documents executed as part of buying or refinancing the home, a promissory note and a deed of trust. The deed of trust makes the promissory note a debt secured by a lien on the property. The deed of trust authorizes the lender to foreclose on the property in case of default. The deed of trust also permits the foreclosure to proceed outside of court, under state law. State law contains the specifics of the foreclosure procedure, including how much notice, how the property will be sold (typically at public auction), and rights (if any) to reinstate the loan before the foreclosure date or recover title after it’s sold. Most states’ laws (31 states, plus DC) permit nonjudicial foreclosure: AL, AK, AZ, AR, CA, CO, DC, GA, ID, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NM (sometimes), NC, OK (unless homeowner requests judicial foreclosure), OR, RI, SD (unless homeowner requests judicial foreclosure), TN, TX, UT, VA, WA, WV, and WY.
JUDICIAL FORECLOSURE
Judicial foreclosure is a more borrower/homeowner-friendly process that requires legal filings, court-imposed notice timelines, and hearings. In a judicial foreclosure jurisdiction, the mortgagor goes to court to initiate foreclosure proceedings. It can take several months or even longer for a judicial foreclosure. Another advantage to the homeowner is that any legal defenses to the foreclosure may be raised (without the owner having to file a lawsuit). Judicial foreclosure proceedings are required in CT, DE, FL, HI, IL, IN, IA, KS, KY, LA, ME, NJ, NM (sometimes), NY, ND, OH, OK (if homeowner requests), PA, SC, SD (if homeowner requests), VT, and WI.
In most cases, the borrower must be more than 120 days
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