What is the Foreclosure Process in Judicial States & Non-Judicial States?
A lender is required to file a foreclosure in a courthouse in judicial states. The process is similar to any other lawsuit where a summons and complaint are served to the homeowner. The foreclosure complaint will outline all the details of why you are being foreclosed on and will notify the homeowner when they need to file a response. Homeowners in judicial states have more rights than a homeowner who lives in a non-judicial state. In a judicial state, the foreclosure process can take a few months to a few years depending on how behind the courthouse is. The foreclosure process generally takes longer to complete than a non-judicial state. A homeowner who lives in a judicial state can stop foreclosure at any time by bringing their mortgage payments current.
Foreclosures usually progress more quickly in non-judicial states. For homeowners who live in the south foreclosure can progress even faster. In a non-judicial state, a lender can foreclose on a homeowner without going to the courthouse and getting a judgment against them. North & South Foreclosure laws are governed by the local state statues. In non-judicial states, before a lender can auction of a homeowners’ home they must first:
- Send a Notice Of Default.
- Post a notice on the home stating that the property is being foreclosed on.
- Publish a notice in your local newspaper or business journal stating that you are in default of your mortgage agreement.
Once your lender has completed the above steps in a non-judicial state they are permitted to sell your home in a foreclosure auction (a.k.a. “Sheriff’s Sale”). After the auction the homeowner no longer owns the property. The foreclosure process in Non-judicial states can be very cut and dry with little recourse for the homeowner once the property is sold in a foreclosure auction. A handful of non-judicial states allow the homeowner a “redemption period” where they can buy back their homes. Sadly the redemption period in non-judicial states is usually a small window of time and most homeowners aren’t able to purchase their homes back in time. Once a homeowner’s financial situation continues to go south foreclosure is almost inevitable. Other than a redemption period, non-judicial states offer no other foreclosure alternatives.
For more information about Judicial & Non-Judicial foreclosures, check out our Judicial & Non Judicial Foreclosure Timelines
