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How long does foreclosure take?
How long does foreclosure take?
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Written by Constantina Kokenes
Updated over a week ago

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, the property will be put up for auction and the highest bidder will be awarded the property. From there, Groundfloor will repay the investors less any direct costs associated with the foreclosure. Of course, for all foreclosures, Groundfloor works diligently behind the scenes to provide updates to our investors when they are available.

Below are supplemental details on timelines and process regarding judicial vs. non-judicial states:

Judicial Foreclosure

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 Foreclosure

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.

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