CHAPTER 10 Foreclosing Homes and Property Taxes
There are two types of foreclosures: judicial and nonjudicial. A judicial foreclosure goes through a court; a nonjudicial foreclosure doesn’t. In some states, all foreclosures are judicial. In others, there are procedures for nonjudicial foreclosures (under the contract terms written into the mortgage contract). Whether a foreclosure is judicial or nonjudicial affects the process and procedures, defense that can be raised, and whether the foreclosed-on homeowner will be liable for a deficiency after the foreclosure sale.
NONJUDICIAL FORECLOSURE
Nonjudicial foreclosure is a more lender-friendly process—faster, and without the legal hearings required in a judicial foreclosure state. In nonjudicial foreclosure, the mortgage holder (lender) does not go to court to foreclose on your home. A nonjudicial foreclosure process formally begins when the trustee records a Notice of Default (NOD) at the County Recorder’s Office. The trustee will prepare and file a Notice of Sale for the property if the borrower fails to remedy the default, including foreclosure fees and late charges. Therefore, the foreclosure can proceed more quickly. This also means there is no hearing on the homeowner’s defenses to foreclosure, unless the homeowner brings a lawsuit. In these jurisdictions, the foreclosure right is granted in two core 81
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