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What is a judicial vs a non-judicial foreclosure?

20 June 2012

Photo: Wikipedia Commons

Twenty-two states (22) in the union use judicial foreclosure proceedings while the rest utilize individual state-provided steps undertaken by attorneys to foreclose. But what is the difference?

In a judicial foreclosure, a lender will file a complaint which commences the legal action to foreclose on a home or piece of real estate. The lender files a notice in the public land records making its claim to the property known to the public, particularly to potential buyers, creditors, and other parties who may be interested. The complaint will state the debt owed and the amount of the default. The complaint is a formal pleading to the court asking for legal permission to foreclose on the property and take it as a remedy for non-payment.

The homeowner is served notice of the complaint and is permitted to dispute the facts or offer any other type of defense. The homeowner may even file a counterclaim, a separate suit altogether, and may attend a court hearing on the matter where the homeowner has an opportunity to show there are discrepancies in material facts. If this is the case, a trial will be held to determine whether or not the foreclosure may move forward. Should the court determine that the lender’s complaint is valid and that the homeowner did indeed default on his/her payments, then it will issue a judgment in favor of the lender. The judge in the case determines the full amount owed via an affidavit submitted by the servicer that itemizes the debt plus costs for the foreclosure proceedings. A sheriff’s sale will follow in the form of an auction, and the highest bidder–typically the servicer–becomes the owner of the property. At this time, the property then becomes known as real estate owned (REO). 

States utilizing judicial foreclosure are:












New Jersey

New Mexico

New York

North Dakota




South Carolina

South Dakota

Vermont, and


The remaining states utilize a non-judicial form of foreclosure whereby attorneys follow a prescribed state-specific statutory procedure. In these cases, the mortgage documents grant lenders the “power of sale” outside the judicial process, making court intervention and affidavits unnecessary in these cases.

Typically, the homeowner is alerted by a default letter, followed by a prescribed period of time in which to cure the default. Should the homeowner be unable to cure the default, a Notice of Sale will be mailed and posted in public places and/or newspapers. A public auction is then held, and again the highest bidder becomes the new owner of the property.

This is essentially a simplified synopsis of a usually complicated process, so check your state’s local rules. For example, here in Texas, one can actually utilize a judicial OR a non-judicial foreclosure proceeding. Most attorneys prefer the non-judicial avenue for its relative ease of implementation, but there may be advantages to running the foreclosure process through the court system as well. It really depends on each individual situation.

NOTE: I am not an attorney. If you need legal advice on your own foreclosure situation, I encourage you to contact an attorney licensed to practice in your state.

For more info:

Uniform Law Commission’s summary of its non-judicial foreclosure act

Foreclosure laws and procedures by state

How foreclosure works in your state

Interesting blog by foreclosure defense guru Neil Garfield, JD, MBA of The Garfield Firm

Full disclosure~~Source: Mortgage Bankers Association

Sami K. Hartsfield, ACP is a senior paralegal at a consumer law firm and freelance writer based in Houston, Texas. She is a NALA Advanced Certified Paralegal, and has earned six specialty certifications since 2007: Discovery; Trial Practice; Contracts Management; Social Security Disability Law; and Entity & Individual Medical Liability. She is also WestlawNext certified. Sami has worked as a law firm Webmaster, law firm social media marketer, and a ghostwriter for personal injury law firms. She holds a degree in paralegal studies with a 4.0 GPA and a bachelor of science degree in political science, graduating summa cum laude. Sami interned with Texas’ 14th Court of Appeals under Chief Justice Adele Hedges, and completed the University of Houston Law Center’s Summer 2008 Prelaw Institute with a 4.0. You can find her on Facebook and e-mail her with questions, comments, or ideas at

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