Prevent Foreclosures

Posts Tagged ‘deed of trust’

You might have heard the term Judicial foreclosure and Nonjudicial foreclosure. They are different processes of foreclosure. One is in court and the other is out of court. Some states allow both judicial foreclosure and nonjudicial foreclosure whereas others may allow only one type. Knowing about different types of foreclosure can help homeowners avoid foreclosure.

What is Judicial Foreclosure? (in court)

A Judicial foreclosure usually occurs when your home loan is secured by a mortgage (as opposed to deed of trust). A judicial foreclosure usually takes longer than a nonjudicial foreclosure. A homeowner in judicial foreclosure, therefore, has longer to come up with ways to prevent foreclosure. Since the court is involved in this process, it ensures that homeowners are less likely to be taken advantaged of by mortgage lenders.  A judge has to sign off on this type of foreclosure.

What is Nonjudicial Foreclosure? (out of court)

When a home loan is secured by a deed of trust, rather than a mortgage, then the foreclosure process can be achieved without the involvement of the court or a judge. Having a deed of trust is worse than having a mortgage in many cases. A deed of trust authorizes the trustee, usually your lender or a title insurance company, to foreclose on the property in case of a default on payment. The lender can then foreclose on your home without the trouble of having to go to court. This can make foreclosure easier and cheaper for them.

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