What occurs during a judicial foreclosure?

During a judicial foreclosure, the process begins when the lender files a court petition against the borrower. This legal action is necessary because a judicial foreclosure involves court intervention to properly assess the validity of the foreclosure claim, confirm the borrower's default on the mortgage, and ultimately oversee the sale of the property to satisfy the debt owed to the lender.

The involvement of the courts provides a structured framework for the foreclosure process, ensuring that all legal guidelines are adhered to and that the borrower is given an opportunity to contest the foreclosure if they choose to. The court then decides if the foreclosure is justified, and if so, it will authorize the sale of the property, typically through an auction process.

This method is distinct from non-judicial foreclosure processes, where lenders can proceed without involving the courts, and options like negotiating a new loan agreement or filing for bankruptcy protection do not directly pertain to the foreclosure itself. Understanding this process is crucial for anyone working in title insurance or real estate, as it affects the security interests of properties and their title status.