What Are the Different Types of Foreclosure?

First of all, because foreclosure laws are state-based, the process and legal limitations around foreclosure vary from state to state. Therefore, depending on the state in which your property is located, you may see two types of foreclosure: judicial foreclosure and non-judicial foreclosure.

In a judicial foreclosure state, lenders are required by law to seek foreclosure through the court system. This means that the court controls the foreclosure procedure, including approving the foreclosure case, issuing the notice of sale, and conducting the sale of the property.

Tellus TIP:

Some of the states that predominantly use judicial foreclosure are Connecticut, District of Columbia, Florida, Illinois, Indiana, Louisiana, New Jersey, New York, Ohio, Pennsylvania, Vermont, and Wisconsin.

In a non-judicial foreclosure state, lenders are allowed to seek a foreclosure outside and not under the supervision of the court system. The lenders can issue the notice of sale and conduct the sale themselves. However, non-judicial foreclosure does not mean that the lenders can carry out the foreclosure in whatever way they prefer. The state laws usually impose certain limitations on the foreclosure procedure, such as the amount of time between a notice of sale and the sale date (typically ranging from 3 to 6 months).

Tellus TIP:

The following states predominantly use non-judicial foreclosure: Arizona, Arkansas, California, Colorado, Georgia, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, North Carolina, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington, and Wyoming.