Did you know the foreclosure process varies from state to state, and that there are both judicial and nonjudicial foreclosures depending on the state you’re in? The foreclosure process can be mystifying and fraught with bureaucracy. Add to that, it’s different depending on where you live. For instance, Florida has only judicial foreclosures, and a redemption period of 10 days. Oregon has both judicial and nonjudicial, with a 180-day redemption period.
Also known as the “right of redemption,” a redemption period means the length of time a homeowner has to buy back their property in full plus any fees, after the foreclosure process has taken place.
But what is the difference between judicial and nonjudicial foreclosures?
Judicial
If your state requires a judicial foreclosure process, this means the lender forecloses on the property through the court system. While all states allow lenders to file judicial foreclosures, not all of them require it. If required, the lender must first file a lawsuit to foreclose on the property. Once a suit has been filed, both the lender and the homeowner will have the opportunity to make their case and negotiate a way to avoid foreclosure. Through the court hearing, both parties will submit documents to be reviewed, after which the court will determine a judgment. If the court deems the case a lawful foreclosure, then the foreclosure sale will follow. This process can take many months or years,depending on the state and specific circumstances.
Nonjudicial
A nonjudicial foreclosure occurs when the courts are not involved, but rather the lender assigns a trustee, which is listed on the deed of trust that the owner signs when they take out their loan. Before the foreclosure begins, in a nonjudicial scenario, the homeowner is given a period of time to rectify the financial situation. The trustee is then responsible for sending or publishing any notices and deadlines. If the property owner isn’t able to get current on payments by the dates given, that is when the house goes into foreclosure and is sold at auction. Nonjudicial foreclosures take less time than judicial foreclosures.
This website shows a chart of all the states and which uses judicial versus nonjudicial foreclosure processes.
Avoid Foreclosure Altogether
Avoiding the foreclosure process altogether is possible. At Greenway Financial Recovery, we are passionate about helping owners get out of a difficult financial situation. There are many reasons why people struggle to make payments, and we are here to help. We specialize in short sales which is a unique way to prevent foreclosure by selling the property. We have done hundreds if not thousands of short sales, saving many owners from the many consequences that can happen after a judicial or nonjudicial foreclosure. Our team acts as the negotiator, getting all parties on board and facilitating the paperwork. We take care of all the details and realtors keep their commission. It is a win-win-win-win.
Reach out to us today if you are at risk for foreclosure, or if you are a realtor with a property at risk of being foreclosed. We can help!