The difference between judicial and non-judicial foreclosure states is relatively simple, but an important and often misunderstood part of the foreclosure process. There’s a lot of confusion among homeowners about this issue, so here’s some clarification.
A “judicial” state requires a judicial review of the foreclosure case before it can be officially processed. The foreclosure process actually begins by filing a Lis Pendens (“a lawsuit pending”) document in a court of law.
The following are the states that require judicial review:
- New Jersey
- New Mexico
- New York
- North Dakota
- South Carolina
In “non-judicial” states, lenders or trustees file a Notice of Default with the county recorder’s office to commence the foreclosure process, and the process does not need to go through the courts.
These states include:
- New Hampshire
- Washington D.C.
- West Virginia.
The remaining 25 states allow both judicial and non-judicial foreclosure, though some have tendencies toward one practice or the other.
“Some states allow both judicial and non-judicial foreclosures and there are states that allow judges to have enormous discretion as to how to handle a foreclosure.”Dana Ash-McGinty, ASH | MCGINTY Principal Broker