Nonjudicial foreclosures take place outside the court system, which means the lender does not 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 basic process and timeline for the foreclosure.
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. (To learn more about when a foreclosure can begin, see How Soon Can Foreclosure Begin?)
Generally speaking, the nonjudicial foreclosure process begins when the trustee records a notice of default at the county recorder's office, sends a copy of the notice to the borrower and any junior lienholders, and publishes a notice in a local newspaper—though the actual procedure varies widely from state to state. Depending on state law, you might receive:
For the specific procedure in your state, talk to a local foreclosure attorney.
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.
Certain states provide for a redemption period following a nonjudicial foreclosure sale. A redemption period is a specific time period given to foreclosed borrowers during which they can buy back, or “redeem,” their property. (Learn more about redemption periods. To find out if there is a redemption period for your state, check our Key Aspects of State Foreclosure Law: 50-State Chart.)
Once the property is sold at a foreclosure sale, the ownership of the property is transferred to the new owner, typically with a Trustee’s Deed. If you haven't already vacated the home, an eviction will start to remove you from the property. (See Foreclosure Timeline: Getting Notice to Leave to learn more about eviction following foreclosure.)
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 example, in Georgia, a nonjudicial foreclosure can be completed in as little as about 37 days. In Michigan, a foreclosure can be done in around 60 days. Though these time frames can vary depending on the circumstances.
For a good estimate of the timeline in your area and in your particular situation, talk to a local foreclosure attorney.