What Are the Steps in a Judicial Foreclosure Procedure?

After the initial pre-foreclosure stage, meaning that the 120 days of delinquency have passed, you are usually served with a breach letter giving you additional 30 days before the judicial foreclosure process begins. After 30 days from the breach letter, your lender may finally begin the foreclosure procedure.

In the case of a judicial foreclosure, after the pre-foreclosure stage, the procedure is as follows:

  1. The lender will file a lawsuit in court, exercising their right to sell the home and apply the proceeds from the sale for the payment of the loan.

  2. The bank will give you notice of the lawsuit by delivering a summons and complaint.

  3. Next, there is a statutory period to respond to the lawsuit, usually between 20 to 30 days (varies from state to state), where you may decide to respond or not.

  4. The court decides in favor of the bank, in case you decide not to respond or your response is deemed as insufficient by the judge.

  5. After that, the foreclosure sale takes place. The judge orders the sale of the property to satisfy the lender's debt. Most of the time the foreclosure sale will be an auction where the lender will take bids on the property. Whoever is the highest bidder will become the new owner of the house. If no one bids, then the lender will be awarded the property.

  6. This step is optional and varies by state. Some states give you the right to redeem your property. This means there is a specific period of time after the foreclosure sale where you can pay the full outstanding mortgage debt and reobtain possession of the property.