however, two or more defaults have been recorded, the lender can refuse to accept payment and proceed with foreclosure.
- The sale shall be a public auction at the front door of the courthouse in the judicial district in which the property is located. The sale may be postponed to a stated date and time with a written request from the trustee, and such postponement shall be announced at the date and time of the original sale.
- No deficiency judgments are allowed, and the borrower has a stated time within which to redeem the property.
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