A foreclosure is what happens when someone stops making their mortgage pmts and the bank is forced to sell the home to get their money back. It’s triggered when a pmt is late and concludes when either (a) the borrower is back on track OR (b) the property is sold to payback the lender what they’re owed.
There are two types of foreclosure processes: Judicial and Non-Judicial. The framework used varies by state and situation, but all variations unfold over the course of several months.
Nonjudicial (4-7+ Months)
California nonjudicial foreclosure process follows a structured timeline with distinct milestone stages from default to property sale. The entire process typically takes 110-200+ days, though it can be longer depending on borrower actions and postponements.
Payment Default (Day 1-120)
The process begins when a borrower misses mortgage payments and enters default, typically after 30 days of non-payment. However, most lenders do not initiate formal foreclosure proceedings until the borrower is at least 90-120 days delinquent. Federal servicing rules prohibit lenders from recording a Notice of Default until the loan is at least 120 days delinquent.
Pre-Foreclosure Contact (30 days before NOD)
Before recording the Notice of Default, California's Homeowner Bill of Rights requires lenders to contact (or attempt to contact) the borrower at least 30 days in advance to discuss foreclosure alternatives such as loan modifications or repayment plans. The lender must attach a declaration to the Notice of Default stating they have made this contact or attempted to do so.
Notice of Default - NOD (Day 120-210)
The Notice of Default is recorded with the county recorder's office and marks the formal start of foreclosure. This notice must be mailed to the borrower within 10 business days and specifies the total amount owed, including missed payments and foreclosure fees. Once the NOD is recorded, the borrower enters a 90-day reinstatement period during which they can stop foreclosure by paying all past-due amounts plus fees and costs. This is often called the "pre-foreclosure" stage and represents the best opportunity for borrowers to save their home.
Notice of Trustee's Sale - NOTS (Day 210+)
If the borrower does not cure the default within 90 days, the trustee records a Notice of Trustee's Sale, which sets the date, time, and location of the public auction. The NOTS must be recorded at least 14-20 days before the auction date and must be mailed to the borrower, posted on the property, and published in a local newspaper at least 20 days before the sale. Borrowers can still reinstate the loan up to five business days before the auction by paying all delinquent amounts; after that, only full loan payoff can stop the sale.
Trustee's Sale (aka Auction)
The property is sold at public auction to the highest bidder for cash. The sale must occur between 9:00 AM and 5:00 PM on a business day at the location specified in the NOTS. If no third-party bidder exceeds the lender's opening bid, the lender takes the property back as Real Estate Owned (REO). Once the trustee's deed is recorded, ownership transfers to the buyer, and the former
Example, commonly referred to as Ex, is example verbiage provided for a page I’m not finished working on yet.
Wiki Link Hex Code Color: #85B2E1
Terminology Page. Subpage of wiki.
Judicial (6-24 Months)
The judicial foreclosure process involves court supervision and usually takes 6-24 months depending on the state and whether the borrower contests the action. Unlike the streamlined nonjudicial process, this involves filing a lawsuit and obtaining court approval at each stage.
Payment Default (Day 1-120)
The process begins when a borrower misses mortgage payments and enters default. Federal servicing rules prohibit lenders from initiating foreclosure until the loan is at least 120 days delinquent. During this period, lenders typically send reminder letters and make collection calls to work with the borrower.
Pre-Foreclosure Notice (Day 120-150)
After 120 days of delinquency, the lender sends a formal notice of intent to foreclose, often called a breach letter or demand letter. This notice gives the borrower 30-90 days to cure the default by paying all past-due amounts. Many states require mediation opportunities during this phase to explore alternatives like loan modifications or repayment plans.
Filing the Foreclosure Lawsuit (Day 150-180)
If the borrower doesn't cure the default, the lender files a foreclosure complaint in court, officially starting the judicial process. The borrower receives a summons and complaint, typically requiring a response within 20-35 days. This marks the beginning of the court-supervised foreclosure case where the borrower becomes the defendant.
Court Proceedings and Response Period (Day 180-300+)
The borrower can file an answer to contest the foreclosure or negotiate with the lender. If the borrower doesn't respond, the lender can request a default judgment. If contested, the case proceeds through discovery, hearings, and potentially a trial where both parties present evidence. This phase varies greatly in length depending on court schedules and whether the borrower defends the case.
Judgment of Foreclosure (Day 300-500+)
If the court rules in favor of the lender, it issues a judgment of foreclosure and orders the property to be sold. The judgment specifies the total amount owed, including principal, interest, fees, and court costs. Some states allow a redemption period after judgment during which the borrower can still pay off the debt and reclaim the property.
Foreclosure Sale (Day 330-550+)
The court schedules a public auction, typically held at the courthouse. Notice of the sale must be published in local newspapers and posted publicly, usually 20-30 days before the auction date. The property is sold to the highest bidder, with proceeds going toward the outstanding debt. If no third-party bidders meet the minimum, the lender typically takes ownership of the property.
Example, commonly referred to as Ex, is example verbiage provided for a page I’m not finished working on yet.
Wiki Link Hex Code Color: #85B2E1
Terminology Page. Subpage of wiki.
Foreclosure Type by State
| State | Foreclosure Framework | Notes |
|---|---|---|
| California | Nonjudicial | Judicial allowed if lender requests |
| Texas | Both | Nonjudicial more common |
| Alabama | Nonjudicial | Judicial allowed but rarely used |
| Alaska | Nonjudicial | Judicial available but most are nonjudicial |
| Arizona | Both | Nonjudicial most common |
| Arkansas | Both | Nonjudicial more common |
| Colorado | Both | Nonjudicial most common |
| Connecticut | Judicial | Uses strict foreclosure or decree of sale |
| Delaware | Judicial | Court proceeding required |
| Florida | Judicial | Court action required |
| Georgia | Both | Nonjudicial most common |
| Hawaii | Both | Judicial now more common due to dispute resolution program |
| Idaho | Both | Nonjudicial most common |
| Illinois | Judicial | Multiple judicial processes available |
| Indiana | Judicial | Court proceeding required |
| Iowa | Primarily Judicial | Voluntary nonjudicial available by agreement |
| Kansas | Judicial | Court proceeding required |
| Kentucky | Judicial | Court proceeding required |
| Louisiana | Judicial | Court proceeding required |
| Maine | Judicial | Court proceeding required |
| Maryland | Both | Either process allowed |
| Massachusetts | Both | Nonjudicial most common |
| Michigan | Nonjudicial | Judicial allowed if lender requests |
| Minnesota | Both | Either process allowed |
| Mississippi | Both | Either process allowed |
| Missouri | Both | Either process allowed |
| Montana | Nonjudicial | Primary method |
| Nebraska | Both | Either process allowed |
| Nevada | Both | Nonjudicial most common |
| New Hampshire | Both | Depends on loan documentation |
| New Jersey | Judicial | Court proceeding required |
| New Mexico | Judicial | Nonjudicial exists but rarely used for residential |
| New York | Judicial | Court proceeding required |
| North Carolina | Both | Either process allowed |
| North Dakota | Judicial | Court proceeding required |
| Ohio | Judicial | Court proceeding required |
| Oklahoma | Both | Either process allowed |
| Oregon | Both | Nonjudicial more common |
| Pennsylvania | Judicial | Court proceeding required |
| Rhode Island | Both | Nonjudicial most common |
| South Carolina | Judicial | Court proceeding required |
| South Dakota | Both | Either process allowed |
| Tennessee | Both | Nonjudicial most common |
| Utah | Both | Nonjudicial more common |
| Vermont | Judicial | Judicial or strict foreclosure |
| Virginia | Both | Either process allowed |
| Washington | Both | Either process allowed |
| West Virginia | Nonjudicial | Judicial allowed but rarely used |
| Wisconsin | Judicial | Court proceeding required |
| Wyoming | Nonjudicial | Primary method |