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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 is the process used when the loan documents do not include a power of sale clause. The lender must sue in court to obtain a court order to foreclose.
Non-judicial foreclosure is the process employed when the loan documents do include a power of sale clause that authorizes the lender to sell the property to recover the loan balance in the event of the borrowers' default. If the power of sale clause defines the time, place, and terms of sale, then that procedure must be followed. If not, the procedure is as follows:
- Before beginning the foreclosure process the lender must mail a letter of demand to the borrower for payment the delinquent amount within 20 days.
- If the borrower fails to pay after the 20 day period has expired, and at least 21 days before the scheduled sale date, the lender must record a notice of sale with the county clerk, post the notice on the courthouse door, and mail s copy to the borrowers at their last known address.
- After the proper preliminary notices have been giving, the sale will be a public auction held on the courthouse steps, and will be held on the first Tuesday of any month, even if that Tuesday is a legal holiday. The lender may bid by canceling all or part of the outstanding loan balance, and in the absence of any higher bids, take title to the property.
- The lender may obtain a deficiency judgment, limited to the difference between the sale amount and/or fair market value and the outstanding loan balance.
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