Judicial State Basics
This is where we will explain some of the basic foreclosure concepts if you live in what we call a Judicial State.
Judicial States
Judicial States are states where the Mortgage Holder, has to go to Court in order to foreclose their mortgage.
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 on the payments should allow the lender to foreclose and take the property given as security for the loan.
The homeowner will be served notice of the complaint, either by mailing, direct service, or publication of the notice, and will have the opportunity to be heard before the court. This requires the homeowner to respond to the complaint. If they fail to respond, the court may find that everything stated in the complaint is true, and the homeowner will lose the foreclosure if they do nothing more. This is the way most foreclosures have been going.
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 sheriff's 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 sale, or a substantial deposit, with the balance paid from later that same day up to 30 days after the sale. Check your 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 the sale, a sheriff's deed will be prepared and delivered to the highest bidder, when that deed is recorded, the highest bidder is the owner of the property.