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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
Yes |
| Security Instruments |
Deed of Trust, Mortgage |
| Right of Redemption |
Varies |
| Deficiency Judgments |
Yes |
| Time Frame |
Usually 60 days |
Judicial foreclosure requires the lender, in the absence of a power of sale clause in the loan document, to sue the borrower in court and obtain an order of foreclosure. The court then orders the property to be sold.
Non-judicial foreclosure may be used when the loan document contains a power of sale clause authorizing the lender to sell the property to pay off the loan balance in the event of the borrowers’ default. Should the power of sale clause contain instructions as to the time, place, and terms of sale, that procedure must be followed. If not, the process is as follows:
- The notice of sale must be published for three days, regardless of provisions for advertisement of the sale contained in the deed of trust. If no provisions for advertisement exist, then the notice must be published weekly for four consecutive weeks. If the property is in or near a city, five consecutive daily publications may be deemed sufficient. At all events, notice must be given at least 14 days before the date of sale.
- The sale shall be held no sooner than eight days after the first publication of the notice of sale and no later than 30 days after the last publication. Written bids may be accepted by the lender’s trustee and must be announced at the sale. Any bidder in attendance may inspect such bids. The successful bidder shall deposit 10% of the sale price with the lender’s trustee.
- Postponement of the sale is at the discretion of the trustee. Postponement shall be advertised in the same manner as the original notice of sale.
- The borrower's redemption period varies by case. Redemption period is usually during foreclosure process up to the sale. (Lender Mediation redemption period 300-345 days, Tax sale no redemption period, State Auditor's up to 18 months, IRS Tax seizure 180 days. In some cases where the remption period is allowed, there is a percentage on top of what's owed in order to redeem the property.)
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