If a “power-of-sale” provision in the mortgage note or deed of trust exists, lenders may use the nonjudicial foreclosure method. If the borrower defaults on their loan, the lender has the right to sell the home and use the money to pay off the loan. A lender does not need to hold a court hearing to complete the foreclosure process, as the name implies. The nonjudicial foreclosure process is governed by strict rules and lenders must have proof of mortgage ownership and the borrower’s inability to pay.
The lender starts the process by sending a Notice of Default to the borrower, giving them 90 days to cure the default. If the borrower fails to comply, the lender has 21 days to file a Notice of Trustee’s Sale, and after 21 days, the house is auctioned off. The borrower, on the other hand, has until five days before the auction to cure the default and stop the auction.
The difference between nonjudicial and judicial foreclosure is that a nonjudicial foreclosure is less expensive and takes less time. Hence, why lenders prefer nonjudicial over judicial foreclosures. When compared to judicial foreclosure, nonjudicial foreclosure takes less time. In a nonjudicial foreclosure, borrowers do not have a right of redemption, which means they cannot repurchase the property after the foreclosure sale as they can in a judicial foreclosure. At the same time, the lender relinquishes their right to sue the borrower for the difference between the proceeds from the real estate sale and the amount remaining on the mortgage.
Real Estate Foreclosure Attorney Near Me
State foreclosure laws are complicated, so it’s a good idea for both borrowers and lenders going through the process to seek legal advice. If you have questions about foreclosures, contact an experienced Attorney Real Estate Group agent who can help you with your particular situation.
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