Foreclosure

Judicial Foreclosure

In the judicial foreclosure  process, the creditor sues the debtor for repayment or other satisfaction of the debt and this results in a judgment being entered against the debtor. In this way, judicial foreclosures are similar to any other sale to enforce a money judgment. The court decrees that the property shall be sold to satisfy the judgment, and the resulting sale by the proper government official terminates the interest of the debtor. If the proceeds of the sale are not sufficient to satisfy the debt, the creditor can, in some jurisdictions, proceed to obtain a deficiency judgment, a personal money judgment against the debtor in the unsatisfied amount. 

 

In order to insure title derived from judicial sales, the insurer must be satisfied that all applicable procedural requirements have been met. The process includes: naming all of the necessary debtors and junior lien creditors as defendants (including the United States, if it holds a junior lien); proper notice and service of process on all necessary parties; compliance with Soldiers’ and Sailors’ Civil Relief Act; reinstatement period (in which the debtor may reinstate the debt by making up all defaulted payments plus costs); trial; judgment; notice of sale; sale; Redemption period (not applicable in some jurisdictions); “Sheriff’s Deed” or similar instrument conveying title to purchaser.

 

In some jurisdictions, the failure to name a junior lien creditor as a defendant results in that lien not being extinguished by the foreclosure sale.