How Judicial Foreclosure Works

Learn the basics about judicial foreclosures.

Updated by , Attorney (University of Denver Sturm College of Law)

"Foreclosure" happens when you fall behind on your mortgage payments, and the owner of your loan (called the "bank" in this article) uses state procedures to sell your house to repay the debt. Foreclosure works differently in different states.

In some states, the bank has to file a lawsuit to foreclose, called a "judicial foreclosure." In others, the bank can choose to foreclose without going to court, a "nonjudicial foreclosure."

How the Judicial Foreclosure Process Works

In a judicial foreclosure, the bank must file a lawsuit to start the process. A judicial foreclosure typically takes several months or more, giving you time to look for another place to live and save money for the future.

Another advantage is that you can raise any legal defenses to the foreclosure in court without filing your own lawsuit.

What States Use the Judicial Foreclosure Process?

With some exceptions, foreclosures go through court in the following states:

Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana (executory proceeding), Maine, New Jersey, New York, North Dakota, Ohio, Oklahoma (nonjudicial foreclosures allowed, homeowner can request judicial foreclosure), Pennsylvania, South Carolina, South Dakota (nonjudicial foreclosures allowed, homeowner can request judicial foreclosure), Vermont, and Wisconsin.

Foreclosures are usually judicial in the District of Columbia, Hawaii, and New Mexico. Nonjudicial foreclosures are allowed in those states, but that process is rarely used.

What Are the Steps in a Judicial Foreclosure?

Here's how a typical judicial foreclosure might proceed.

1. You Fall Behind in Mortgage Payments

Under federal law, in most cases, the bank must wait until you're more than 120 days delinquent in payments before starting a foreclosure. (12 C.F.R. § 1024.41).

2. The Bank Sends a Preforeclosure Notice (Breach Letter)

In many cases, as the loan contract requires, the bank 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. The Bank Files a Foreclosure Lawsuit

After the servicer (the company that manages your loan account on behalf of the bank) refers the file to an attorney for foreclosure, the attorney will prepare a "complaint" or "petition" for foreclosure and file it with the court, usually in the county where the property is located. The lawsuit will ask the court for a judgment authorizing a foreclosure sale.

The Bank Might Ask for a Deficiency Judgment

If state law allows it, the complaint might also ask the court to grant a deficiency judgment if selling the property won't fully pay off the debt. (In some states and circumstances, a deficiency judgment is also allowed after a nonjudicial foreclosure.)

If the bank gets a deficiency judgment against you, you remain responsible for the outstanding balance left on the loan after the foreclosure sale. However, some states don't allow deficiency judgments under certain circumstances.

4. You Get Notice About the Lawsuit

The sheriff or a process server will serve you with a summons and a copy of the complaint for foreclosure.

5. You Get a Chance to Respond to the Lawsuit

The summons gives you a deadline by which you must respond to the complaint if you choose to contest or argue the lawsuit, usually between 20 and 30 days. Whether you file a response is up to you.

What Happens If I Don't Respond to a Foreclosure Lawsuit?

If you don't respond, the bank will ask the court for a default judgment and (most likely) automatically win the suit. The court then issues a default judgment authorizing the bank to sell your home.

How to Answer a Foreclosure Lawsuit

If you answer the suit, you'll have the opportunity to tell a judge why you think you have a legal right to keep your house and that foreclosure isn't warranted. You can raise procedural and substantive defenses.

Your answer must be in the format that local court rules require. For example, you'll probably have to create a caption at the top of the first page, which includes the names of the people and businesses involved in the suit, the name and address of the court, and the case number. In your answer, you must include responses to each of the claims made by the bank and any defenses you might have.

The foreclosure might be halted or significantly delayed if you have strong defenses. If you file an answer but are in default and don't have a legal defense, the bank will still get a judgment, and the court will allow it to proceed with a foreclosure sale.

Should I File an Answer to the Foreclosure Lawsuit?

In some cases, filing an answer isn't in your best interests. You might need to file a different kind of pleading to preserve your rights, and filing an answer to the foreclosure might cause you to lose an important right.

For example, a court must have "jurisdiction" (authority) to hear a case. If the bank made an error, such as failing to properly serve you the lawsuit, you could dispute the court's jurisdiction by filing a motion to dismiss. If the court agrees and dismisses the foreclosure, the bank must start the process over. But if you file an answer, you "stipulate" (agree) that the court has the right to hear the matter, and the foreclosure goes ahead.

Litigation is complex, and most people do better by getting help from a lawyer.

What Happens If I Answer the Foreclosure Lawsuit?

The better your defenses, the longer the process will drag out in court. Even if you win, though, it might be a temporary victory if the bank can fix whatever problem caused it to lose this time.

8. Discovery Phase

If your answer raises issues the court must decide, the suit will probably move to the discovery stage. In this phase, you and the bank get to learn about the evidence in the other's possession.

Discovery Tools

You and the bank can ask for information using discovery tools, including:

  • written interrogatories (questions about case-related facts that the other side has to answer in writing)
  • requests for the production of documents (a demand requiring the other party to give you specific documents)
  • depositions (one party testifies under oath in front of a court reporter), and
  • property inspections (one side views real estate or property in the other side's possession).

What Is Summary Judgment in a Foreclosure?

After discovery, or perhaps before, the bank might file a "summary judgment" motion, which asks the court to decide the case without a trial. The bank will make arguments and provide evidence in its motion.

You can fight the motion by responding to it and submitting your arguments and evidence. If the court decides you don't have a defense, the bank will win the motion, get a judgment, and be able to hold a foreclosure sale. If the judge denies the bank's motion, the court will allow the case to proceed to trial.

7. The Court Enters a Foreclosure Judgment and Orders a Foreclosure Sale

If the court decides in favor of the bank (either as part of a default judgment or summary judgment or after a trial), it will enter a judgment ordering the sale of your property to satisfy the debt. Once the court grants the bank a judgment of foreclosure, a notice of the sale might be published, depending on state law. The foreclosure sale will take place on the designated time and date, and the property will be sold to the highest bidder.

At the sale, the foreclosing bank 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. In the majority of cases, the bank will be the high bidder at the foreclosure sale and get ownership of the property.

8. Redemption Period After the Foreclosure Sale

A few states give a foreclosed homeowner some time after the foreclosure auction to redeem the property and recover ownership of the home by reimbursing the successful bidder or paying off the entire mortgage debt. To find out if your state's laws provide a post-sale redemption period, check our Key Aspects of State Foreclosure Law: 50-State Chart.

9. You Voluntarily Leave or Get Evicted

If you don't leave the property when your legal right to remain in the home ends, you'll receive an official notice to leave the property. Exactly when you need to move out depends on state law. You might need to move out after the sale, after the redemption period expires, or after some other event happens, like confirmation of the sale.

Getting Help

If you're facing a foreclosure and want to learn about potential defenses, 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 (free) HUD-approved housing counselor is also a good idea.

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