Foreclosure Types: Non-Judicial and Judicial Foreclosure

October 16th, 2023  / Author: Cesar Gomez
Costs and Taxes

A judicial foreclosure is always faster and cheaper than a nonjudicial one. However, it is much more complicated and requires a lot of paper work.

A nonjudicial foreclosure is typically quicker and easier than a judicial one, but it does require some paperwork.

Most lenders are able to choose whether to go through a judicial or nonjudicial process. Some states allow both types of foreclosures, while others limit lenders to just one type.

To compare the two types, we first need to get aquainted with both of them. That is precisely what we will do in this article.

More About Judicial Foreclosure

A judicial foreclosure occurs when a lender files a lawsuit against the borrower and asks a judge to issue a judgment ordering the sale of property to satisfy the debt. This process usually takes place after the borrower fails to make payments on the mortgage.

If the borrower does not respond to the lawsuit, the lender wins the case and gets permission to sell the house to pay off the outstanding amount.

Nonjudicial foreclosures take place outside of court. They often happen when borrowers fail to make payments and the bank decides to file a lawsuit to force the sale of the home

Judicial foreclosures are much different because they involve a legal proceeding where the lender must prove that the borrower owes money and that he/she did not properly repay the loan. In addition, the lender must show that the borrower failed to comply with the terms of the contract.

What Are the Steps of Judicial Foreclosure

Once the lender obtains a judgment, it must file a lis pendens notice - a document that alerts potential buyers about the pending action.

If the borrower does not respond within 20 days, the lender can request a writ of execution, which allows the sheriff to seize the property. At this point, the lender takes control of the property and sells it at auction.

If you are facing a foreclosure situation, it is important to know what steps to take next. In some cases, homeowners can avoid foreclosure by paying off their debts. However, many lenders do not accept partial payment plans.

Your best option is to contact a lawyer who specializes in foreclosing properties. An experienced attorney can help you determine whether you qualify for a short sale or deed in lieu of foreclosure. These options allow you to keep your home while saving money.

Judicial Foreclosure Triggers

A judicial foreclosure is typically initiated when a borrower defaults on his mortgage loan. If you miss one or multiple payments, you are considered in default and the lender can file a lawsuit against you.

This process starts with a letter informing you that you are now in default. You will receive a copy of the complaint, along with a summons, which requires you to show up in court within 30 days.

Once there, the judge will decide whether or not to grant the lender’s request for a judgment against you. If the judge does agree, it will set a date for the sale of your property. At this point, the bank will send out notices to anyone who might claim ownership of the home.

These notices include information about the upcoming auction and how to redeem the property. The bank will hold the auction and sell the house to the highest bidder. After the sale, the proceeds go towards paying off the remaining balance due on the loan.

Non-Judicial Foreclosure

A nonjudicial foreclosure is different than a judicial foreclosure. In a nonjudicial foreclosure, there is no court involved. Instead, the lender files paperwork directly with the county recorder’s office.

This allows lenders to speed up the process and save money. However, it does mean that homeowners do not have legal representation during the proceedings.

The process of nonjudicial foreclose varies more widely from state to state. Some states require the lender to file a notice of default and provide 30 days for the borrower to cure the problem.

Other states allow borrowers to skip those steps and go straight into a nonjudicial foreclosure. Still others require a court hearing before proceeding with the foreclosure.

In some cases, the lender may choose to use a power of sale rather than a deed of trust. Under a power of sale, the lender simply sells the property to itself. If the owner fails to pay the mortgage, the lender takes possession of the home.

There are several ways to stop a foreclosure. One way is to ask for a loan modification. Another option is to file an appeal. You can also ask the lender to postpone the foreclosure while you work out a payment plan. Finally, you can hire a lawyer to help fight the foreclosure.

Average Duration of a Foreclosure

Foreclosures are complicated processes that often involve multiple parties. A lender files a notice of default with the county recorder’s office, and the borrower has 30 days to cure the problem.

If the borrower doesn’t pay the mortgage, the lender sends out notices to the borrowers’ creditors, including credit card companies and utility providers. After the borrower misses three payments, the lender starts the process of selling the house.

This includes filing a lawsuit against the homeowner and taking it to court. If the judge rules in favor of the lender, the property is auctioned off. The proceeds go toward paying off the debt.

The average length of a foreclosure depends on where you live. In California, foreclosures typically last about 45 days. In Texas, it takes about 60 days. The longest recorded period took place in New York City, where the average foreclosure lasts nearly four years.

Foreclosure Consequences

Foreclosures are one of the most stressful things that can happen to anyone. They can cause financial problems for months or even years.

Foreclosure can significantly decrease your credit score and stay on it for several years, making it practically impossible to obtain a new loan.

Avoiding Foreclosure

Forbearance programs are available though the federal government, but it’s important to understand how they work. You must qualify for one of these programs, and lenders often require additional documentation about your financial situation.

If you do qualify for forbearance, your lender may lower your interest rate or extend the length of your loan. Lowering your payments could potentially save you thousands of dollars.

A deeded-in-lieu of foreclosure allows homeowners to give away their property without having to go through the process of foreclosure.

This option will help you prevent foreclosure if you cannot afford the current payment amounts. Depending on where you live, there are several different types of forbearance programs available.

Selling Your House Before It Gets Complicated

When you have dried out all other resources and are predicting to have a tough financial situation for a foreseeable future - selling a house could be the best way to avoid foreclosure.

SleeveUp Homes provides the best and the fastest service. We will buy your house for a top-dollar, with $10,000 more on the table than what others would offer.

You don't have to go through a regular selling process, with repairs and showings adding to your stress. Contact us and request an offer today.



If you want to sell fast and are worried about how long the traditional process takes, and the commission and fees involved, consider working with SleeveUp Homes.