Nonjudicial foreclosures occur outside the court system, which means the lender doesn't have to go to state court to foreclose. Not all states allow a nonjudicial foreclosure process. To find out if you live in a state that permits nonjudicial foreclosures, see our Key Aspects of State Foreclosure Law: 50-State Chart.
If you're facing a nonjudicial foreclosure, it's important to understand the foreclosure's basic process and timeline. While foreclosure procedures vary by state, here's how the nonjudicial foreclosure process generally goes.
In most cases, under federal law, a foreclosure can't start until you're more than 120 days delinquent on the loan. Though, under certain circumstances, the process might start sooner.
Depending on state law, you might receive:
For the specific procedure in your state, check out the link to your state in our Summary of State.Foreclosure Laws.
The foreclosure sale will take place on the designated time and date, and the property will be sold to the highest bidder. 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. In the majority of cases, the lender will be the highest bidder at the foreclosure sale.
Some states provide for 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. 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.
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.)
A nonjudicial foreclosure might take a few months—sometimes less time—to complete once officially started. In fact, in some states, nonjudicial foreclosures are extremely quick. For an estimate of the timeline in your area and in your particular situation, talk to a local foreclosure attorney or a HUD-approved housing counselor.