judicial foreclosure
Judicial foreclosure refers to the foreclosure proceedings handled by the court, namely selling a home to pay off debt . In some jurisdictions, mortgagees must obtain a court order to foreclose on a mortgage . This is called a judicial foreclosure. Judicial foreclosures (like all foreclosures), are governed by the law of the jurisdiction that the mortgaged property is located in. This is almost always the law of a state (see State Property Statutes ). For example, in New York State, a lender must sue a borrower to enforce the rights under the mortgage (see Understanding New York State's Mortgage Foreclosure Process ).
To obtain a judicial foreclosure, a mortgagee must prove to the court that they own the property and that they have the right to foreclose on it. This is proven through a judicial proceeding requiring service of process , pleadings , a judicial trial , and other formalities. For example, in New York State, there is a 90 day pre-foreclosure notice period before starting a court case, followed by judicial processes such as settlement conference and discovery (see The Foreclosure Process in New York State ). In some cases, judicial foreclosure proceedings can even take several years to complete.
Although judicial foreclosures can be long and expensive, they can be useful for settling disputes in the mortgage instruments or between the parties. Dispute resolution facilitates future sales of the property because there is less uncertainty about the property.
Judicial foreclosure could negatively impact a person’s credit score, and such a record could stay in a person’s credit report for several years, which could negatively impact the person’s ability to borrow.
[Last reviewed in February of 2025 by the Wex Definitions Team ]
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