Will Your Foreclosure Take Place In or Out of Court?

In some states foreclosures must go through court. In others, it can proceed out of court. Find out what happens in your state.

Foreclosures take one of two major paths: judicial (in court) or nonjudicial (out of court). If your home loan is secured by a mortgage, chances are excellent you’ll have a judicial foreclosure. If your loan is secured by a deed of trust, you’ll probably have a nonjudicial foreclosure. The real estate industry in a particular state—and the laws that industry’s lobbyists have pushed through the state legislature—pretty much determine whether mortgages or deeds of trust are used there. (Learn more about the difference between a mortgage and deed of trust.)

A judicial foreclosure often takes longer—a lot longer—than a nonjudicial one. A judicial foreclosure also gives you a ready-made opportunity to oppose the foreclosure and assures that your home won’t be lost to foreclosure unless a judge signs off on it. Judicial oversight is an important protection against illegal tactics by the foreclosing party.

Do You Have a Mortgage or a Deed of Trust?

Again, mortgages are usually foreclosed in court, while deeds of trust are typically foreclosed nonjudicially. Though, it isn’t always clear what the foreclosure process will be. Even in a state where foreclosures are normally nonjudicial, the lender might choose to foreclose through the courts.

Not sure which document was used to secure your home loan? You can find out by:

  • reviewing your original paperwork (that pile of documents you got when you closed escrow on your house)
  • calling your mortgage servicer (the company to whom you make your payments)
  • asking a counselor at a local HUD-approved housing counseling agency how foreclosures generally proceed where you live, or
  • visiting your local land records office and pulling up the recorded document (under your name or address) on the public-access computer.

In some states, the borrower has a right to request a judicial foreclosure even if a deed of trust authorizes a nonjudicial foreclosure.

Judicial Foreclosures

If you live in one of the states listed below, and your home loan is secured by a mortgage, the foreclosure will probably take place in court.

  • Connecticut
  • Delaware
  • District of Columbia (sometimes)
  • New Jersey
  • New Mexico
  • Florida
  • Hawaii
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • New York
  • North Dakota
  • Ohio
  • Oklahoma (if the homeowner requests it)
  • Pennsylvania
  • South Carolina
  • South Dakota (if the homeowner requests it)
  • Vermont (sometimes)
  • Wisconsin

In judicial foreclosures, your lender gets things started by filing a foreclosure lawsuit in the local court. You will receive official notice of the lawsuit when a sheriff or process server personally serves you with (or mails or posts on your door in some cases) a summons explaining your right to file a written response to the lawsuit and telling you how long you have to do so, and a copy of the document (called a petition or complaint) that requests the foreclosure and that sets out the reasons why the judge should issue a foreclosure order.

If you don’t respond, the lender will most likely get a default judgment authorizing the sale of the home. (A default judgment means that you automatically lose the case since you didn’t respond to the suit.) If you do respond by filing an answer with the court, the foreclosing party can’t get a default judgment. Instead, it will likely file a motion of summary judgment. You must respond to the motion or else the lender will win automatically. Even if you respond, the court may grant summary judgment in favor of the foreclosing party if there is no dispute as to the important facts of the case. However, if you have a valid defense and the court denies summary judgment, the case will proceed toward a trial, at which you and the lender will present your evidence and arguments. The judge will then:

  • order the foreclosure to go ahead (and in many states, set the sale date)
  • postpone a final decision to give the lender more time to fill in a missing gap (proof of ownership, for example), or
  • dismiss the case, sending the lender back to the drawing board.

In two states, Connecticut and Vermont, a judge who approves the foreclosure can order ownership (title) to be transferred then and there. This is called a strict foreclosure.

Judicial foreclosures are seldom if ever permanently derailed, but they can be significantly delayed. If you have grounds to fight the foreclosure, either because the foreclosing party can’t prove its case or because you offer proof that casts doubt on the foreclosure’s legality, such as evidence that you were not behind on your payments after all, it can take many months before the case is resolved one way or the other. Eventually, if the foreclosure is legally appropriate, the judge authorizes your house to be sold at auction or, in the strict foreclosure states, transferred directly to the lender.

Nonjudicial Foreclosures

If you live in one of the states listed below, the foreclosure will probably be nonjudicial. This means a court will not oversee the procedure (except in a few states, where a court signs off on the foreclosure). The foreclosure could be judicial though, for a variety of other reasons (for example, because of a title issue).

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • District of Columbia (sometimes)
  • Georgia
  • Idaho
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Mexico (sometimes)
  • North Carolina
  • Oklahoma (unless homeowner requests judicial)
  • Oregon
  • Rhode Island
  • South Dakota (unless homeowner requests judicial)
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Washington
  • West Virginia
  • Wyoming

Generally, a deed of trust authorizes the entity named as trustee in the deed of trust to foreclose on the property if you ever default. The deed of trust typically allows the foreclosure to proceed outside of court. Your state’s law sets out the specifics of the foreclosure procedure, including how much notice you get, how the property will be sold (typically at a public auction), and what rights (if any) you have to reinstate the loan before the foreclosure date or recover title to the property after it’s sold.

To learn more, visit our Judicial v. Nonjudicial Foreclosure topic page.

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