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What is the difference between Judicial and Non-Judicial foreclosures?

Last Updated: Nov 30, 2017 10:23AM EST
The foreclosure process has different requirements in each state and can be very complex. Please be sure to refer to state specific laws for the most recent foreclosure guidelines, which may periodically change.

There are two types of foreclosures. The first type is a Judicial Foreclosure, which is ordered by the courts. Judicial Foreclosures is typically is a much longer process than a Non-Judicial Foreclosure. Judicial Foreclosures can potentially take six months to three years for completion. 


If the property is in a Non-Judicial Foreclosure state, Groundfloor does not have to go to court to foreclose on the property and the process is much quicker. Below is a breakdown of the Judicial and Non-Judicial states:

Judicial States: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, New Jersey, New Mexico (sometimes), New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Vermont, and Wisconsin.

Non-Judicial States: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Washington D.C., Georgia, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico (sometimes) North Carolina, Oklahoma (unless the homeowner requests a Judicial Foreclosure), Oregon, Rhode Island, South Dakota (unless the homeowner requests a Judicial Foreclosure), Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.

Judicial Foreclosure Process
  1. If the loan is not repaid by the maturity date, Groundfloor will issue a Notice of Default to the borrower. The borrower will be given a specific time-frame to repay the loan. Please note that the time-frame varies on the state.
  2. If the loan is not repaid by the Notice of Default deadline, Groundfloor will file a Complaint with the court holding jurisdiction.
  3. The borrower will be served a notice of the Complaint filed with the court.
  4. The court will issue a Judgment.
  5. Groundfloor will issue a Notice of Sale to the borrower.
  6. Sheriff Sale is held at a public auction.
  7. The highest bidder will be awarded the property, and Groundfloor will repay the investors less any direct costs associated with the foreclosure. If no bidder meets the minimum bid, the property will be awarded to Groundfloor.
Non-Judicial Foreclosure Process
  1. If the loan is not repaid by the maturity date, Groundfloor will issue a Notice of Default to the borrower. The borrower will be given a specific time-frame to repay the loan. Please note that the time-frame varies on the state.
  2. The borrower will be issued a Notice of Sale, which may be served personally, published in the local newspaper, or posted in the courthouse and property itself. The Notice of Sale is issued based on state requirements.
  3. The Sheriff Sale is held at a public auction.
  4. The highest bidder will be awarded the property, and Groundfloor will repay the investors less any direct costs associated with the foreclosure. If no bidder meets the minimum bid, the property will be awarded to Groundfloor.
*Some Judicial and Non-Judicial states give the borrower a Right to Redeem for Judicial and Non-Judicial Foreclosures. This is a time-frame provided to the borrower to pay off the successful bidder to reclaim the property.
 

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