Non-Judicial Foreclosure A non-judicial foreclosure is much simpler, and does not require the court system to interfere with the process. When you signed the Promissory Note, you were promising to pay your full mortgage, under the agreed upon terms, to your lender. The note is secured by a “mortgage” or a “deed of trust,” which protects the lender’s interest in the event of non-payment.

When you start missing your loan payments, your loan begins to go into default. Most lenders will wait a few months before beginning the foreclosure process, but can begin as early as your first missed payment. If you cannot reinstate your loan and become current on payments, your lender will file a Notice of Default and record it at the county recorder’s office. The Notice of Default period varies from state to state, but generally this is the time when you can reinstate your loan and avoid foreclosure.

A non-judicial foreclosure varies from state to state, and some states do not require a Notice of Default, and the lender can start with a Notice of Sale instead. The Notice of Sale, in many states, is the next process, and is a formal schedule for the sale of your property at public auction. You will be notified through regular or certified mail, and it is can even be advertised in a county or city newspaper, depending on your state’s law.

The lender must advertise their intent to foreclose within a certain number or days or weeks before the auction. Some states do allow for a redemption period in a non-judicial foreclosure. The process is similar to a judicial foreclosure; you will need to pay the price paid at auction, as well as any fees and expenses associated with the sale.

The Trustee Sale or auction is similar to a judicial foreclosure, but varies by state who conducts the auction. Generally it takes place on the courthouse steps by a third party auctioneer. The auction works the same; the highest bidder becomes the new owner of the property and the deed is recorded and delivered to them. Non-judicial auctions generally require the buyer to pay cash at the time of the sale or within a few days. Auctioneers make sure each bidder has the available funding to purchase the property.

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