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What is a Judicial and Non-Judicial foreclosure process?


Each state governs the foreclosure process differently. In the state of Texas lenders may foreclose on deeds of trusts or mortgages in 2 ways, using either a judicial or no-judicial foreclosure process.  


The Judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure the property will be auctioned off to the highest bidder.


The Non-Judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default. In deeds of trust or mortgages where a power of sale exists the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as a trustee. Regulations for this type of foreclosure process are outlined in the "Power of Sale Foreclosure Guidelines.

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