What Are the Steps in a Non-Judicial Foreclosure Procedure?

Under federal law, lenders must wait 120 days from delinquency to initiate a foreclosure procedure. After 30 days from the breach letter, which is usually sent within the 120 days period, your lender may finally begin the foreclosure procedure.

In order to initiate a non-judicial foreclosure process, borrowers need to have signed a deed of trust and a promissory note, which is usually done upon buying the property.

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

  1. Notice of Default (NOD) is issued, followed by a Notice of Sale. A NOD is sent after 90 days from the first notice date, that is, 120 days from the default date. If you fail to pay your debt within the deadline stated in the NOD, you will be sent a Notice of Sale, stating the date in which your property will be sold in action.

  2. The foreclosure sale takes place. Most of the time the foreclosure sale will be an auction where the lender will make a bid on the property. Whoever is the highest bidder will become the new owner of the house. In case no one bids, then the lender will be awarded the property.

  3. In some states, the original owners have a right to redeem the property (optional).