Each state processes real estate foreclosures differently. It’s important to understand these differences and each of their state’s procedures. Each timeframe can vary greatly from each state.
Judicial foreclosures are processed through the courts, beginning with the lender filing a complaint and recording a notice of Lis Pendens. The complaint will state what the debt is and why the default should allow the lender to foreclose and take the property given as security. The homeowner will be served a notice of complaint, either by mailing, publication of notice, direct service and will have the opportunity to be heard before the court. If the court finds the debt valid, and in default, it will issue a judgment for the total amount owed, including the costs of the foreclosure process. After the judgment has been entered, a writ will be issued by the court authorizing a sheriff’s sale. The sale is an auction, open to anyone, and is held in a public place which can range from in front of the courthouse steps to in front of the property being auctioned. Sheriff’s sales will require either cash to be paid at the time of the sale, or a large deposit with the balance paid from that same day or up to 30 days after the sale. Check the local procedures carefully. At the end of the auction, the highest bidder will be the owner of the property, subject to the court’s confirmation of the sale. After the court has confirmed sale, a sheriff’s deed will be prepared and delivered to the highest bidder. When the deed is recorder, the highest bidder is the owner.
Non-judicial foreclosures are processed without court intervention, with the requirements for the foreclosure established by state statutes. When a loan default occurs, the homeowner will be mailed a default letter and in many states the Notice of Default will be recorded at the same time. If the homeowner does not cure the debt, a Notice of Sale will be mailed to the homeowner posted in public places, recorded at the county recorder’s office and published in area legal publications. After the legally required time period has expired, a public auction will be held, with the highest bidder becoming the owner, subject to their receipt and recordation of the deed. Auctions of non-judicial foreclosures will generally require cash, or cash equivalent either at the sale or very shortly after. It is important to note that each non-judicial foreclosure state has different procedures. Some do not require a Notice of Default, but start with a Notice of Sale. Others require only the publication of the Notice of Sale to announce the sale with no direct owner notification required.