Foreclosure, explained

The foreclosure process lets a lender sell property that secures a loan after the borrower defaults. However, the steps depend on state law.

There are two main types. In judicial foreclosure, the lender files a lawsuit and the court orders the sale. In nonjudicial foreclosure, the sale follows a power-of-sale clause and the state statute, without a lawsuit. Every state allows judicial foreclosure, and many also allow the nonjudicial kind.

Federal rules often apply first. For example, federal mortgage servicing rules generally require the servicer to wait before starting foreclosure and to consider a complete loss-mitigation application. The Consumer Financial Protection Bureau publishes guidance for homeowners.

Finally, notes, assignments and chain of title can matter in a contested case. Our guides explain each one. For your own home, talk to a licensed attorney or a HUD-approved housing counselor.

Each state guide on Lawtopolis names the most common foreclosure process in that state and its main statute. So you can start there, and then read the statute itself for notice periods, redemption rights and deficiency rules.

In addition, our guides to notes, assignments, standing and chain of title explain the documents that often come up when a foreclosure is contested. Each guide links to the official text of the law it describes.