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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
Yes |
| Security Instruments |
Deed of trust; mortgage |
| Right of Redemption |
Yes, but various time periods |
| Deficiency Judgments |
Varies on case by case basis |
| Time Frame |
Usually 90 days |
In judicial foreclosure the lender sues the borrower in default, and obtains a court order to foreclose. This procedure is used when no power of sale clause is included in the mortgage or deed of trust.
Non-judicial foreclosure may be carried out when a power of sale clause is included in the security instrument that authorizes the lender to sell the property to recover the loan balance in the event of the borrower’s default. If the power of sale clause also specifies the place, time, and terms of sale, that procedure must be followed. If such instructions are absent, the non-judicial procedure is carried out as follows:
- A notice of foreclosure and 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 include the time and date of sale, identify the borrower and lender, the original date of the mortgage, the amount due and a description of the property.
- At least twenty-one days prior to the sale, the borrower and any other lien- holder whose interest might be affected by the foreclosure must be served with a copy of the notice of foreclosure and sale.
- The sale must be held by the county sheriff, or his deputy, between the hours of 9:00 AM and 5:00 PM at the place designated in the notice of foreclosure and sale. The successful bidder will receive a certificate of sale. The sale may be postponed from time to time, and a notice of postponement must be published in the same newspaper in which the original notice of sale was published. Such publication must continue until the postponed sale occurs.
- Right of redemption periods vary from 60 days for abandoned property to 180 days for properties of 40 acres or less, or up to one year for residential properties. Redemption periods can also be defined by language in the original mortgage or deed of trust.
- Deficiency judgments may be obtained by lenders on a case by case basis
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