Of course, there is risk associated with any investment, but unlike traditional investments, Groundfloor has an asset management team and lawyers who do everything in their power to bring about a positive solution for our clients.

If a foreclosure is necessary, Groundfloor initiaites the foreclosure process that is required. There are two types of foreclosures, Judicial and Non-Judicial, that vary based on the state where the property is located. In both types, this is what the process typically involves:

The possible outcomes for a foreclosure are:

The ideal resolution is to avoid foreclosure. Groundfloor tries to resolve issues in ways that are quicker and more cost-effective than foreclosure, such as:

These solutions vary case by case. For all foreclosures, Groundfloor works diligently behind the scenes to provide updates to our investors when they are available.
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The foreclosure process also varies depending on the state. There are two types: Judicial and Non-Judicial foreclosures. Judicial foreclosures involve court proceedings and can take 6 months to 3 years. Non-Judicial foreclosures are quicker and don't require court involvement.
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Below are supplemental details on timelines and process regarding judicial vs. non-judicial states:

Judicial foreclosures can potentially take six months to three years to complete. In a judicial foreclosure state, the lender has to file a lawsuit in a court in order to foreclose. The process in which filing the lawsuit can be time consuming, but it's necessary.

Groundfloor takes multiple steps in the process to ensure that this is only accomplished when it’s absolutely necessary. Steps including multiple communications to the borrower to understand options. Although these updates may not reflect in the portfolio, we can assure you we are working diligently to have tangible next steps in the process. To accomplish a judicial foreclosure can be time consuming based upon the required steps of involving a lawsuit with the courts.

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 foreclosures do not require Groundfloor to go to court to foreclosure, which makes the process much quicker. Non-judicial foreclosure rely on power of sale clauses in the mortgage or deeps of trust to recoup the balance owed if the borrowers stop making payments. The lender is obliged to follow out of court steps laid out by the state, and the mortgage agreement to begin the foreclosure process.

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.