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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
Yes |
| Security Instruments |
Deed of Trust, Mortgage |
| Right of Redemption |
Yes-non-judicial foreclosure |
| Deficiency Judgments |
Yes |
| Time Frame |
Usually 60 days |
Judicial foreclosure is used when no power of sale clause exists in the loan document and requires the lender to sue the borrower to obtain a decree of foreclosure. The court will give the borrower a set time in which to cure the default. If the borrower fails to do so, the court will order the sale of the property.
Non-judicial foreclosure is the process employed when a power of sale clause is included in the loan document. Should the clause designate the time, place and perms of sale, that procedure must be followed. If not the process is as follows:
- The notice of sale must be published at least three times in a newspaper published in the county in which the property is located, with the first publication date at least 20 days prior to the sale date. If no newspaper is available, the notice must be posted publicly in five places in the county, one of which must be on the door of the courthouse, and another in the neighborhood of the property. The notice must also be served upon the borrower at least 20 days prior to the sale date.
- The sale will be held by the sheriff between the hours of 10:00 AM and 4:00 PM on the specified date. The sheriff may also set a minimum price as long as the price set is equal or more than 50% of the property’s fair market value. The successful bidder receives a certificate of sale, and will receive a deed at expiration of the redemption period.
- The statutory redemption period is two years from the date of sale unless waived in the original deed of trust. Deficiency judgments are allowed.
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