A non-judicial foreclosure is a foreclosure that doesn’t require or involve the court’s intervention. In a non-judicial closure, the lender is allowed to sell the borrower’s property in order to recover any losses (usually do to missed mortgage payments). Non-judicial foreclosures are also known as “foreclosure by power of sale”.
Not all states allow non-judicial foreclosures. In states that do allow it, non-judicial foreclosure must occur in accordance with what’s stated or allowed in the mortgage document or contract. In states that don’t allow non-judicial foreclosure, the process must occur with court intervention.
As mentioned, judicial foreclosure involves the intercession of the court for the foreclosure process. This may involve the court imposing a judicial lien on the property, and then subjecting it to a judicial sale, with the proceeds going to the mortgage company or lender. Thus, the court basically monitors the home sale process.
Judicial foreclosures may be necessary in instances where there is a major dispute over the foreclosure terms. Also, as mentioned, they may be necessary simply because non-judicial foreclosures aren’t allowed in the area.
Judicial foreclosures, or foreclosure by judicial sale, can sometimes take longer than non-judicial foreclosures. This is because the parties would need to file suit with the court, present evidence, and collect debt in connection with the claim. This can use more time and resources for both parties.
Also, judicial foreclosures are final and enforceable by law. Thus, they are more difficult to contest or appeal. This is one of the reasons why a lender may seek judicial foreclosure rather than non-judicial foreclosure. On the other hand, borrowers may seek out a judicial foreclosure, as the court supervision may help prevent instances of mortgage fraud.
Non-judicial foreclosure generally requires the assistance of a qualified real estate attorney. This is because the foreclosure process is quite complex and presents many different legal challenges. Also, without the court’s intervention, you would want the advice of a lawyer during non-judicial foreclosure, to ensure that your rights aren’t being violated. Your attorney can provide you with the guidance you need during such critical times.