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Summary:
| Judicial Foreclosure |
Yes |
| Non-Judicial Foreclosure |
Yes |
| Security Instruments |
Deed of Trust; Mortgage |
| Right of Redemption |
Yes |
| Deficiency Judgments |
Yes |
| Time Frame |
Usually 90 days |
Judicial foreclosure is used when no power of sale clause is in the loan document. The court must declare the property to be in foreclosure before a sale can be held.
Non-Judicial foreclosure requires that the loan document contain a power of sale clause in which the borrower pre-authorizes the lender to sell the property to recover the loan balance in the event the borrower defaults. Should the power of sale clause include instructions as to the time, place and terms of sale, then that procedure must be followed. If not, the non-judicial foreclosure process proceeds as follows:
- Notice of intent to foreclose upon and sell the property must be sent to the borrower and/or occupant of the premises by certified mail with return receipt requested at least ten days before the first publication of the notice of sale.
- The notice of sale must be published weekly for four consecutive weeks in a newspaper published in the county in which the property is located. If no local paper is available, it must be published in a paper printed in the state and of general circulation in the applicable county.
- The notice must identify the borrower, lender, and lender’s representative, include the date of recordation of the mortgage, the amount of the default, and the time and place of the sale.
- The sale must be held at the front door of courthouse between 9:00 AM and 5 PM and conducted by the lender’s representative or a person appointed by the sheriff. The successful bidder receives a certificate of sale. The sale may be postponed from time to time and a notice of postponement must be published at the expense of the party requesting postponement in the paper in which the original notice was published. Publication of the notice of postponement must continue until the new sale date.
- The borrower has three months from the date of sale by paying the the purchase price or amount bid by the mortgagee, the amount of any prior liens, axes or assessments together with 10% interest.
- Lenders may obtain deficiency judgments.
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