Foreclosure Process

The Foreclosure Process
***Disclaimer***
This is to provide information regarding the process of a foreclosure. This information is in no way intended to be used as legal or tax advice. The foreclosure process varies by state and varies by each individual’s specific circumstances. Please consult with a Licensed Attorney or CPA for specific questions regarding your State Laws.

Non-Judicial Sale
A non-judicial sale occurs when a power of sale clause exists in a deed of trust. There is a clause in the Deed of Trust called a “Power of Sale” which authorizes a lien holder to execute the sale of the property to pay off the loan balance if a borrower defaults on the loan. The “Power of Sale” may be executed by the lien holder or a 3rd party delegated by the lien holder which is usually referred to as Trustee.  Only mortgage brokers, title companies, and attorneys can act as a Trustee and execute a “Power of Sale”.

Either in the “Power of Sale” clause in the Deed of Trust will outline the specific time, location, and terms of sale and any other special guidelines for the sale. If not, the “Power of Sale” will be executed in the following manner:

Judicial Sale
The Judicial of Sale is used when there is no “Power of Sale” clause located in a Deed of Trust. The judicial sale occurs when the lien holder files a lawsuit against the borrower(s) to obtain a court order to foreclose. Once the court order to forclose is obtained, the property will be sold at foreclosure auction.