Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Law, Transactions, & Risk Management
  • Real Estate, Personal, & Intellectual Property

Judicial Foreclosure - Explained

What is a Judicial Foreclosure?

Written by Jason Gordon

Updated at September 24th, 2021

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

Judicial Foreclosure DefinitionA Little More on What is Judicial ForeclosureJudicial Foreclosure ProcessAcademic Research
Back To: Real Estate, Personal, & Intellectual Property

What is a Judicial Foreclosure?

Judicial foreclosure refers to a legal court proceeding in which a mortgage lender seeks the right to seize the property of a debtholder who has defaulted on repayment. It is used when lenders make loans to debtors that are secured by real property (land), known as a mortgage. The court will issue a foreclosure order, which allows the creditor to sell the subject property at auction.

  • Note: Some states allow this process without seeking as court order. This process is known as an non-judicial or administrative foreclosure.

Related Topic

  • Lis Pendens
  • Deficiency Judgment

How Does a Judicial Foreclosure Work?

In mortgage loan agreements, if a debtor defaults of the repayment of the loan, the mortgage lender can seek right to foreclosure from the court. This right allows the lender to seize the borrower's property and sell it to offset the debt. A foreclosure can be judicial or non-judicial, depending on the laws of the state. While Judicial foreclosures are processed in court, non-judicial foreclosures are processed outside the court. Many states adopt the Judicial foreclosure procedure, which protects the debtor's equity in the property and also prevents dubious acts by lenders. Once a debt that is in default is confirmed by the court, the property is sold off to pay the lender. If the property generates insufficient money, the borrower is still liable for the payment.

Judicial Foreclosure Process

There are specific legal processes for Judicial foreclosures. The basis is that the loan must be in default or the borrower delinquent on payments for a stated period (generally four months). After the four months, a lender notifies the debtor of the default in which the debtor is given a grace of 30 days to clear the plan debt. Failure to do so will invoke a foreclosure proceeding in which the court makes the decision. Depending on the state, a Judicial foreclosure can last between six months and three years.

Related Topics

  • What is a mortgage?
  • Short Sale 
  • Homeowners Protection Act
  • Deed in Lieu of Foreclosure
  • Tax Deed

Academic Research



judicial foreclosure

Was this article helpful?

Yes
No

Related Articles

  • Design Build Contract - Explained
  • Elements of a Copyright - Explained
  • Joint Tenancy & Tenancy in Common - Explained
  • Patent Search - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand