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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
Yes |
| Security Instruments |
Deed of Trust, Mortgage |
| Right of Redemption |
No |
| Deficiency Judgments |
Yes |
| Time Frame |
Usually 60 days |
Judicial foreclosure requires the lender to sue in court to obtain an order to foreclose. This process is used when no power of sale clause is included in the loan document.
Non-judicial foreclosure may be employed when the loan document contains a power of sale clause authorizing the lender to sell the property to recover the balance of the loan amount in the event of default. If the power of sale clause includes instructions as to the time, place, and terms of sale, then that procedure must be followed. If not, the process is as follows.
- A notice of default and intent to foreclose must be sent to the borrower and all junior lien holders and published weekly in a newspaper of general circulation in the county in which the property is located for three consecutive weeks with the final publication made at least 14 days before the scheduled sale date.
- The notice must also be sent to the state director of taxation and to the director of finance of the county in which the property is located. The notice may include the dates and times of two open houses to be held at the subject property. If none are to be held, the notice must so state.
- The borrower has until three business days before the sale date to cure the default. The sale will be a public auction held at the time and place stated in the notice.
- The sale may be postponed from time to time by a public announcement from the foreclosing lender or their representative.
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