Judicial Foreclosure — The sale of real property, which was held as security for a mortgage found in default, processed through formal court proceedings and resulting in the lender recovery of lost equity through the sale of the property at auction (referred to as a Sheriff’s Sale). As opposed to non-judicial foreclosure.
Non-Judicial Foreclosure — The foreclosure of real property, processed without court supervision or action filing. As mandated by state legislation, the procedure involves notification to interested parties (by personal service and/or publications and postings) and the final sale of the property at auction. Unless petitioned by the mortgagor, the court provides no supervision of the process, however, non-judicial foreclosures can be accompanied by further civil actions (including deficiency proceedings) involving the court. Non-judicial foreclosures are supported by a Deed of Trust or a Power of Sale clause in mortgage contracts.
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