Each state has foreclosure laws that dictate the manner of foreclosure in that state. One of the most important distinctions in a foreclosure process is whether the foreclosure is conducted:
1- through the court system (judicial) or
2- outside the court system (non-judicial).
**State law governs whether judicial or non-judicial foreclosure is used. Some states allow both types of foreclosure, but each state usually has one type that is more commonly used.
In states that allow both types of foreclosure, the document used to secure the mortgage loan usually determines whether judicial or non-judicial foreclosure is used.
To start a judicial foreclosure, the lender files the appropriate court action against the owner in default. Usually this is in the form of a lis pendens (pending lawsuit) against the owner. If it rules against the owner, the court will order a public sale of the property.
The mortgagor has to record a public notice of default to initiate a non-judicial foreclosure. If the owner in default does not pay off the default within a certain time frame, the lender schedules a public sale of the property.
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1 comment:
This is great info to know.
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