Foreclosure Practices of States
Following listing tells you how your state's foreclosure law affects your foreclosure home buying in terms of redemption rights.
What is redemption right? Redemption right gives the homeowner to buy the foreclosed property back after paying the amount of the defaulted loan plus interest and other expenses.
Redemption period: It is 3 to 12 months depending on the state’s foreclosure law and specific foreclosure case.
Judicial or nonjudicial? As you see in foreclosure redemption right page, some states have judicial foreclosure procedure where the bank or lender must go to the court to obtain a judgment to sell the property of the homeowner who fails to make mortgage payments. On the other hand, some states have nonjudicial foreclosure sale process where such court decision is not required to sell the home subject to foreclosure.
States having nonjudicial foreclosure procedures
What is non-judicial foreclosure process? Bank or lender has “power of sale” clause in deed of trust. This provision allows the bank to recover its loan by selling the foreclosure property without going to a court. Bank cannot get a deficiency judgment to recover any amount exceeding the proceeds of foreclosure sale. And, the homeowner does not have a redemption right. So, you don’t need to worry about any redemption right.
Keep in mind that the bank or lender financing the property that is being subject to foreclosure may not have “power of sale” clause. In such case, the foreclosure sale might have been done by applying judicial foreclosure and the homeowner may have redemption right
States having judicial foreclosure procedures
Remember that the bank or lender financing the property that is being subject to foreclosure may have “power of sale” clause in deed of trust. In such case, the foreclosure sale might have been done by applying non- judicial foreclosure procedures and the homeowner does not have any redemption right.
Learn more about foreclosure redemption right before investing in any foreclosure property.
Listing of states by foreclosure practices
Alabama: Deed of trust (nonjudicial process is more common)
Alaska: Deed of trust (nonjudicial process is more common)
Arizona: Deed of trust (nonjudicial process is more common)
Arkansas: Both procedures apply
California: Deed of trust (nonjudicial process is more common)
Colorado: Deed of trust (nonjudicial process is more common)
Connecticut: Deed of trust (nonjudicial process is more common)
Delaware: Mortgage trust (judicial process is more common)
District of Columbia: Deed of trust (nonjudicial process is more common)
Florida: Mortgage trust (judicial process is more common)
Georgia: Deed of trust (nonjudicial process is more common)
Hawaii: Both procedures apply.
Idaho: Deed of trust (nonjudicial process is more common)
Illinois: Mortgage trust (judicial process is more common)
Indiana: Mortgage trust (judicial process is more common)
Iowa: Mortgage trust (judicial process is more common)
Kansas: Mortgage trust (judicial process is more common)
Kentucky: Mortgage trust (judicial process is more common)
Louisiana: Mortgage trust (judicial process is more common)
Maine: Mortgage trust (judicial process is more common)
Maryland: Mortgage trust (judicial process is more common)
Massachusetts: Both procedures apply.
Michigan: Both processes apply.
Minnesota: Deed of trust (nonjudicial process is more common)
Mississippi: Deed of trust (nonjudicial process is more common)
Missouri: Deed of trust (nonjudicial process is more common)
Montana: Both procedures apply.
Nebraska: Mortgage trust (judicial process is more common)
Nevada: Deed of trust (nonjudicial process is more common)
New Hampshire: Deed of trust (nonjudicial process is more common)
New Jersey: Mortgage trust (judicial process is more common)
New Mexico: Mortgage trust (judicial process is more common)
New York: Mortgage trust (judicial process is more common)
North Carolina: Deed of trust (nonjudicial process is more common)
North Dakota: Mortgage trust (judicial process is more common)
Ohio: Mortgage trust (judicial process is more common)
Oklahoma: Both procedures apply.
Oregon: Both procedures apply.
Pennsylvania: Mortgage trust (judicial process is more common)
Rhode Island: Both procedures apply.
South Carolina: Mortgage trust (judicial process is more common)
South Dakota: Mortgage trust (judicial process is more common)
Tennessee: Deed of trust (nonjudicial process is more common)
Texas: Deed of trust (nonjudicial process is more common)
Utah: Deed of trust (nonjudicial process is more common)
Vermont: Both procedures apply.
Virginia: Deed of trust (nonjudicial process is more common)
Washington: Deed of trust (nonjudicial process is more common)
West Virginia: Both procedures apply.
Wisconsin: Mortgage trust (judicial process is more common)
Wyoming: Both procedures apply.
Word of Caution: Please check the foreclosure law in your state and remember that state foreclosure laws may change and different procedure may apply in your case irrespective to the “general” application of foreclosure law in your state.