Judicial and nonjudicial foreclosure, notes, assignments and chain of title.
Chain of title is the sequence of recorded transfers of an interest in property, from earlier owners to the current one. In mortgage lending, people also talk about the chain of ownership of the note — a related but different question.
For most residential mortgage loans, federal mortgage servicing rules in Regulation X limit when a servicer may start foreclosure and how it must handle loss mitigation applications.
Foreclosure is the legal process a lender or other secured party uses to sell real property that secures a debt after the borrower defaults. Each state decides how foreclosure works within its borders.
In a judicial foreclosure, the foreclosing party must file a lawsuit and obtain a court judgment before the property can be sold.
In a nonjudicial foreclosure, the property is sold without a lawsuit, under a power-of-sale clause in the deed of trust or mortgage and the procedures set by state statute.
Whether foreclosure in a state is primarily judicial, primarily nonjudicial, or both — and the main statute that governs it.
LAWTOPOLIS
The Law as Written. The Law as Applied.