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Foreclosure process

Judicial Foreclosure

In short

A judicial foreclosure is a foreclosure that goes through the courts: the lender sues the borrower, a judge orders the sale, and the property is auctioned, often by a sheriff or court officer.

Who oversees it
A state court
Typical length
Often a year or longer
Who conducts the sale
Sheriff, referee or court officer
First public record
Lawsuit and lis pendens

How the process works

  1. The lender files a foreclosure lawsuit and usually records a lis pendens.
  2. The borrower is served and can respond or contest the case.
  3. If the lender wins, the court enters a judgment of foreclosure stating the amount owed.
  4. The property is sold at a public auction, often called a sheriff's sale.
  5. In many states the court must confirm the sale before it is final.

Where it is used

Judicial foreclosure is required or most common in states such as Florida, New York, New Jersey and Illinois, and it is available in every state. Lenders in other states may choose it when there is a title problem or when they want a deficiency judgment. Procedures, timelines and post-sale redemption rights vary by state.

Why it matters to buyers

Court involvement makes the process slower, which gives more time to approach owners in pre-foreclosure. The court docket is also a public source of information about the case, the amount owed and the sale date. Some judicial states allow a redemption period after the sale, which can delay a buyer's full control of the property.

Example

A judicial foreclosure timeline

A lender files suit in February over a loan with $265,000 owed. The owner contests the case, and the court enters a foreclosure judgment 11 months later. The sheriff's sale takes place 2 months after the judgment, and the court confirms the sale a month after that. From filing to confirmed sale took about 14 months, and in some states it can take longer.

Judicial Foreclosure vs. Non-Judicial Foreclosure

Judicial Foreclosure

A judicial foreclosure is a foreclosure that goes through the courts: the lender sues the borrower, a judge orders the sale, and the property is auctioned, often by a sheriff or court officer.

Non-Judicial Foreclosure

A non-judicial foreclosure is a foreclosure carried out without a lawsuit. A trustee sells the property at auction under the power-of-sale clause in the deed of trust or mortgage.

The differenceA judicial foreclosure requires a lawsuit and court-ordered sale. A non-judicial foreclosure is handled by a trustee outside of court under a power-of-sale clause and is usually faster.

Frequently Asked Questions

Related terms

Lis PendensForeclosure processA lis pendens is a recorded notice that a lawsuit has been filed involving title to or an interest in a property, such as a judicial foreclosure. It warns buyers that the outcome could affect ownership.Foreclosure AuctionForeclosure processA foreclosure auction is the public sale of a property after a borrower defaults, where the highest bidder buys it, usually with cash and as-is. If no one outbids the lender, it becomes bank-owned.Deficiency JudgmentForeclosure processA deficiency judgment is a court ruling that makes a borrower personally liable for the remaining mortgage debt when a foreclosure sale brings in less than the amount owed.Right of RedemptionForeclosure processA right of redemption lets a foreclosed homeowner reclaim the property by paying the full amount owed, either before the foreclosure sale or, in some states, for a set period after it.ForeclosureForeclosure processForeclosure is the legal process a lender uses to take back and sell a property after the borrower stops making mortgage payments, so the lender can recover what it is owed.Pre-ForeclosureForeclosure processPre-foreclosure is the period after a lender files a default notice or foreclosure lawsuit but before the property is sold at auction. The owner still holds title and can sell or catch up.Notice of DefaultForeclosure processA notice of default (NOD) is a public notice, recorded with the county, stating that a borrower has fallen behind on a mortgage or deed of trust and that the lender may move toward foreclosure.Credit BidForeclosure processA credit bid is a bid at a foreclosure auction that the lender places using the debt it is owed instead of cash. The lender can bid up to the amount of its debt without paying any money.

Learn more in the knowledge base

How Foreclosure Auctions Work: A Guide for First-Time BiddersGuide · 8 min readA foreclosure auction is the public sale where a lender's collateral is sold to repay a defaulted loan. Rules on notice, payment, title and redemption are set by state law, and buyers usually pay cash for a home they have never been inside. This guide explains how the process works so you know what you are bidding on.What Is a Pre-Foreclosure? How the Stage Works for BuyersGuide · 7 min readPre-foreclosure is the window between a lender starting foreclosure and the home being sold at auction. The owner still holds title and still has options, so any purchase is a negotiation with the owner rather than a bid or a bank sale. This guide explains how the stage starts, how it ends and how it compares with auctions and bank-owned homes.Researching a Foreclosure Property Before the AuctionGuide · 6 min readAt a foreclosure auction you usually buy as-is, unseen and without contingencies, so research done before the sale is your only protection. This guide covers how to confirm the sale details, check title and liens, estimate value and repairs from the outside and turn it all into a maximum bid.
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Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.