Judicial or non-judicial? That is the question

With regard to the foreclosure process on a home or property, some states incorporate a judicial process while others take a non-judicial route. Before committing to a particular foreclosure, it is important to know in what process the state in which the property of interest is located is incorporated. This will give you information about the type of process you will be dealing with and what contracts will be needed to make the deal. For example, the state of California requires a deed of trust contract and the foreclosure process is a power of sale, while in the state of New York, investors must use a mortgage contract as this state employs a process judicial.

The legal process only works in link theory states. The process is put into effect when a lender files a complaint regarding a foreclosed property. The lender officially declares its plans to take legal action against the borrower. Of course, proof of loan default and late payment of the loan must be admitted to the case. A Lis Pendens, which is an official document that is a matter of public record, is served on the borrower. This document serves as a summons by the court and the state that a lawsuit has been filed against the borrower.

The judicial process, as its title indicates, involves the services of a judge and any matter is resolved within a courtroom. The case is brought before a judge, with or without the presence of a jury. The outcome of the case depends on the judge’s final decision. If a borrower cannot provide sufficient evidence to support their case, the judge usually rules in favor of the lender. The lender then takes possession of the house or property. The general public is notified of the foreclosure sale status. It is at this time that the ether real estate goes to public auction and is sold to the highest bidder or sold to another investor privately.

States that incorporate a non-judicial enforcement process are somewhat precautionary because they include specifications that anticipate possible problems that may occur. This process works in theoretical states, so the links are not necessary. The non-judicial foreclosure process does not imply the approval of the court system. Instead, a deed of trust agreement is established that preauthorizes the sale of the property in question if the borrower defaults on the loan.

The next step requires the lender to send a notice of default to the trustee notifying the borrower of the loan default. This is when the foreclosure process begins. In addition, the receiver is also inclined to prepare a notice of default which is filed with the county courthouse. Filing makes the foreclosed property a matter of public record. An estimated time period is established for the sale of the property, and if it does not sell within this time period, a notice of sale is filed with the county courthouse. As with the judicial process, the foreclosure is sold to the highest bidder at public auction or to another investor.

It is always a good idea to research laws, rules and regulations, and pre-existing conditions and terms regarding real estate. Being prepared and knowing any and all limitations regarding the property and the condition it is in, as well as what you can expect to find, can make the entire foreclosure process less complicated and closing the deal will be easier. a much easier process.