The Judicial Foreclosure Definition in Real Estate Law

Judicial Foreclosure Definition is when a property owner requests or enters into court to set up a foreclosure against the owner of the property. Then the judge or the court orders the bank to sell the property and repossess the property in either an auction or through a trustee sale. A judicial foreclosure is a much slower process than a non-judicial foreclosure. There are certain steps in the judicial foreclosure process follows, which the bank will take to sell the property under the judicial foreclosure definition.

The first step in the judicial foreclosure definition process is the bank from repossessing the property. If the bank seizes property through foreclosure, it does not mean it can just turn around and sell it. In fact, the bank has to wait until the foreclosure lawsuit is completed and a judge has ordered it to repossess the property. Once the bank receives the repossession notice the house is considered to be in the REO or Real Estate Owned status. The banks can then begin selling the property.

When a bank repossesses a property, it is still owned by the entity that owns it. This entity is called the lender. The lender can try to sell the property through a public auction, private sale, or they can attempt to sell it through a trustee sale. If the bank sells the property through a trustee sale the process is much like a typical foreclosure. The trustee will offer the bank a deed in lieu of foreclosure and the bank will sell the property at auction.

The second step in the Judicial Foreclosure Definition process is the property being sold is determined. It may be a home, apartment building, land, or any other property. It is the bank's decision as to what property is being sold. If the homeowner still lives in the home it is sold under the foreclosure process. If the homeowner flees the home it is sold under the judicial foreclosure definition.

When a property is foreclosed on the debt is rolled into a single loan. This loan is known as the mortgage foreclosure process. Once the mortgage is paid off the original debt is released. The second step in the foreclosure definition is the notification process. This notification is required for any action to take place with respect to the property. In this case, the homeowner must go to court in order to obtain permission to sell the property.

There are two types of Foreclosure Definition; judicial and non-judicial. A judicial foreclosure is one in which the homeowner is given the required notice period. The notice period is typically 30 days. The property owner then has up to ninety days to redeem the property. If the property does not sell during the redemption period, the foreclosure takes effect and the proceeds from the sale of the property become due and payable. This is the second type of foreclosure, in which there is a notice period.

If the homeowner does not redeem the property the foreclosure proceedings move to the court system. At this point, the property is sold at auction by the bank. An auction sales process is used to determine the price of the property. The bank pays the expenses of the sale after the winning bid is set and the proceeds from the sale are divided between the winning parties. The bank is also responsible for providing security for the auction and taking care of legalities associated with the foreclosure sale.

The last category of foreclosure definition is non-judicial foreclosure. This occurs when the homeowner makes some type of payment arrangements with the lender prior to foreclosure. Some agreements include paying back a percentage of the loan or additional payments. Since the bank must follow the guidelines provided by the foreclosure definition the agreement can be termed an agreement and not a foreclosure.