What is a non-judicial foreclosure?

A non-judicial foreclosure refers to the sale of property without court involvement when a borrower defaults on their loan. This process allows lenders to recover the property without having to go through the lengthy court system, thus facilitating a quicker resolution. In this scenario, the lender follows the statutory procedures established by state law, which typically involve notifying the borrower of the default and providing them an opportunity to remedy the situation before the property is finally sold.

Non-judicial foreclosures are common in many states and are particularly advantageous for lenders as they minimize legal costs and accelerate the timeline from default to sale. The process usually concludes with the property being sold at a public auction to recover the outstanding debt.

In contrast, the other options do not accurately describe non-judicial foreclosures. Court litigation is required in judicial foreclosures, a delayed process is indicative of various legal implications rather than a characteristic of non-judicial proceedings, and random selection of properties for foreclosure does not align with the defined processes surrounding defaults and foreclosures.