When no power-of-sale clause is included in the mortgage or deed of trust, the foreclosure is administered by the court. The lender files suit against the borrower to obtain a court order to foreclose on the property. Once the court declares foreclosure, the property is scheduled for public sale.
Foreclosures are more often accomplished out of court. Before starting the foreclosure process, the lender first mails a letter to the borrower which allows at least 20 days to pay the default amount on the loan. Following this time period, the lender may begin the foreclosure process by mailing a second letter to the borrower which states that the loan has been accelerated (full balance now due), and a sale has been scheduled to recover the full amount due.
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