What Are the Steps in a Judicial Foreclosure Procedure?

In a judicial foreclosure, the lender has to sue you in state court and win a judgment before your home can be sold. The steps are the lawsuit (complaint), formal delivery of the papers to you (service), your deadline to answer, a settlement conference or mediation where the state offers one, the judgment, a court-ordered sale, and in some states a hearing to confirm that sale. Your answer deadline is short, 20 or 30 days after service in New York, so the most important step for you is the one right after the papers arrive.

What happens before the lawsuit is filed?

Under the federal mortgage servicing rules, your servicer, the company that collects your payments, cannot make the first foreclosure filing until your loan is more than 120 days delinquent. If you send a complete application for help, such as a loan modification, before that filing, the servicer generally cannot file until it has decided the application and you have been turned down (including any appeal), turned down every offer, or stopped making payments under an agreed plan.

Some states add their own pre-suit notice. In New York, the lender must send a notice at least 90 days before suing on a home loan for an owner-occupied one-to-four family home, and it must list at least five housing counseling agencies that serve your county. The pre-foreclosure steps cover the letters and calls you get during those first months.

What are the steps after the lender sues?

1. Complaint. The lender, now the plaintiff, files a complaint in the county court asking for a judgment that sets the amount you owe and orders the home sold.
2. Service. You receive a summons and a copy of the complaint. The date you are served starts your answer deadline.
3. Answer deadline. In New York you have 20 days after the summons is served to appear, or 30 days when the papers were served another way, such as left with someone at your home and mailed. Your answer is the court filing where you dispute the lender's claims and raise your defenses.
4. Settlement conference or mediation. Where a state offers one, it happens early. In New York, the lender must file proof of service within 20 days of serving you, and the court must hold a mandatory settlement conference within 60 days after that filing for a home loan on a home you live in. The Consumer Financial Protection Bureau (CFPB) notes that some states give homeowners a right to mediation before foreclosure.
5. Judgment. If you never answer, the court can rule for the lender without hearing your side. If you contest the case, the judge decides whether the lender has proved it can foreclose. A judgment of foreclosure sets the amount owed, which in Illinois includes principal, interest, court costs, and attorney's fees the court approves.
6. Sale. The court orders a public sale. In Florida, the clerk sells the home 20 to 35 days after the judgment, unless the lender agrees to a later date, after the notice runs for 2 consecutive weeks. In Illinois, the sale cannot happen until the reinstatement and redemption periods end, which for a home is the later of 7 months after you were served or 3 months after the judgment.
7. Confirmation. Some states require the court to approve the sale. In Illinois, the judge holds a hearing and confirms the sale unless required notice was not given, the sale terms were unconscionable (grossly unfair), the sale was fraudulent, or justice was otherwise not done. The confirmation order can also include a deficiency judgment, a personal judgment for any balance the sale did not cover. In Florida, any party has 10 days after the clerk files the certificate of sale to object to the bid; with no objection, the clerk issues a certificate of title and the sale stands confirmed.

A few states then give you a period after the sale to buy the home back. How redemption works explains which states allow it and what it costs.

How long does each step take?

State law sets minimum times for some steps, and court schedules and contested motions add more. These examples come from state statutes:

• New York: a 90-day notice before the lender can sue, 20 or 30 days to answer after service, and a settlement conference within about 80 days of service (20 days for the lender to file proof of service, then up to 60 days to the conference).
• Illinois: 90 days after service to reinstate, and no sale until the later of 7 months after service or 3 months after the judgment. After the sale comes the confirmation hearing, and the notice of that hearing must tell you that you can stay in the home for 30 days after an order of possession is entered.
• Florida: the sale 20 to 35 days after the judgment, then 10 days for objections before the certificate of title.

Add the federal 120-day wait before any filing, and the usual Illinois minimums put the sale at least 11 months after your first missed payment. The court can shorten the Illinois redemption period: to 30 days after the judgment if it finds the home abandoned, or to the later of the reinstatement deadline or 60 days after the judgment if the home is worth less than 90% of the amount owed and the lender gives up any claim for a deficiency.

What should you do after you are served?

1. Write down your answer deadline. It runs from the date service is complete, which is not always the day you got the papers: in New York, when the papers are left with someone at your home and mailed, service is complete 10 days after the lender files proof of service. Check the summons for the court and case number, and if you are unsure of the date, answer early.
2. File an answer or get a lawyer to file one. File it with the court and serve a copy on the lender's attorney, as your court's rules require. If you miss the deadline, you can lose the chance to contest the foreclosure. Defenses depend on your state and your facts, for example that the lender skipped a required pre-suit notice or that the amount claimed is wrong. New York gives one exception: if you appear at the first settlement conference without having answered, you get 30 days from that appearance to answer without losing your defenses, and the judge must explain the requirement to answer.
3. Go to every conference and hearing. A settlement conference is your chance to work out a loan modification or other agreement with the lender while the court supervises.
4. Send a complete loss mitigation application. If your servicer receives a complete application more than 37 days before a scheduled sale, federal rules bar it from asking the court for a judgment or order of sale, or holding the sale, until it has decided the application and the denial, appeal, or your rejection of the offer is final. Applying earlier gives you more protection. The pause applies once: if the servicer already reviewed a complete application from you and you have stayed behind on payments ever since, a new application does not have to stop the case.
5. Ask about reinstatement. Reinstating means paying the missed payments plus the lender's costs to end the case and keep your loan. In Illinois, you can reinstate within 90 days after you are served, and the court then dismisses the foreclosure; once a court records that you reinstated, you cannot use the right again on the same mortgage for 5 years.
6. Talk to a HUD-approved housing counselor. The CFPB's Find a Counselor tool and the HOPE Hotline at (888) 995-4673 connect you with HUD-approved housing counselors. What a housing counselor does covers what to bring.

If keeping the home is not realistic, a short sale (selling for less than you owe) or a deed in lieu (signing the home over to the lender) can end the case before a judgment. Both need the lender's approval, so get in writing whether any remaining balance is forgiven. Alternatives to foreclosure compares them.

How is a judicial foreclosure different from a non-judicial one?

A judicial foreclosure goes through a court, where you can raise defenses before any sale. A non-judicial foreclosure uses a power-of-sale clause in your mortgage or deed of trust and follows a series of notices with no lawsuit by the lender, so a court or court clerk is involved only if your state requires a hearing or you sue to stop the sale. The non-judicial foreclosure steps explain that process. Which one applies depends on your state and your loan documents; how foreclosure works covers both and what happens after the sale.