State Foreclosure Laws

The foreclosure process is essentially the procedure by which a lender who holds a mortgage on a piece of property repossesses or “forecloses” to take possession and ownership of the property. This is done in an attempt to liquidate the asset to cover the debt of the mortgage type loan. They also term this “mitigating the debt” or cutting their losses.

The procedure varies from state to state. There are two basic differences in the foreclosure proceedings.

1. Judicial Foreclosure
2. Non-Judicial Foreclosure

A Judicial Foreclosure takes place in states that require the civil court system to be involved in the process. Generally, the lender must file a civil law suit for mortgage foreclosure against the homeowner in default. The court then employs their normal civil law systems.

A Non-Judicial Foreclosure takes place when there is a “Power of Sale” clause in the mortgage documents. This clause allows the lender to foreclose and gain possession of the property without the involvement of the court system. In states which allow a Non-judicial Foreclosure the lender normally is required to post notice in a public legal publication that they have begun the procedure of foreclosure. They are required to post these notices more than once. Most states require three postings. Once the third posting in made, the lender may give “power of attorney” to anyone they wish to sell the home at public auction. Several states allow this process to be completed in three weekly postings or 21 days from the date of the first posting.

Many states that claim to be “Judicial Foreclosure States” will allow a Non-Judicial Foreclosure if the lender has a “Power of Sale” clause in their mortgage. There are states that only allow Non-Judicial Foreclosures. Check the state listing below to see if your state is Judicial or Non-Judicial in the foreclosure process.

Click on your state for more detailed information on the foreclosure proceedings.