How Nonjudicial Foreclosures Work

A "nonjudicial foreclosure" (also known as a "power of sale" foreclosure) is a process where a mortgage lender forecloses on a home without going through the court system, making it generally faster and more streamlined than a judicial foreclosure. Instead of filing a lawsuit, the lender follows specific state laws to notify the homeowner and proceed with the foreclosure sale, typically through a public auction.

Many states across the U.S. allow this type of foreclosure, but the exact procedures, timelines, and homeowner rights vary widely depending on state laws. Understanding how the nonjudicial foreclosure process works, the notices you might receive, and your rights during the foreclosure can help you get through the proceedings more effectively. Keep reading to learn the key aspects of a nonjudicial foreclosure, what to expect, and where to find help if you're facing the prospect of losing your home to this process.

What Is a Nonjudicial Foreclosure?

In a nonjudicial (out-of-court) foreclosure, the lender (or subsequent loan owner, called an "investor") doesn't have to go to court to foreclose your home as long as your mortgage or deed of trust includes a "power of sale" clause. State law regulates the nonjudicial foreclosure process and lenders must strictly comply with the requirements.

How the Nonjudicial Foreclosure Process Works

A foreclosure trustee (a neutral third party) will typically handle the nonjudicial foreclosure steps. State laws set out the specifics of the nonjudicial foreclosure process, including how much notice you get, how the property will be sold, and what rights, if any, you have to reinstate the loan before the foreclosure sale or redeem the home after it's sold.

Nonjudicial foreclosures tend to move quickly and are less expensive for lenders, and they also give homeowners fewer chances to challenge the process in court. So, it's important to act fast if you want to save your home.

What States Use a Nonjudicial Foreclosure Process?

Not all states allow a nonjudicial foreclosure process. The following states permit nonjudicial foreclosures:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Georgia, Hawaii, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico (nonjudicial process rarely used), North Carolina, Oklahoma (nonjudicial allowed, homeowner can request judicial), Oregon, Rhode Island, South Dakota (nonjudicial allowed, homeowner can request judicial), Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wyoming.

How Nonjudicial Foreclosure Varies By State

Nonjudicial foreclosure laws vary from state to state. For example, there are differences in timelines, notice requirements, and redemption periods. In California, for instance, the process starts when the lender files a notice of default in the county records, giving the borrower three months to cure the default. Then, if the borrower doesn't get caught up on the overdue amounts, a notice of sale will be recorded. It can be recorded up to five days before the end of the three-month cure period. The foreclosure sale date must be at least 20 days after the end of the three months. (Cal. Civ. Code § 2924 (2025).) Arizona foreclosures start with a recorded notice of sale. The sale date must be at least 91 days after the date of recording. (Ariz. Rev. Stat. § 33-808(C)(1) (2025).) Some states require different forms of notice, such as by mail, publication in a newspaper, or posting on the property or in a public place, like the courthouse door (Mississippi).

Redemption periods also vary. Michigan provides foreclosed homeowners with a post-sale redemption period of six months or one year in most cases, depending on the circumstances. In Minnesota, the redemption period is six months, one year, or five weeks, depending on the situation. Texas and Virginia law, on the other hand, don't provide a redemption period after a nonjudicial foreclosure sale.

These variations mean how fast nonjudicial foreclosures can happen differs based on state law, making it very important for you to understand the nonjudicial foreclosure process in your state if you're delinquent in making mortgage payments. That way, you'll get an idea of how long you get to remain the property and what kind of notice you'll get before the property is foreclosed.

Steps in the Nonjudicial Foreclosure Process

If you're facing a nonjudicial foreclosure, it's also important to understand the procedures and timeline. While nonjudicial foreclosure procedures differ from state to state, here's how the process generally works.

1. Missed Mortgage Payments

Under federal law, in most cases, the mortgage servicer (on behalf of the lender) must wait until you are more than 120 days delinquent in payments before starting a foreclosure. During these 120 days, you'll get information about various loss mitigation options that might be available.

2. Lender Sends Breach Letter

If the loan contract requires it, the lender sends a "breach" letter informing you that a foreclosure will begin unless you make up the missed payments, plus costs and interest. The letter may be sent during the 120-day preforeclosure period.

3. Foreclosure Notices Are Filed and Sent

Depending on what state law requires, you might get:

• A notice of default and a notice of sale. A "notice of default" gives you time to reinstate your loan by making up all the back payments and might be followed by a notice of sale (if you haven't reinstated your mortgage by the deadline in the notice of default).
• A combined notice of default and sale. A combined notice of default and sale states that the property will be sold on a specific date unless you make up the missed payments.
• A notice of sale. Some states require only one notice, a notice of sale announcing that the property will be sold on a specific date unless you pay off the loan.
• Notice through publication and posting. In a couple of states, the borrower gets notice only by publication and posting.

For the specific procedures in your state, check out the link to your state in our Key Aspects of State Foreclosure Law: 50-State Chart.

4. Right to Reinstate the Loan

State law often provides a right to reinstate the loan by catching up on what you owe, plus fees and costs, by a particular deadline before the sale. The deed of trust might also provide a reinstatement deadline before a foreclosure sale. With some exceptions, however, once the sale occurs, your house is gone.

5. Foreclosure Sale

If you don't reinstate the loan (or work out another way to stop the foreclosure sale), the home will be sold at an auction. The foreclosing lender can credit bid up to the total amount of the debt, plus foreclosure fees and costs, while any other parties must bid in cash or a cash equivalent, like a cashier's check.

The lender will usually be the highest bidder at the foreclosure sale. The property is then known as "real estate owned" (REO).

6. Redemption Period

Some states provide a redemption period following a nonjudicial foreclosure sale. A "redemption period" is a specific amount of time foreclosed borrowers get to buy back, or "redeem," their property.

7. You Voluntarily Leave or Get Evicted

Once the property is sold at a foreclosure sale, the property's ownership is transferred to the new owner. If you haven't already vacated the home, an eviction will start to remove you from the property. Although in some states, the homeowner gets the right to live in the home during a post-sale redemption period.

8. Deficiency Judgment Lawsuit

If allowed by state law, the lender might later file a suit against you to get a deficiency judgment if the proceeds from the foreclosure sale didn't fully pay off the debt. If the court grants a deficiency judgment against you, you remain responsible for paying the deficiency after the foreclosure sale.

But some states don't allow deficiency judgments under certain circumstances.

How Long Does a Nonjudicial Foreclosure Take?

A nonjudicial foreclosure might take a few months (sometimes less) to complete once officially started. In fact, in some states, nonjudicial foreclosures are extremely quick.

Talk to a local foreclosure attorney or a HUD-approved housing counselor to estimate the timeline in your area and your particular situation.

How to Stop or Challenge a Nonjudicial Foreclosure

Because you don't have the opportunity to raise defenses to the foreclosure in court as part of a nonjudicial foreclosure, you'll have to file a lawsuit if you want to contest the foreclosure. In the suit, you ask the court to temporarily stop the foreclosure so that you can resolve the legal issues in court.

In this kind of lawsuit, you typically ask the court for three things in the following order:

1. A temporary restraining order.
2. A preliminary injunction (which, in foreclosure actions, will last until the court decides the case).
3. A permanent injunction (which will be issued if the judge decides in your favor).

Once in court, you can raise the same defenses you would have raised in a judicial foreclosure proceeding.

FAQs About Nonjudicial Foreclosures

The following FAQs and topics answer common questions about nonjudicial foreclosures.

How is a nonjudicial foreclosure different from a judicial foreclosure?

Judicial foreclosures go through a court. With a nonjudicial foreclosure, the lender doesn't have to get a court order to foreclose. However, in some states, a court has some minimal involvement in the nonjudicial foreclosure process. Nonjudicial foreclosures tend to proceed much more quickly than judicial foreclosures, where backlogged courts, judges' schedules, hearings, and required paperwork all contribute to a lengthy process.

What rights do I have in a nonjudicial foreclosure?

In a nonjudicial foreclosure, you get certain rights under federal laws, state laws, and your mortgage contract. For example, you might have the right to reinstate your mortgage loan under state law or the terms of your mortgage. You also get the right to learn about foreclosure alternatives under federal law.

How can I stop a nonjudicial foreclosure and keep my house?

You can prevent a nonjudicial foreclosure by reinstating the loan, getting a loan modification, or, in some cases, filing for bankruptcy. The earlier you take steps to avoid a foreclosure, the better.

Getting Help If You're Facing a Nonjudicial Foreclosure

If you're facing a foreclosure and want to learn about potential defenses that you could raise in court, whether you're likely to face a deficiency judgment, or how to avoid a foreclosure by working out an alternative, like a loan modification, consider talking to a foreclosure attorney.

Contacting a HUD-approved housing counselor is also a good idea.