Put simply, “judicial foreclosure” is the legal term used for a foreclosure that goes through the local court system. However, there is much more to this type of foreclosure than just knowing that courts are involved. With that in mind, we’ve created a guide to the process below. Keep reading to learn what you need to know about the judicial foreclosure process.
What is judicial foreclosure?
Judicial foreclosure is a legal process in which a lender must file a foreclosure lawsuit in court to foreclose on a property after a borrower defaults on their mortgage payments. Unlike non-judicial foreclosure, which relies on a power of sale clause in the mortgage note, judicial foreclosure involves court oversight and requires a judge to enter a judgment of foreclosure before the sale of the property can occur. This means the foreclosure is handled by the court, and the lender cannot proceed without judicial approval.
The type of foreclosure used in a state is determined by state law, and judicial foreclosure is a legal requirement in many states. States that typically use this method include Connecticut, Delaware, Florida, Hawaii, Illinois, and Wisconsin.
In judicial foreclosure states, the foreclosure process begins when the lender files a lawsuit against the homeowner or borrower, seeking permission from the court to sell the property and recover the unpaid mortgage debt. If the court finds in favor of the lender, it will issue a foreclosure judgment, allowing the home to be sold at a foreclosure sale. This process often provides additional time for the homeowner to respond, possibly seek assistance from a foreclosure lawyer, or negotiate alternatives such as a deed in lieu of foreclosure.
How the judicial foreclosure process works
The judicial foreclosure process is a court-supervised procedure that allows a lender to recover the balance of a mortgage debt when a borrower defaults. This legal process varies slightly depending on state law, but the general steps are largely consistent across judicial foreclosure states.
Borrower defaults on mortgage payments
The process begins when a homeowner or borrower falls behind on their mortgage payments. Under federal law, the mortgage servicer must wait at least 120 days before it can initiate foreclosure proceedings. This waiting period provides time for the borrower to seek alternatives to foreclosure, such as repayment plans or loan modifications to avoid foreclosure.
Preforeclosure notice or breach letter
During the 120-day period, the lender typically sends a notice of default (sometimes called a breach letter), warning the borrower that they’re in default and risk facing a foreclosure. This notice gives the borrower an opportunity—usually about 30 days—to cure the default by making up the missed payments plus any interest, fees, or penalties.
Filing a foreclosure lawsuit
If the borrower does not bring the loan current, the lender moves forward by filing a foreclosure lawsuit in the county where the property is located. The lawsuit—often titled a complaint for foreclosure or petition for foreclosure—asks the court to enter a judgment of foreclosure, allowing the lender to sell the property to recover the outstanding balance.
Notice of the lawsuit and opportunity to respond
The borrower is formally served with a summons and a copy of the foreclosure complaint, typically by a sheriff or process server. The borrower then has a specific period, usually 20 to 30 days, to respond to the complaint. If the borrower doesn’t respond, the court may enter a default judgment in favor of the lender.
Litigation and discovery phase
If the borrower files an answer, the foreclosure enters the litigation phase, where both parties can present evidence and arguments. This phase may involve discovery tools like written interrogatories, document requests, or depositions. Borrowers may raise defenses such as improper servicing, financial hardship, or errors in the loan documents. Legal guidance from a foreclosure attorney or foreclosure lawyer is often beneficial during this stage.
Summary judgment or trial
The lender may file a motion for summary judgment, asking the court to rule in its favor without a full trial. If granted, the court will enter a foreclosure judgment. If denied, the case proceeds to trial, where a judge will determine whether to issue a foreclosure judgment and schedule a foreclosure sale.
Foreclosure sale and possible deficiency Judgment
Once the court enters a judgment of foreclosure, the property is scheduled to be sold at a foreclosure sale, typically at a public auction. If the foreclosure sale price is less than the outstanding mortgage debt, the lender may seek a deficiency judgment—an order requiring the borrower to pay the remaining balance. However, not all states permit this, and some limit the amount that can be recovered.
Redemption period and eviction
In certain states, the borrower may have a redemption period after the sale, during which they can reclaim ownership of the home by repaying the mortgage debt and other costs. Once this period expires, or if there is none, the new owner (often the lender) may begin eviction proceedings if the former homeowner hasn’t vacated the property.
Confirmation of sale and end of process
Some states require confirmation of the sale by the court to finalize the transfer of ownership. Once confirmed, and any redemption period has passed, the foreclosure is complete.
What is the difference between judicial foreclosure and nonjudicial foreclosure?
The difference between judicial foreclosure and nonjudicial foreclosure really comes down to whether or not the lender has to go to court to move forward with the foreclosure process.
In a judicial foreclosure, the lender needs to file a lawsuit against the borrower and ask the court to enter a judgment of foreclosure. That means everything goes through the legal system—from the initial complaint to the final foreclosure sale. Once the court signs off, the property is typically sold at a public auction, either at the courthouse or online. If no one places a winning bid, the home goes back to the lender and becomes real estate owned (REO).
Now, compare that to a nonjudicial foreclosure. In this case, the mortgage or deed of trust includes a power of sale clause, which allows a lender to bypass the court entirely. Instead of a judge overseeing the case, a foreclosure trustee handles the process. After a notice of default is sent, and if the borrower doesn’t resolve the issue, the trustee issues a notice of trustee sale and moves forward with the auction. Unlike judicial sales, these don’t need to be held at a courthouse—they can take place at the property itself or another public location. Same outcome: if no buyer steps up, the home becomes REO.
Timing and control are big differentiators here. Judicial foreclosures tend to take longer, cost more, and offer borrowers more chances to fight the case. Nonjudicial foreclosures, on the other hand, are usually faster and more efficient for lenders—but offer fewer legal protections for the borrower.
Also worth noting: in either type, if the foreclosure sale price is less than the outstanding mortgage debt, the lender might pursue a deficiency judgment, depending on state law. Some states allow it; others don’t.
To make it easier to compare the two, here’s a quick reference chart that breaks it all down:
| Category | Judicial Foreclosure | Nonjudicial Foreclosure |
| Where It’s Most Common | Used predominantly in states like Connecticut, Delaware, Florida, Illinois, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Vermont, and Wisconsin. | More common in states such as California, Texas, Arizona, Georgia, Nevada, Oregon, and Washington. |
| How the Process Starts | Lender files a formal foreclosure lawsuit in civil court after borrower defaults. | Lender initiates foreclosure by notifying a trustee, who follows a specific out-of-court process. |
| Key Legal Requirement | Court involvement is mandatory; judge must authorize the foreclosure sale. | Court involvement is not required due to a power of sale clause in the deed of trust. |
| Officials Involved | State court judges, clerks, attorneys, and potentially sheriffs (for sale or eviction). | Foreclosure trustees, county recorders, and sometimes local law enforcement. |
| Documents Used | Typically based on a mortgage agreement without a power of sale clause. | Relies on a deed of trust that includes a power of sale provision. |
| Notice Requirements | Borrower is served with a summons and complaint. After court approval, notice of sale is issued. | Borrower may receive a notice of default, a combined notice of default and sale, or separate notices of sale. Notices may also be posted publicly or published. |
| Timeline | Often ranges from several months to over a year depending on court scheduling and borrower defenses. | Usually completed within a few months if uncontested, depending on state-specific notice periods. |
| Auction Location | Sales typically occur at a public courthouse auction or are facilitated online by the court. | Sales may take place at the property itself, at a trustee’s office, or another approved public location. |
| Cost to Lender | Higher due to legal fees, court costs, and extended timeline. | Generally more cost-effective with fewer legal steps involved. |
| Borrower’s Ability to Contest | Borrower can present defenses in court, request delays, or challenge the process. | Challenging the process is more difficult; limited to specific legal claims or violations. |
| Deficiency Judgment Possibility | Allowed in many states, depending on court approval and the difference between loan balance and sale price. | Also possible in some states, but often subject to stricter limitations or outright bans. |
| Right to Reinstate the Loan | Available in some states; borrower can pay overdue amounts before judgment to stop the process. | Also available in many states; must occur before the sale and within set timeframes. |
| Right of Redemption After Sale | Available in select states, allowing borrower to reclaim the property within a set period after the sale. | Also offered in some nonjudicial foreclosure states, though the timelines are typically shorter. |
| Mediation or Loss Mitigation Options | May be court-mandated or offered as part of the legal process depending on the state. | Available in some states but not required as part of the standard nonjudicial process. |
Do you get any money if your house is foreclosed?
One of the most common questions homeowners facing a foreclosure ask is: Do I get any money if my house is foreclosed? The answer depends on how the foreclosure sale plays out and what the foreclosure sale price ends up being.
Here’s how it works: when a property is sold at a foreclosure sale, the proceeds first go toward paying off the outstanding mortgage debt, along with any interest, fees, and legal costs. If the sale of the property brings in more than what the borrower owes, that extra money—called surplus funds—belongs to the homeowner. This situation isn’t common, but it can happen, especially in hot real estate markets or competitive auctions.
On the other hand, if the foreclosure sale price is less than the outstanding mortgage balance, the lender may have the right to pursue a deficiency judgment. This legal ruling allows the lender to try and collect the remaining balance from the borrower even after the property is gone. However, whether a deficiency is allowed depends heavily on state law, and some states limit or prohibit it altogether.
In some cases, foreclosure proceedings end with the homeowner owing nothing more. But in others, a borrower may still be liable for thousands after the debt and the foreclosure sale are finalized.
Whether or not you walk away with money or owe more depends on the type of foreclosure used, how the property is valued, and how your state handles deficiency judgment laws. If you’re in this situation, talking to a foreclosure attorney or foreclosure law center can help you understand your rights and options.
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