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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
Yes |
| Security Instruments |
Deed of Trust, Mortgage |
| Right of Redemption |
Yes |
| Deficiency Judgments |
Varies, case by case |
| Time Frame |
Usually 60 days |
Judicial foreclosure: The lender must sue the borrower and obtain a decree of the amount in default. The court then gives the borrower a brief time to cure the default. If the borrower fails to do so, the court issues a notice of sale.
Non-judicial foreclosure is used when the loan document contains a power of sale clause authorizing the lender to sell the property to pay off the loan in the event of default. If the clause specifies the time, place, and terms of sale, that procedure must be followed. Otherwise, the process is as follows:
- The notice of sale must be published weekly for four consecutive weeks in a newspaper of general circulation in the county in which the property is located. The notice must also be posted on the property within fifteen days after the first publication date.
- The sale is held as a public auction by the lender’s trustee or the sheriff of the county between 9:00 AM and 4:00 PM on the date specified. The successful bidder receives a deed to the property that becomes operative at the expiration of the applicable redemption period.
- The sale may be postponed by posting a notice of postponement at the time and place of the original sale date. If the postponement is for more than one week, the notice of sale must be re-published for four more consecutive weeks.
- Right of redemption: If the remaining balance of the loan is more than two-thirds of the original amount-6 months; if abandoned-30 days. In all other cases, one year.
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