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Foreclosure process

Non-Judicial Foreclosure

Also called Power of sale foreclosure, Trustee sale

In short

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.

Who conducts it
A trustee
Court involved?
No, unless the owner sues
Requires
A power-of-sale clause
Typical length
Often a few months to a year

How the process works

  1. The borrower defaults on the loan.
  2. The trustee records a notice of default or a similar notice required by state law.
  3. After a waiting period, the trustee records and publishes a notice of trustee sale.
  4. The property is sold at a public auction.
  5. The trustee issues a deed to the winning bidder, or to the lender if it wins with a credit bid.

Where it is used

Non-judicial foreclosure is the usual method in states where loans are secured by a deed of trust or a mortgage with a power-of-sale clause, including California, Texas, Arizona and Georgia. Notice rules, waiting periods and whether the lender can pursue a deficiency judgment afterward vary by state.

What it means for buyers

Because there is no court case, these foreclosures move faster and the sale is generally final when the trustee's deed is delivered. Buyers have less time to research, and there is no court file to review, so county records and the trustee's notices are the main sources of information.

Example

A non-judicial foreclosure timeline

An owner stops paying in January. In June the trustee records a notice of default. After the state's waiting period, a notice of trustee sale is recorded in October with a sale date in November. The property sells at the courthouse steps about 11 months after the first missed payment, with no court hearing involved.

Non-Judicial Foreclosure vs. Judicial Foreclosure

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.

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.

The differenceA non-judicial foreclosure is handled by a trustee without going to court. A judicial foreclosure requires a lawsuit and a court-ordered sale, and usually takes longer.

Frequently Asked Questions

Related terms

Deed of TrustTitle & legalA deed of trust is a security instrument used instead of a mortgage in many states. The borrower gives a neutral trustee legal title as security for the loan until it is paid off.TrusteeForeclosure processIn real estate, a trustee is the neutral third party named in a deed of trust who holds legal title for the lender and can sell the property at a trustee sale if the borrower defaults.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.Notice of Trustee SaleForeclosure processA notice of trustee sale is the public notice, in a non-judicial foreclosure, that sets the date, time and place a trustee will auction a property to repay the defaulted loan.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.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.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.

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.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.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.
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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.